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As a home owner, the decision to sell your home by
owner or to hire an agent should be weighed carefully. Many home
owners across the country have successfully sold their home, proving that
it does not take a real estate agent to handle the job. Many other
home owners have decided that the responsibilities and work involved are
better left to a real estate agent. As a home owner, you should
consider the advantages and disadvantages to selling your own home
before you invest any amount of time, money and energy into the process.
Ultimately, though, the decision lies in answering this one question:
Am I willing and able to put in the time, energy, and money necessary to
sell my home, or will I be better served by having a real estate agent
handle it for me?
One misconception that many home owners have about
selling "by owner" is that they can simply stick up a sign, run a few
ads and buyers will show up by the thousands. Worse yet, and I
hear this from every other FSBO (for sale by owner), are the sellers
whose friends and neighbors planted a sign and sold their home in six
hours. Many sellers do not realize
the amount of work, time and energy involved in saving a six percent commission.
Remember this: Until you have sold the home, transferred
ownership, and received a check from the title company, you are a slave
to buyers. This includes continual marketing to attract buyers,
accommodating buyers to view the home, and working with your buyer to
close the transaction after you have a contract.
In the following sections, look at the advantages
and disadvantages to selling your home. After reviewing those sections, take the FSBO Quiz to see if you are
ready to sell your home "by owner".
FSBO Advantages
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Not having to pay a six to seven percent real
estate commission
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Does not require a license to sell your own home
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Many professionals (real estate, mortgage, title,
etc.) are willing to help out for free
FSBO Disadvantages
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Do not have the ability to include home in the
Multiple Listing Service (MLS)
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Must buy your own yard sign
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Must create and print your own sales flyers
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Must pay for your own newspaper advertising
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Must perform your own market analysis to properly
price home
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Must qualify your own buyers to make sure that
they are financially capable of purchasing your home
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Must be available for appointments during the
week, evenings and weekends (which may conflict with your work
schedule)
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May have to give up weekends to hold open houses
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Must make sure that the purchase contract
is written to protect your best interests
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Must make sure that the closing process goes
smoothly...coordinating everything from appraisals, termite
inspections, making sure that the buyer is fully qualified, etc.
This is only a partial list of most of the
advantages and disadvantages. The intention is not to convince you
that you cannot sell your own home...you can. However, you must be
willing to accept certain liabilities and responsibilities that most
real estate agents assume when selling a home. Most importantly,
remember that even though you may not be paying a six percent real
estate commission, you are still working for it yourself.
Most real estate agents, on the other hand, will
handle many of the finer details of the process. These details
include the marketing, negotiating and closing of the sale. Agents
will make sure that the termite report is ordered or that the buyer is
pre-qualified for a mortgage before an offer is presented. An
agent will be available to show your home on a moments notice or while
you are at work. He or she will continuously market your home,
be there to answer the phone if someone calls with questions, and is
often more flexible to accommodate a potential buyer. More
importantly, your real estate agent will work on your behalf with your
interests in mind.
In addition, many buyers prefer to work with agents
rather than proceeding on their own. Buyers recognize the benefits
of having a real estate agent represent their best interests, especially when it
will not cost them a dime. By not considering to pay a
partial commission to a buyer's agent, you may be excluding a large
portion of potential buyers from purchasing your home.
Before making the decision, ask yourself the
following questions:
FSBO Quiz
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Do I have a clear understanding of the home
selling process from start to finish?
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Do I have a clearly understand the paperwork
involved in the transaction?
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Do I feel I can price my home effectively for my
area?
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Do I have the time and money to prepare my home for sale (including any renovations or costly fixes
that I may have to do)?
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Do I know what needs to be done to prepare my
home for the market? Do I really need to fix this or repair that?
And if I don't, will it hurt my chances of selling my home?
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Am I ready to spend the necessary money to buy
signs and pay for advertising to sell?
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Do I know where and how to advertise my home?
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Am I able to create and print sales flyers for my
home?
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Am I able to effectively show my home when I
receive phone calls for appointments, even during the week, evenings
and weekends?
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Will I be out of town a lot; and if so, will I
have to take my home off the market while I am gone?
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Am I willing and able to give up my weekends for open
houses?
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Am I comfortable in showing my home to strangers?
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Do I know what I need to disclose to potential
buyers?
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Do I know what to do if I receive an offer?
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Do I know if a buyer is serious or trying take
advantage of me?
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Do I know how to overcome any objections when
negotiating the sale?
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Am I able to screen potential buyers? Do I
know where to send them for a loan?
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Do I know when I have to give back earnest money
deposits?
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Do I understand the loan process?
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What do I do if the buyer wants me to pick up
closing costs and the lender says I have to?
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What if the appraisal comes in below the sales
price?
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Do I need title insurance?
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Do I need a lawyer?
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Do I need to order a termite inspection?
Roof inspection? Home inspection? Do I have time available
during the week to be home for these inspections?
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Am I financially able or willing to fix any
repairs noted by the buyer or the buyer's home inspector?
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What if the buyer refuses to close or sign the
final paperwork?
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What if the buyer does not qualify after a month
into the closing process?
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Am I willing to commit a month, three months, six
months, etc. to selling my home or is this something that I want to
try for a weekend or two to see if it sells?
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Would someone else hire me to sell their home?
Obviously there are questions here that you may
agree with and questions that you hope you won't have to answer.
The key to deciding if you should sell your home by owner or not is this:
Am I willing to make the commitment to sell my home and expect the same
from myself that I would from a real estate agent?
It is probably better to hire a real estate agent
when you are not willing to pursue the process 100%. When your schedule does not
allow you the flexibility to market your home, when you travel
frequently, and when you fear the fact that you will have to allow
complete strangers into your home, the entirety of the ordeal can become
very cumbersome and counterproductive. Why spend the money and waste
your time when you have so many factors working against you? It
will only cost you more money and time in the long run.
If you are dead set against hiring an agent to sell
your home, consider offering to pay a buyer's agent to bring you a buyer
for your home. The standard fee, also known as a co-brokerage fee
or co-broke for short, is three percent of the sales price of your home.
Anything less than this will not attract the attention of a buyer's
agent and even if the agent agrees to a smaller fee, it is likely that
he or she will be more difficult to work with, especially if a problem
arises.
As you decide whether or not to sell your home
yourself, the best advice is this: Hire the person who is willing
to put in the time and the energy that you expect and want from someone
who is selling your home--whether it is yourself or a real estate agent.
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