Real estate article: Do You Need A Real Estate Agent To Sell Your Home?
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If you are thinking about selling by owner, but worried about whether you can handle the task without the help of of a real estate agent, read on.....1) Preparation:
Regardless of whether you sell by owner or use an agent, preparation is up to the seller. Making necessary repairs, de-cluttering, making your home appeal to a wide range of buyers (staging), sprucing up your curb appeal....these are all areas that should be addressed before you announce your property to the market. The seller is always responsible for property disclosure, regardless of whether agent representation is used or if you sell on your own. Cost of preparation is the same for both.
2) Pricing:
WITH AGENT: An agent will provide a free CMA(Comparable Market Analysis) which include recent home sales and properties currently on the market in your neigbhorhood, information on their companies and services and an estimated price range in which they feel you could list your property. Make sure the information is left with you to scrutinize later. You should interview at least three agents and compare their CMAs, as the results may vary greatly depending on an agent's experience, familiarity with the market and desire to get the listing. CMAs are SALES TOOLS, designed to promote the agent, the agency and its services. Remember, banks NEVER lend money based upon an agent's opinion of market value. They hire a professional appraiser to protect their interests before loaning money to your buyer. A CMA is free and is considered the cost of doing business to the agent.
BY OWNER: Although many private home sellers initially price their homes using figures supplied to them by real estate agents, the results are often disappointing and result in inaccuracies. The next step sellers often take is using online pricing resources. While these services may work O.K. in some areas of the country, you will still receive a range of market value that can be several thousands of dollars apart. In some areas of the country, particularly New England, online valuations are seldom accurate due to the unique character of many homes, and other factors. Using an online market valuation can lead to disaster in these cases.
The #1 recommended way to be confident pricing your home is to skip the free stuff and go right for a professional appraisal. By hiring a licensed appraiser and paying for the report yourself, the resulting market value given should be similar to what the lender's appraisal report will show and allow the loan to go through more easily. You will also be able to negotiate with buyers from a position of strength as you will know the true value of your home. Many sellers feel comfortable sharing the appraisal report with prospective buyers, allowing them to feel that you are a confident home seller who has done your homework. The report will cost you around $250 - $300. and the expense will be worth it in the long run. It also may be deductible as a selling expense (check with your tax professional.)
3) Marketing/Advertising:
WITH AGENT: When you list, the agent is responsible for all advertising and marketing. You pay for it in the hefty rear-end commission, of course. Ongoing advertising can vary from agent to agent. It is best to be very specific and get everything in writing when inquiring about how your advertising budget is being spent. For example, if the agency says they'll advertise your home in newspapers, ask which ones, about the frequency of insertion, size of the ad and whether a picture will be used. It's hard to calculate an agent's cost per individual ad for a seller, as much of this is ongoing marketing. Aside from listing your home on the MLS (Multiple Listing Service), and holding an open house, what else does the agent plan to do that will promote your property. In a buyer's market, many agents use price reduction strategies that you must adhere to. Ask what they are before you sign anything. Also ask how you can get out of the contract if the agent is not providing the marketing services promised. This is known as a performance clause. Get everything in writing!
BY OWNER: Advertising and marketing becomes your responsibility when selling by owner. The key here is getting wide enough exposure to bring in serious buyers -- and offers. The world of marketing has changed and gone far beyond classified ads and a yard sign. The internet is used by over 70% of buyers today and should be part of your overall strategy. Research this area carefully as many FSBO websites contain lots of outdated properties and employ the use of call centers to divert buyers from contacting you directly.
