THINKING ABOUT SELLING AS "FOR SALE BY OWNER" ie. FSBO?
Failing to arrive at the best asking price can be a very expensive mistake! Both over-pricing and under-pricing are common mistakes made even by the most business-savvy property owner. Failing to price your property right is the first potential problem that a FSBO seller may experience. But there are many more things to consider when deciding how to best sell your property. You can read about it here, or just go to the bottom of this page to order your free online Sold Homes Report.
Most "by-owners" attempt to sell without a Realtor to save from paying the commission. But do you save money? Statistics show that FSBO'S have less chance of getting a faster sale and a higher sales price than homes listed with a Real Estate Company. In addition, homes listed with a real estate broker will many times net the owner more money even after the real estate commission is paid! This is because your home will have much more exposure when listed with a broker than you can expect to get on your own. Obviously the more qualified buyers that know about your home, the better chance you have of getting offers, including higher offers! It's that simple.
When attempting to sell "by owner" keep in mind that you will most likely be contacted by two types of people.
!. "Bargain Hunters". These are people that do nothing but contact ads placed on "by-owner" properties. These "bargain hunters" are betting that you are an inexperienced seller and that they will be able to buy your home at a very low bargain price, or for unconventional terms. On the other hand, they have no interest in trying to make these low-ball offers with properties listed with a real estate company, because they realize that these homes have been priced with confidence by an experienced Realtor and that he has no chance of talking directly to the owner for the purpose of getting him to accept a low-ball offer.
2. "Unqualified Dreamers" These are people that have no chance of being able to afford your home. They have not been pre-qualified for a loan. They look at $200,000 homes when they can only afford a $140,000 home! They only call on "by-owner" properties because they know that an Realtor is not going to waste any time showing them property that they are not pre-qualified to buy.
When selling "by-owner" you will most likely get a respectable amount of calls. You may get a ton of calls! Unfortunately almost each one will be from one of the two type of buyers mentioned above. Keep in mind that you will be showing your home to total strangers. Be sure stick with them closely as they tour your home. And if someone wants to make an offer, it will most likely be awkward for both parties. There will be no agent to act as a "buffer" working to get you the highest price. If you are lucky enough to get your price and terms, Congratulations! Now the fun starts!
Once there is an accepted offer, even Realtors with many years experience and training will face problems in getting to an Act of Sale. The road there is not for the faint of heart or the untrained. Getting to a sale is seldom routine or "smooth sailing" even for me after 26 years and hundreds of sales.
The legalities of selling a property are not to be taken lightly. Realtor's are required to take mandatory hours of education for real estate law and procedures each year, and also required to have liability insurance coverage just in case something goes wrong. As a "FSBO" you will not have that safety net. One mistake could be costly!
Will it be aggravating or inconvenient for you to take calls early mornings or late evenings from curious Lookee Loo's that have not been screened? Do you know what questions to ask without offending them or scaring them off? Are you comfortable showing your home to total strangers? Will you feel awkward negotiating face-to-face and maybe accept a low offer because you did not have time to think about it, or do not have professional negotiating experience? Are you sure you that you know how much your home is worth? What if you are under-priced by 10%, or often just a bad, overpriced by 10% and get few buyers to look or and end up turning down an offer for fair market value because your thought it was worth more? Do you know what state and federal forms you MUST complete and what forms the buyer has to approve and execute? Are you going to be using a standard FSBO Purchase Agreement form you found online or at Office Depot? (Good luck!). Even if you get an acceptable offer, do you have the time, experience, and knowledge to perform dozens of tasks that are needed to get to a sale? Do you have the internet savvy to get your home advertised on many websites and search engines? (You better, since over 80% of today's buyers shop for a new home online.) Will you have a better chance of attracting higher offers by trying to sell "by owner"? (Very doubtful)
Most "by owners" think that they will save money by not having to pay a commission. True, no commission will be paid if selling "by owner". The only problem is that the buyer also knows this. He is counting on you reducing your price right off the top by the amount of commission that you thought you were saving!
To Request a Sold Homes Report
Please feel free to contact me here about selling or call me today at 908-5536. I will quote you a competitive commission rate and provide you with an Opinion of Value for your home. I look forward to hearing from you soon!