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Health & Fitness

Why You Shouldn't Sell Your Home on Your Own

Top 7 Reasons Why You Shouldn't Sell Your Home on Your Own

I know you have heard the success stories before of people selling their homes and bragging about how much money they saved by doing it alone.  I won’t dispute that people have done well selling their own homes and that some have saved money in the process.  It’s an enticing proposition if you think about it.  How much could the real estate agent really be doing any way?  Right?  Well that is where most for sale by owners go wrong because they think it’s easy.  I have news for you, it’s not easy!  To help illustrate this I have compiled my top 7 reasons not to sell your house on your own.

Pricing

You have heard that when looking at a house you look for location, location, location and that is sound advice.  But if I were to alter that I would add price to that equation because if you find the house in the right town and the right block and it is overpriced then what’s the point?  For anyone selling their house on their own price is a huge factor and one that can hurt you by going too high or too low.  If you price your home too high you risk scaring away a segment of buyers in your area.  Homes that are priced right sell and many times sell quickly.  It is very temping to “test the waters” at a higher price to see if someone wants it.  It is a wiser decision to price the home properly to start so it sells.  On the flip side if you market the home too low you can lose out by not getting top dollar.  Real estate agents know the market, study sales data, can tell the difference between a well maintained home and one that needs work, and can objectively put a price on a home.  The big difference between a home owner and a real estate agent is the agent has not sentimental attachment so he can look at the home as it is not how someone wants it to be.

Advertising

I recently spoke to a for sale by owner who felt he would be able to sell his home with a for sale sign because he was on a busy street.  He gets a lot of traffic by the house and that will work just fine.  In reality the person that buys your home probably doesn’t drive by it everyday.  She probably lives in another town or even another state so it is imperative to have an online presence to market your home.  Sites like FSBO.com and ForSaleByOwner.com are a nice resource but most home buyers and real estate agents do not frequent them enough to make them your sole source of advertising.  So if the sign isn’t getting it done and available sites are not going to get the traffic so what are you going to do?  The simple answer is hire a real estate agent who can properly market the home through the local Multiple Listing Service (MLS) and use their network to spread the word to find a buyer.  Agents have other buyers, colleagues, and associates who can help find your home a buyer.

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 How are you going to show your home?

Ok so now you have the home on the market and you are ready to sell, now what?  People are going to call you to see the house, some qualified, some not, some curious what your house looks like, some interested to buy, some with an agent, some without.  How do you wade through all of this and not waste your time in the process?  If you are selling your home on your own it is your job to field the calls, set the appointments, and do the showings.  When you hire an agent they handle those calls and make sure those people actually have an interest and the wherewithal to purchase.  Agents can also put a lock box on the property to allow other agents access when you are not home.  Beyond the time saving this allows you to know who was in the house and when so if the lights were left on you know where to turn.

Preparing the home

You live in a clean house and you take care of it so you don’t have to do anything before listing!  Selling a home hinges on many different factors and condition of the home is one of the important things to consider.  You want to show buyers a home they can see themselves living in.  How do you do that? Are your rooms cluttered with furniture?  Do you have a lot of pictures on the wall?  Do you have bright colorful paint/wallpaper?  Is the yard in need of some TLC?  These are some of things you need to consider before selling your home.  It can be very helpful to have a professional come in and give advice on what you might want to change, remove, or update.  This may actually save you money in the long run as many home owners think big ticket upgrades will sell their home and they may not help.  The best advice I can give on this topic is to check with a pro before doing any upgrades as some will be worthwhile and others will not be.

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Negotiating

Now comes a very delicate part of the process, negotiation.  How do you handle a low ball offer?  How do you know when to push and when to be conservative?  How do you get the best terms?  How do you handle concessions?  These are all things agents are trained to deal with and have experience dealing with.  The negotiations can make or break a deal so you want the most qualified person handling it for you.

Do you understand the standard real estate contract?

Did you even know there was a standard real estate contract in New Jersey?  I know I didn’t when I bought my first home.  It can be scary document at 408 lines and 10 pages long if you don’t know the ins and outs.  What is the inspection clause and how does it effect you?  What do I need to know about lead paint?  Is my house in a flood plain?  These are some of the topics outlined in the standard real estate contract.  If you don’t know what is in it you will not be able to get the most out of it.

Representation

Having someone working for you in any transaction is important because mistakes can be costly.  How do you handle the inspection, appraisal, and any issues that may arise from them?  Did you know that buyers can ask for concessions if something shows up on the inspection or that they can ask to renegotiate if the house doesn’t appraise?  These things can happen quite frequently so you need to be prepared.  An agent will help lead you through these steps and will have the experience to save you time, money, and aggravation doing so.  Along with your attorney they can be imperative to a smooth and stress free transaction.

Need more proof?  Check out these statistics collected by the National Association of Realtors.

FSBOs accounted for 9% of home sales in 2012. The typical FSBO home sold for $174,900 compared to $215,000 for agent-assisted home sales.
FSBO Methods Used to Market Home:

  • • Yard sign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48%
  • • Listing on Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32%
    • For-sale-by-owner websites . . . . . . . . . . . . . . . . . . . . . . . . . . 20%
    • Other websites with real estate listings (e.g. Yahoo, Google, etc.) . . . 11%
    • Social networking websites (e.g. Facebook, Twitter, etc.) . .  10%
    • Video hosting websites (e.g. YouTube, etc.) . . . . . . . . . . . . .     2%
  • Friends, relatives, or neighbors . . . . . . . . . . . . . . . . . . . . . . . .  30%
  • Print newspaper advertisement . . . . . . . . . . . . . . . . . . . . . . .   14%
  • Open house . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12%
  • Direct mail (flyers, postcards, etc.) . . . . . . . . . . . . . . . . . . . . . .  2%
  • Video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1%
  • For-sale-by-owner magazine . . . . . . . . . . . . . . . . . . . . . . . . . . .  1%
  • Television . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  <1%
  • None – Did not actively market home. . . . . . . . . . . . . . . . . . . . 31%
  • Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2%

Most Difficult Tasks for FSBO Sellers:

  • Understanding and performing paperwork  . . . . . . . . .  18%
  • Getting the right price . . . . . . . . . . . . . . . . . . . . . . . . . . .  14%
  • Preparing/fixing up home for sale: . . . . . . . . . . . . . . . . .  11%
  • Helping buyer obtain financing: . . . . . . . . . . . . . . . . . . . .  6%
  • Attracting potential buyers . . . . . . . . . . . . . . . . . . . . . . . .  6%
  • Selling within the planned length of time: . . . . . . . . . . . .  6%
  • Having enough time to devote to all aspects of the sale . 1%

Source: 2012 National Association of REALTORS® Profile of Home Buyers and Sellers

Need more info?  Contact Me today!  Ryan Gibbons 201-446-8190

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