For Sale by Owner
Downside of Selling Your Own Home – Why It’s Best to Hire a Realtor®
We’ve all seen those signs around town and perhaps in our own neighborhood. If you’re thinking about selling your home in the near future you might be thinking this is a great way to save some money -- but is it really?
While keeping those commission dollars in your pocket instead of a Realtor's is definitely tempting, not all homeowners are up to the challenge of selling their own home. Even in a straightforward transaction, there is plenty of legal paperwork as well as advertising and marketing challenges to handle. For most people these challenges alone are a deterrent to selling on their own. A home is a financial investment so it makes sense to use a professional who can maximize your return.
The Top Ten challenges Faced by For Sale By Owners
1) Virtually every buyer looks at several houses before making a decision. Having only one house to show prevents you from helping the buyer do comparison-shopping. You will have to be aggressive to make sure potential buyers continue to consider your house after they’ve looked at properties on the market.
2) It is difficult to determine the tastes and requirements of a buyer if you have not had the opportunity to fully qualify him/her beforehand. By showing your property to whomever calls on your ad or signs, you will often waste valuable time doing showings for unqualified prospects.
3) Buying a home is a very complicated process involving the understanding and completion of detailed forms. Do you have the legal expertise to personally prepare a valid and fully enforceable agreement of purchase and sale?
4) Buyers are reluctant to discuss their finances with the other principal in a transaction. Most sellers fail to ask for a credit report, source of down payment, as well as other information critical to determining the buyers’ credit worthiness. There is nothing more financially devastating than discovering, the day before closing, that the buyer cannot get financing.
5) When selling on your own you must call buyers back yourself, by doing so, you are weakening your bargaining position and may give the buyer the impression that you are desperate to sell. A seller who seems anxious usually receives less money for their home.
6) Buyers normally will not discuss disadvantages or shortcomings they feel are present in your property. Thus, because you do not know what their objections are, you are unable to overcome them.
7) Serious buyers who know you are selling For Sale By Owner, will almost always deduct six percent off your asking price. They view you as a “wholesaler” and thus, expect to pay a wholesale price rather than a retail price. In essence, they are trying to save the same commission as you. “Retail” buyers typically work with Realtors.
8) Obtaining the names and phone numbers of everyone who calls can be difficult. Buyers are often reluctant to provide someone they don’t know with accurate information about who they are and what they can afford. Prospects are especially wary of giving personal information to someone they believe could use that information to get an upper hand in negotiations.
9) Unless you have an incredible marketing campaign most serious buyers will never know that your home is up for sale. Statistics show that more than 90% of buyers purchase a home that was introduced to them through a real estate agent or relocation service. Just 4% of buyers purchased a home they saw in an advertisement or after visiting an Open House. People looking for homes usually end up working with a Realtor because it costs them nothing (the seller normally pays all commissions) to get professional representation.
10) Throughout the time your home is for sale, you will inevitably face an onslaught of real estate agents soliciting the listing of your home. Every new real estate training program in existence advises agents to call on FSBOs for listings. When you list your home, at least the agents stop calling you unless they have a buyer.
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