You’ve probably heard the old saying that a lawyer who represents himself has a fool for a client, and without proper preparation, the same can be said about the homeowner who serves as her own real estate agent. Saving the dollars you would spend on a real estate agent’s six- to seven-percent commission may sound appealing, but in our opinion, you’re getting a lot of value in the services rendered for that price.
In the present inventory-heavy housing market, you can’t afford to not be honest with yourself about the money and time you’re willing to spend on marketing, selling and closing, and your ability to successfully represent yourself and your home. Nonetheless, if you have the chops for a for-sale-by-owner or FSBO (FIZ-bow) adventure, here’s the 411:
There’s much more to marketing your property than simply sticking a “for sale” sign on the front lawn. Detailed, descriptive fact sheets need to accompany that sign, be posted elsewhere and then replenished as your neighbors scarf them up. You’ll have to invest in advertising online, local newspapers real estate circulars and other promotional tools to reach your target buyer. Once thing’s for sure: this isn’t anything like selling your old set of golf clubs. It takes savvy to promote your home’s best assets in a sea of competition, and commitment to stay on task in unpredictable circumstances. It also takes money, so, just as the pros do, you’ll need to add home marketing costs into your monthly budget.
Accessibility for the sale
The best time to sell a home is when the buyer is in the mood to buy, which may or may not suit your personal plans and schedule. It’s possible to designate show days and times, but you really need to be flexible in order to welcome opportunity when it literally comes knocking. Remember, you’re a salesperson now.
Touring the digs
Also consider your comfort level with actually showing your home to potential buyers. As excited as you may be over the move you and your family are making, your current abode has a lot of memories, sentiment, and life experience tied into it─all things that have to stay out of the conversation during a sales pitch. You may be selling a home, but the buyer is shopping for a property, and the more objective their tour guide, the better.
Paperwork, paperwork, paperwork
The sale of a home involves an important array of documentation, from contracts to disclosure forms, and as a For Sale By Owner, you’ll be in charge of sourcing and assembling every last bit of it. To avoid pitfalls, employ the services of a real estate attorney to help clarify complicated jargon and processes, interpret local and state laws involved in the transaction, or handle the closing process. Regardless of the assistance you get, you must have a clear understanding of all requirements to properly organize and manage the paperwork process.
Writing the price tag
You may have big dreams about the profits you’ll reap by selling on your own, but before they come true, you’ve got to set an asking price that’s based on a number of factors, including reality. You’ll need to research sales data for comparable homes in your area, and may also require a review by an independent real estate appraiser. Also consider a dollar range in which you’re willing to negotiate, keeping in mind that the commission an agent would receive should be incorporated into the total price (no discounts for the buyer just because you’re the agent here).
Finally, in addition to the monetary costs of the sales process, consider the value of your own time. You’ll have to invest a lot of it if you decide to be your own agent. And, consider the costs of making a mistake. Inexperience can lead to errors, which can lead to lawsuits when transactions go awry. Still think you want to be a FSBO?