i live in an affluent suburb, and am considering selling my own home which i think will be a fairly marketable piece of property (rather than going through an agency and paying the brokerage fee). good idea? bad idea? with some decent marketing savvy/investment and a good real estate attorney can i save myself the 6%? are there any potential negative ramifications (e.g. from the real estate agency community)? This can work in many instances, but don't expect to save the full 6%. Some things to consider:
1) Are you willing to do all the work (advertising, open houses, etc...)
2) Is your area "hot" - if there are a lot of other homes selling nearby, it will be easier. People will see your sign and call. If the market is cold, the realtor (or you) will have to do a lot more work.
3) Don't expect to get the full 6%. When someone buys "By Owner", they expect a bit of a deal. They will expect some of that commission as well.
4) If you want to multilist your home, there are places that will do it for you, but it will cost money. Also, if you don't offer enough of a sellers commission in the multilist, realtors won't bring people to your house.
I live in a condo complex where units are bought/sold every month. Here, it's fairly easy to sell by owner. People see the open house signs and visit while shopping for realtor-sold houses. If I lived at the end of a secluded cul-de-sac, it would be harder.
-->Adam nope why pay if you can do it yourself... the only thing you will need to do is spend the time showing it and stuff like that.. Other than not covering every aspect I can't see a problem as long as you can market it, I say do it yourself (the only advantage of a broker is access to the multiple listings - otherwise they are mentally vacant) You CAN sell your house without a realtor, they just have more connections. Especially since buyers who are QUALIFIED for loans are few and far between (and are probably using a realtor), I'd just suck it up and pay the 6%. It's going to be tough to sell as it is.
But, if you're in no hurry to leave, go ahead and try. It couldn't hurt. You should not have any trouble from real estate agents, but the re agent would take care of showing the house and make sure that every transaction was handled legally and properly. State laws are different throughout the country and each have regulations that must be adhered to. There are also federal regulations that must be followed, such as the fair housing and lead paint disclosure. I have seen attorneys that do not know the laws and can get you in trouble with the authorities. Also a good agent can maximize your sale price and can save you money if they do their job. You can do it, and I bought a FSBO house once: it was a good deal for both of us. The biggest problem is publicity; the real estate listings are accessible over the internet, and getting your place before the public without having on the internet will drastically reduce its exposure. Only the most dedicated shopper will pore through the classified these days when a search engine can present hundreds of suitable properties in seconds. You will need to decide whether to do "broker cooperation": pay 3% to a buyer's broker if one shows up. There are operations which, for a fixed fee, will put your listing on the internet without doing the full seller's broker's job. Finally, you will have to worry about constructing a contract if a buyer appears; I wrote the contract for the FSBO that I bought, but I knew what I was doing and no problems arose. You may want advice here; you are talking about many thousands of dollars, and a mistake could be very expensive. I tried FSBO last year. It was a miserable experience. We setup a website with pictures an information and we bought a really nice custom sign for the front yard with information sheets. We lived in a hot neighborhood too. When it came down to it, buyers have a realtor because it doesn't cost them anything but the realtor they use expects to be paid by the seller. We even tried to coop and pay a 3% commission to the buyer's realtor. Nothing worked. I truly felt like realtors were purposely steering buyers away from our house. After we got a realtor, the house went fairly quick.
I think in a better market, it might have gone better. I think it is truly possible, but it is a lot of work and you might be fighting a losing battle.
A 2nd option might be to interview a few realtors and try to negotiate their commission. its a good idea to save money to sell your own house. but you want to know who your selling it to because it would hurt you, you wont be able to get the money that you wanted it for. Just telling you to think twice. But its a good idea to sell your own house because you don't need to pay them interests or even fees. So go head and try it. but just be care full. Read these carefully.. and if you want to know more informatin just go to www.dawnriskrealty.com/homeselling.asp,
here are some home tips saling your own house.
1.Selling your home can be exciting, but it also takes work. You'll need to fix all those little problems you've let go for so many years. You need to decide if you're going to try to sell your own home or use a professional real estate broker. And you'll need to be patient! Selling your home can take some time, depending on your local real estate market.
2.it's a good idea to place your home on the market as far in advance as possible of purchasing a new one. If you find a new home first and then try to sell your present home, you may wind up with two mortgages.
