Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO).
Financial expert Mark Lamkin from Lamkin Wealth Management says there are several reasons this might not be a good idea for the vast majority of sellers. If you're selling to a family member or a neighbor, for example, selling your home yourself is a great way to do this. But the vast majority of sales do not happen this way.
Here's the Five reasons Mark Lamkin believes you need a realtor:
1. There Are Too Many People to Negotiate With- Negotiations
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
The buyer who wants the best deal possible
The buyer's agent who solely represents the best interest of the buyer
The buyer's attorney (in some parts of the country)
The home inspection companies which work for the buyer and will almost always find some problems with the house.
The appraiser if there is a question of value keeping the sale in tact for the time between the accepted of and managing the phone calls to all parties is consuming
As you can see, the list of the players in the negotiations can go on and on and I didn't list them all. Many people LOVE to negotiate and haggle, but far too many people don't enjoy this aspect of buying or selling anything--let lone the hundreds of thousands of dollars that are on the line in this deal. Professional negotiators (Realtors often are) can make you tens of thousands in this manner, so don't discount this simple fact alone.
2. Exposure to Prospective Purchasers
Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you? Realtors use the MLS- Multiple Listing Service. The MLS is a local or regional service that compiles available real estate for sale by member brokers along with detailed information brokers can access online. Also, with the MLS system, realtors can search certain parameters to match certain buyers with a number of houses. Obviously, if you are selling your home yourself, industry stats say you are passing up almost 9 out of 10 buyers. While that doesn't mean you can't sell your home yourself, Lamkin's opinion is that it's significantly harder to do so. And of course, there's the time value of money aspect of this as well.
Where do buyers find the home they actually purchased?
43% on the internet
9% from a yard sign
1% from newspaper
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial
Many people selling a home have full time careers. That leaves a spouse or child home alone or in vulnerable spots. Do you really want strangers in your home with your family, when they come to see your home? This really is a huge safety concern. Lamkin says he wouldn't want his wife and kids in this spot, and he knows most of you wouldn't either. Second, If you're a single person or a family that tells a person when you're at work (to schedule the appointment), you're showing or telling someone when is the best time to come back and help themselves. Or if you're a single female, you could also be putting yourself at risk.
4. FSBOing has Become More and More Difficult- Legal Risks
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years. The big issue I have with this: You can Be Sued! Think about how litigious our society has become. If you fail to disclose something, even in an innocent manner, you can be sued- and most likely you will lose! A realtor knows the questions to ask and what is mandated by law to be disclosed. This also can cost you thousands!
5. You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent's commission. The seller and buyer can't both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $175,000 while the typical house sold by an agent sells for $215,000. This doesn't mean that an agent can get $40,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
Bottom Line? Before you decide to take on the challenges of selling your house on your own, call Aaron Novello of The Novello Group today to discuss your options.