When I have the chance, I like to drive around the neighborhoods near my home and office. Lately I have been noticing more For Sale By Owner signs. That is to be expected as the market begins to turn upward after a miserable 7-year stretch where buyers had the upper hand. In fact I welcome it.
In 2012 only 9% of successful real estate transactions were done For Sale By Owner, an all time low. FSBOs are most successful in a seller’s market when there are more ready, willing and able buyers. But near the height of the sellers market in 2004 only 14% of successful transactions were For Sale By Owner. A significant portion of those successful For Sale By Owner sales were between people who knew each other or were related in some way. So as you can see, even under the best circumstances it’s us Realtors that are getting the job done.
I completely understand the for sale by owner mentality. Homeowners want to save some money. Before I became a licensed professional I tried to sell a property of mine on my own. It didn't turn out well. The buyer changed her mind and wanted her deposit back. I didn't want to give it back because I had found I new place to buy. She hired an attorney and I ended up with a lien on my property. That meant I couldn't sell it until the lien was removed. By the time we came to terms, and I got the lien released it was winter in New England and that’s not a good time to sell. I lost a lot of time and money. In the end, I listed it with an agent at 7.5% commission and ended up closing about 9 months after I first “sold” it on my own.
Before you stick the For Sale By Owner sign in the ground, ask yourself these questions?
1. Are you prepared to show your property to a bunch of strangers who read your Craigslist ad?
2. Are you available to show your home 7 days a week? If you work a full time job, your home is essentially off the market during those hours.
3. Will repairs add value or should I sell it as-is?
4. What is my property really worth?
5. What should the asking price be?
6. Should I hold an open house? (I will answer this one now. No!)
7. How will you react to buyer’s low-ball offers? They are coming without a doubt. Investors love FSBOs
8. What if I do get multiple offers, how do I make the most of it?
9. What do I need to disclose about any problems with the property?
10. Errors and omissions insurance? What’s that?
11. How do I know the buyer is really qualified and able to close?
12. How do I draw up the contract(s)?
13. What happens after the contract is negotiated and signed?
14. Who holds the escrow deposit?
15. Are you ready to re-negotiate the price after the inspection is done and issues show up?
16. The buyers changed their mind, now what?
17. What are my options if I owe more than my property is worth?
I am probably smart enough to do a brake job on my car if I took the time to research how it’s done. Would I do it? Of course not! Nor would I let the cheapest mechanic do it either. I want someone who knows what they are doing. My safety is important to me. For most people their home is their largest asset. A Realtor can guide you past potential pitfalls and keep you out of the legal trouble I found myself in. The sale of that asset should be handled by an experienced professional. Call one today. Or better yet call me. If I am too far away, I can help refer you to an experience agent in my network.
I answer a lot of the questions posted above in the link below. Hopefully I have shown you there is a lot more to think about than you may have realized. It isn't as easy as it looks to sell a home successfully.
Related:
For Sale By Owner - Tips From A Pro
2 Simple Reasons FSBOs Sell For Less
Serving The Greater Fort Lauderdale area since 2006
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