Keep in mind that when people move, sell and buy, there usually is a domino effect. Closing and moving dates have to be coordinated, and the more firmly everyone commits to a window of dates and sticks to them, the better for all involved. Put all agreements about dates in writing, and protect yourself by negotiating financial penalties for failure to comply.
3.Check Your Curb Appeal
A home that's visually appealing and in good condition will attract potential buyers driving down the street. Use this checklist to view your property through an outsider's eyes.
* Is the landscaping well maintained?
* Are there cracks in the foundation or walkways?
* Does the driveway need resurfacing?
* Are the gutters, chimney and walls in good condition?
* Do the window casings, shutters, siding or doors need painting?
* Are garbage and debris stored out of sight?
* Are lawn mowers and hoses properly stored?
* Is the garage door closed?
4. On the Inside
Strong curb appeal will lure potential buyers inside, where you have to live up to their expectations. Fortunately, there are plenty of easy improvements you can make to your home's interior without spending a lot of money. Number one is cleaning. Your windows, floors and bathroom tiles should sparkle. Make sure you have clean heating and air conditioning filters. Shampoo dirty carpets, clean tubs and showers, repair dripping faucets and oil squeaky doors. Keep your home neat, clean and picked-up at all times. It may not seem fair, but a peek in the oven may be the hallmark by which a buyer judges how well you have kept up your home.
Remove unnecessary clutter from the garage, basement, attic, closets and straighten stored items. Also remove any items that might make a statement that would be offensive to others who may not share your same views, beliefs or sense of humor. If your home is crowded with too much furniture, consider putting some things into storage. If a room needs a fresh coat of paint, use a neutral off-white. Think, too, about how your home smells. You may be used to the smell of a pet or cigarettes, but such odors can be a strong turn-off to others. Be certain to remove valuables such as jewelry and other items from view. It might be wise to put these items in a safe deposit box before showing your home. Finally, set a mood for the buyer. Make your house homey with live flowers and fresh guest towels in the bathroom. Place scented potpourri around the house or, on the day you're expecting a potential buyer, pop a batch of frozen cinnamon rolls into the oven for a welcoming aroma.
Remember, cosmetic changes do not have to be expensive. In fact, costly home improvements do not necessarily offer a good return on your investment when you sell. It's attention to the basics鈥攁nything that says 鈥渢his home has been carefully maintained鈥濃€攖hat will help you get the price you want.
5.Choose the right Agent
Some homeowners decide to sell their homes themselves in order to save the commission charged by a real estate agent. The commission rate may vary, depending on where you live or what agency you choose, but it is generally upwards of 5%. However, handling your own sale means you will be responsible for placing ads, answering phones and showing your home to strangers. What's more, buyers who know you are saving on an agent's commission may offer less for your home, wiping out the financial incentive to do it all yourself.
You may decide an agent's commission is a bargain the first time that a would-be buyer shows up unannounced at dinnertime. Also, be aware that a real estate agent probably knows a lot more about the business of selling a home than you do. Here are some of the advantages professional agents offer:
* They will help you establish a fair asking price for your home.
* They will promote your home to other agents and list your property in multiple listing services. A multiple listing service is a book or computer database that all real estate agents who subscribe to the service can access. Your home will get exposure to all those agents, one of whom may have the perfect buyer.
* They will create, pay for and place advertising for you.
* They will schedule appointments to show your home to prospective buyers even when you are not there.
* They can weed out buyers who will not qualify for a mortgage.
* They can refer you to sources for insurance, inspections, legal counsel and financing.
* They will help you negotiate with the buyer.
* They can make suggestions to help make your home more attractive to a potential buyer.
6.Setting a Fair Price
Naturally, you want to get top dollar for your home. But, at the same time, you don't want to scare off potential buyers with a price tag that's too high. Setting an artificially high price may cause your property to languish on the market for months. Reducing your asking price later on may lead buyers to wonder if there is something wrong with your home. Here are some of the factors to consider in pricing your home.
* Your location
* Economic conditions
* Supply and demand in the local housing market
* Seasonal influences
* Local schools
* Average home prices in the neighborhood
* Your home's extras -- pool, fireplace, central air, etc.
