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For Sale By Owner

Fact or Fiction: Common Misconceptions about Selling Your Own Home or Using a Discount Brokerage Firm

There are many websites and firms offering services to help you sell your own home. Should you trust them? While these firms promote the benefits of selling your own home, they may not provide complete information about what’s involved.

Buying or selling a home can be a milestone life event, and it can have lasting effects on your lifestyle and finances. Because it’s such an important decision, it’s critical you’re armed with accurate information so you can make the right choices.

Fiction: “For Sale by Owner” sales result in less stress for owners because there is added flexibility.

Fact: Selling your own home may offer increased flexibility for arranging showings, but that doesn’t avoid the possibility of stress.

Showings still require that the seller allocate time to arrange the showings, tidy up their homes, and plan for the showing, regardless of who performs the showing itself. For some, showing the home may not even be the most stressful aspect of the process, so using the “For Sale by Owner” approach may even be more stressful.

Fiction: Selling your own home is easy for everyone.

Fact: Selling a home can be easy for someone who understands the right approach, the real estate business in general, and the legal considerations when selling a home.

Professionals can make selling a home look easy, when in reality, selling a home can be far from easy! There is a myriad of logistical and legal decisions a “For Sale by Owner” seller makes independently. For example:

  • How will you determine a buyer’s legitimacy and whether he or she can obtain the necessary financing?
  • How will you prepare for and promote open houses?
  • What tools will you use to market your home? Do you know how to determine which websites generate the most views? Can you take professional photographs of your home? Can you produce and post a video that will adequately show off your home?
  • Are you aware of your legal obligations as a seller in a real estate transaction? Do you understand how to complete the necessary paperwork, accurately?
  • Are you able to successfully negotiate the home’s price and contract terms, who pays for the closing costs and inspection, and who orders and submits payment for the title insurance.

Eventually, nearly 80% of individuals who try to sell their home on their own end up choosing to work with a professional real estate agent. Many simply find that dealing with a home sale and moving are difficult enough, and finding the time to learn about the process and make important legal and logistical decisions on top of that is just too stressful.

Fiction: Because you know your home better than anyone else, you’re in the best position to show and sell it.

Fact: Simply being familiar with a house doesn’t necessarily mean you’ll be able to promote it in a way that will solicit the best offers.

Imagine how uncomfortable it would be to be viewing a home and wanting to discuss both its positive and negative aspects?but the person showing it to you is the proud homeowner. Viewers are less likely to spend as long looking around and discussing the home as they may want to, because of the presence of the homeowner.

Also consider the bias you may have as the homeowner. Is it possible that you will be biased about the condition the home is in? Might your feelings and emotions about the house influence the value (and cost) you assign to it? This could taint your negotiations. REALTORS®, on the other hand, will not have the same biasand what’s more, because they do this work every day, they know the market and how to successfully and reasonably negotiate for the sale of a home.

Fiction: Hiring a REALTOR® means a loss of control of the process.

Fact: REALTORs® use their training and expertise to provide a valuable professional serviceunder the homeowner’s direction.

Feeling like you may lose control over a situationespecially one as important as the sale of your homecan be disconcerting and uncomfortable. Discount brokers use this fear to promote services offering to assist homeowners in a “For Sale by Owner” strategy. However, the reality is that whether a homeowner is selling their home themselves, or using a REALTOR®, the homeowner is the one that is in charge.

As a homeowner working with a REALTOR, you have the final say over:

  • How your home is priced
  • When your home is shown
  • What offer you are willing to accept
  • All other areas of the home sale process

The difference is simply that a REALTOR® has the training and experience to help you make those decisions and to take much of the burden of selling the home off your shoulders.

Fiction: Selling your home by yourself saves you money.

Fact: Working with a REALTOR can enable you to sell your home for more than if you were to sell it on your own, according to numerous studies. The bottom line is that REALTORS® are trained experts and can maximize the sale of your home through appropriate pricing, marketing, and negotiations.

You may hear from discount brokers that you can avoid paying a commission to a REALTOR® if you sell your own home. However, what they may fail to mention is that in most cases, a REALTOR® is the one bringing the buyers to the table. If you are paying a fee to a discount broker to list your house on the local multiple listing service, you are required to offer compensation to a buyer’s broker/agent. In a normal transaction, sellers pay a percent of the sale which is divided between the listing broker/REALTOR® and the buyer’s broker/REALTOR®. Even if you sell your home without using a REALTOR, a buyer’s broker/REALTOR will still need to be paid. And, you lose the benefit of having a REALTOR®, a skilled negotiator, negotiate a better deal on your behalf.

Fiction: REALTORS® earn commission just by showing the home.

Fact: As highlighted in this article, REALTORS® do so much moreand bring so much more valuethan simply showing the home.

Discount brokerage firms often depreciate the value a REALTOR® provides. You may have heard brokerage firms asking if it is worth six percent of a home’s value to pay someone to show the homeleaving out the fact that REALTORS® are trained professionals who assist with not only marketing the home, but representing the sellers and protecting the sellers’ interests, negotiating to ensure their clients get advantageous terms and the best price. What’s more, REALTORS® have a limited right to practice law, so they can help minimize the transactions’ liabilities and legal issues.

REALTORS® also work incredibly hard on your behalf, giving up nights and weekends to ensure your home is shown at the best, most advantageous times. They incur significant expenses on things that benefit their clients, including marketing, insurance, education, licensing, and association fees. As such, they deserve to be paid accordingly. If there was $100,000 or more at stake, would you represent yourself in court? Not likely. Then, why would you sell your home without proper professional expertise?

Fiction: Because of the Internet, anyone can market their own home.

Fact: REALTORS® invest in programs that list a home on the maximum number of websites, getting it the maximum exposure. Additionally, REALTORS® are trained marketers and can produce professional, effective videos and other marketing tools that can best promote the home.

Most people don’t have the time, energy, or the necessary skills to create the marketing materials needed to effectively promote a home–and most people don’t have access to post homes on the same websites that REALTORS do.

If you’ve searched for homes for sale online recently, you probably were most interested in those listings that included a video. Many REALTORS® are now producing videos of homes, then using popular video websites like YouTube to promote them. It can be a great way to reach prospective buyers.

Obviously, the web is a great place to reach buyers, and because Brokers’ own websites typically see lots of traffic, they’re an ideal place to have your home posted. Most are also mobile friendly, so buyers using their smartphones to browse the web can still easily access information about your home. In summary, brokers and REALTORS® have the marketing tools and expertise to appropriately advertise your home.

When deciding to sell your home, you should carefully evaluate the different options available to you. Consider–honestly–whether you have the time, energy, skills, and expertise needed to complete a home sale transaction (and everything it includes) successfully. Have the facts as you evaluate this decision, and don’t fall victim to some of the more fantastic claims made by discount brokerage firms. If you do choose to follow the For Sale by Owner approach, be careful to ensure you are following state laws and using appropriate forms. And, remember: if you try it and find it’s not the right approach for you, you can always call a professional REALTOR® for assistance.

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