10 Important Questions to Ask Yourself
Before Selling Your Home
1. Are you trying to save money?
The most common reason someone chooses to sell a house without a Realtor is to save money by avoiding the commission fee. It is a valid reason, but in the end you may not realize any savings after all. A buyer knows your selling your home without the typical 5-7% commission, so they take that into consideration and make lower offers. According to the National Association of Realtors®, in 2014 the average For Sale By Owner home sold for $210,000 versus $249,000 for a home sold by a real estate agent.
2. Will you save money by spending money on marketing?
Gone are the days where homeowners could count on in-person drive by’s to sell their homes. Over 80% of today’s buyers are busily scanning online listings to decide what properties to see in person. Many are passed up because the photos don’t draw them in. When a Realtor® contracts with you to list your home all the marketing expenses comes out of their pocket. They know how to photograph a home to attract buyers. Let’s face it, Realtors know everyone and can get the word out about your property the fastest and the most effective way to attract the most qualified buyers.
3. Will you only work with buyers without a Realtor®?
According to the National Association of Realtors®, in 2014 only 8% of all homes sold were FSBO. So if decline to work with buyers who have an agent you narrow your pool of buyers by 93%, a substantial disadvantage of actually ever finding a buyer. Did you buy your home without a real estate agent?
4. If you offer to pay a buyer’s agent will your home be shown as much as homes listed with agents?
In a nutshell, buyer’s agents are leery of FSBO transactions. They understand that navigating the legal side of a home purchase efficiently and effectively is much easier when they are working with a seller agent who understands the documentation and legal requirements to go to settlement. In some cases a buyer’s agent will require more than the traditional 3% knowing they are going to be responsible for everything, or they may require the seller hire an attorney. In some cases the attorney fees can be more then what a seller would have paid the listing agent in commission.
5. Do you know how to avoid litigation?
The biggest mistake sellers who choose FSBO make is understanding the complexity involved in the entire process. Without representation by a licensed real estate agent or attorney, you expose yourself to future litigation if any mistakes are made, regardless of intention. We live in a extremely litigious society and the potential risk far exceeds any perceived profits is a lawsuit arises.
6. Will a seasoned real estate investor take advantage of my inexperience?
Seasoned investors love to purchase FSBOs. They buy and sell homes for profit regularly and know what they are doing. They understand that the biggest reason a seller chooses FSBO is the idea of saving money. They seize the opportunity to easily manipulate the situation to their advantage.
7. Do you have the time?
You want your home seen by as many potential buyers as possible, which means you need to be available 7 days a week. Can you afford to take off work and rearrange your schedule last minute? What about your family life? what will you do if a buyer calls or drops by last minute when you are on your way out the door to take the kids to practice? A good Realtor® works full time because selling a home is a full time job. They coordinate showing your home with potential buyers making every effort to minimize any inconveniences, all free of charge until your home sells.
8. Do you feel safe allowing strangers in to see your home?
This is arguably the most important consideration. How can you know who is coming into your home? If you weren’t trying to sell your home on your own would you just open your door to anyone and invite him or her in? Will a buyer without an agent even want to risk his or her own safety to see your home?
9. Do you know how to pre-qualify potential buyers?
A sellers agent knows to show your home to as many qualified buyers, not just buyers. Will you ask for proof of a buyer’s financial ability to purchase your home before you let them see it? Would you share your personal finances with someone you just met? Efficient Realtors® know to have their buyers pre-qualifed before showing them homes.
10. Have you considered what happens if interest rates go up?
You may be thinking that you are going to try it on your own first and see what happens, what could that cost you anyway? This could be the biggest pitfall of all. Have you really analyzed all the expenses you will incur on this experiment? What happens to the housing market prices when interest rates increase? Right now rates are the lowest in 40 years and eventually they will go up. Right now what that means is that if a buyer is financing, they can afford a lot more house! Take a look at this example:
Let’s say that a buyer is purchasing your home and financing $300,000.
- $300k today at 3.5% = $1347.15 P & I
- $300k in the future at 4.5% = $1520.06 P & I
- Increase of $172.93
You might think that doesn’t sound like a lot, but in order to keep the lower payment amount, the buyer would have to decrease their purchase power by $35,000. They now can only afford $265,000 which means your home may not be in their budget anymore.
Will you go to all this effort and expense and still hire a Realtor®?
If selling your home on your own were so easy, the real estate industry wouldn’t exist. A good Realtor® devotes a great deal of time and their own money to market your home, dealing with problems, navigating the transaction to settlement through a maze of issues arising from home inspections, title searches, appraisals, and financing. 93% of both buyers and sellers believe it’s better to work with an expert.
Curious as to what your house is likely to sell for in today’s market? For a no-obligation personal consultation, simply call Kelly Jo at 561-906-0336, email at email@example.com, or submit the form below.