As 85% of buyers purchase regionally, you should look for a for sale by owner service in your area. Regional services often use targeted real estate magazines to promote your home similar to how listed properties appear in magazines. For best results, contact a local for sale by owner service in your area. Unlike internet-only advertising, these companies provide magazine advertising exposure, custom signs and other helpful selling products that help you to set your property apart from the crowd. To locate a service near you, log onto:
Advertising costs will vary depending on how long the home is on the market, and the type of advertising medium chosen. The exact expense can depend on where you choose to advertise. A classified ad in your local newspaper may cost $45. for one day, but what will you do to attract buyers the other 29 days of the month. What about buyers who don't read the paper? Did you know that less than 53% of buyers look at classified ads anymore? One ad for an open house might cost $75., but failure to link this to an internet ad where a slide show is located is not effective use. In the age of TV and internet news, younger buyers rarely pick up a newspaper...period. The advertising cost may increase slightly in a buyer's market due to more properties being in competition and the length of time on market longer. Homes can go very quickly in a strong seller's market, sometimes within the first month. Higher priced homes generally take longer to sell, as well as homes that are overpriced for the market or that are very unique or which may appeal to a limited buyer pool.
4) Showing Your Home:
WITH AGENT: Agents rarely want buyers to meet with home sellers. Agents are responsible for fielding phone calls from buyers and scheduling showings and hosting open houses. (Fact: Less than 2% of listed properties are sold as a direct result of an open house. Agents work open houses to find more buyers for other properties.) Your job will be to keep your house available EVERY DAY, just in case someone wants to come by. This means making arrangements for child and pet care, making beds, picking up toys -- you get the idea -- before you leave for work every morning. Selling a home can be difficult for both children and the family pets if schedules are not maintained. Don't be surprised if you notice a dramatic increase in showing activity just before your contract ends! There is generally no cost involved when agents show your home unless you must pay for child or pet care. The only cost is your time and sanity!
BY OWNER: When you sell by owner you will be speaking to buyers directly. You will answer the phone and will want to use a call sheet to jot down important information about potential buyers and to record the date of each call. Many sellers choose a time of day to return phone calls, preferring to have all their information at hand and not be distracted by other things. One of the unexpected stress reducers when selling your own home is the ability to schedule showings to fit your schedule, not someone else's. If you are planning a birthday party on Saturday afternoon, block that day out of your showing schedule. Not having to keep your house clean 24/7 - PRICELESS.
5) Offer and Negotiation:
WITH AGENT: When you list a property the agent will interact with potential buyers and agents who may be representing buyers. In fact, agents prefer sellers and buyers to be kept at "arm's length", fearful that one of them could screw up the sale if they met face to face. The agent is responsible for filling out the offer form and drawing up the purchase and sales agreement and making sure everyone stays on task. There may be attorney fees lumped into closing costs, however.
BY OWNER: When you sell by owner you will be meeting directly with your buyers, learning a bit about their situation, motivation and potential concerns. It is often easier to transmit messages and resolve concerns during the negotiation process without an intermediary. While in many states only a title company is used to draw up the legal agreements, in other areas either a real estate attorney or title company will handle this. Your attorney will handle the legal process from the point the offer is made by preparing the Purchase and Sale Agreement, holding deposit monies in escrow, performing the title search and, among other duties, keeping everything on schedule. The cost to a seller is between $500 - $1500. for a typical closing. Some attorneys will give a discount if they also represent you as a buyer simultaneously. Be sure to ask if that is an option.
So, if you have time to answer the phone and schedule appointments, possibility hold an open house, and have a realistic marketing strategy, you are probably an excellent candidate to sell "by owner". What can you save? Well, you could pay $20,000 commission (based on an average $350,000 home) or you could pay around $1,500 - $2,000 and keep your hard earned equity. It's your choice, but know that we're here to help make it a great experience.
About the author of Do You Need A Real Estate Agent To Sell Your Home?
Liz Provo is the owner of Picket Fence Preview and Massachusetts 4 Sale By Owner Service located in Easthampton Massachusetts. Picket Fence Preview is a regional for sale by owner service offering print and internet advertising, products, and support for consumers who wish to sell property without a real estate agent. Home sellers pay only for their advertising and any products purchased, never a commission. You may contact Liz at 413-529-2970 or log ontoAdditional real estate articles
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