To determine the value of your home, you will want the advice of a good real estate agent. Ask an agent to prepare a market analysis for you, showing the recent selling prices of neighborhood properties comparable to your own. The agent can help you adjust for the unique features of your own property.
7.
Qualifying a Buyer
Either you or your agent will want to quickly weed out potential buyers who cannot really afford to purchase your home. A number of factors will help determine whether or not you are wasting your time negotiating a sale.
* The buyer's debt and credit history
* The buyer's current income and employment
* The buyer's cash position and availability of a down payment
* The length of time the buyer needs before closing on your home
* How interested the buyer appears to be in your home versus others
8.Tax Implications
Selling a home can have a major impact on your federal and state tax returns. Check with your accountant on the factors that may affect taxes resulting from the sale of your home. For example:
* Whether you purchased the home or acquired it by gift or inheritance
* Whether you used your home partly for business or rental
* Costs associated with selling your home
* Home improvements or additions, which may help to offset capital gains
* The sale of your home. In certain cases you can exclude up to $250,000 in gain ($500,000 for married couples filing a joint return) on the sale of property that was your principle residence for at least two years. Generally, you can use this exclusion every two years. Have you seen how many question about selling and buying real estate people post here? If they think they know how to do it, why do they get into a huge mess and have so many problems?
Yes, it's possible to sell yourself, but only if you really know what you are doing. Here's just one example: do you know all the disclosures you need to provide as a seller? All of them? Do you know what to do and what are your rights, if a buyer wants to get out of a contract 5 days after you accepted their offer? Do you know how to write a Notice to Perform, if a buyer is not doing something he is supposed to do?
I can give you a hundred more examples like this... 1) You property won't be listed on the MLS if you go the "For Sale By Owner" route.
2) Most REALTORS庐 won't show you home if you don't offer them a commission for bringing a buyer. You'll most likely have to offer a REALTOR庐 who brings a buyer at least 3% - and some will want more because they are going to have to double check all of your paperwork and do some extra leg work to make sure everything is legal and up to snuff.
3) You will have lots of out of pocket costs to deal with. Advertising, signage, flyers, open houses, etc.
4) Do you have a network of REATLORS庐 you can call or notify that you home is for sale and ask them to come take a look? Most REALTORS庐 work with both buyers and sellers. You need to advertise to REALTORS庐 with buyers. Do you know who they are and how to contact them?
5) You will have to conduct your own showings. Can you be available during the day Monday thru Friday?
6) Who are you going to let into your home? Just anyone who wants to see it? REALTORS庐 don't show you home to anyone who hasn't been through their qualification process. Also, the REALTORS庐 key system (in areas with electronic keys) keeps track of each and every time someone enters your home. Be careful - some criminals visit open houses just to see what goodies you have and then they come back later to steal your stuff.
7) Do you really know how to accurately price your home for the marketplace?
8) Do you realize that about 95% of all FSBOs (For Sale By Owners) that are actually sold end up getting sold to investors who pay rock bottom prices?
9) Did you know that most FSBOs eventually end up selling with a REALTOR庐 after their owners get totally frustrated with the process.
10) Do you know how to qualify a buyer? How do you know if the sale will hold together through the closing?
11) Do you know what to look for in a mortgage pre-approval letter? How do you know it is worth the paper it is written on?
12) Do you know how to process and file all of the paperwork?
13) Do you know the legal ramifications if something goes wrong?
14) Do you know how much it costs up front to hire a real estate attorney? An appraiser? A title compnay? An inspector?
15) Do you know that a REALTOR庐 only gets paid IF and WHEN you home sells and actually closes?
Buying or selling a home is the biggest investment most people ever make. In my opinion, you shouldn't do this without professional help.
Would you represent yourself in court, or would you hire a lawyer?
Would you operate on yourself, or you you hire a skilled surgeon?
Make this decision carefully. But by all means, feel free to try it yourself. Chances are that after you spend a couple of thousand of dollars, you will get frustrated and hire a REALTOR庐.
This is not a complete list, but it gives you an idea of just some of the things that you need to be aware of.
I hope that helps.
Hatlady
In the interest of full disclosure - I am a REALTOR庐, licensed in Minnesota. |
