ByÂ Aryeh KatzÂ ofÂ Investopedia
For one thing, think of the savings youâ€™ll pocket â€” potentially tens of thousands of dollars or more â€” if you cut out the real-estate broker. But the headache and work involved may not be worth the savings for some.
Find out whether youâ€™ll be able to sell your own home and what to expect if you choose this route.
Your first consideration should be whether you can get the word out. Sure, you can put a sign on the lawn and make a number of relevant Internet postings, but be aware that youâ€™ll be missing out on the following:
Not getting enough exposure may result in your property sitting on the market for a long time. If it sits long enough, youâ€™ll likely be forced to sell at a lower price. A home that sits too long on the market can also become stigmatized, leaving you without any traffic. People think, â€œThere must be something wrong with it if it hasnâ€™t sold already.â€
The real-estate market is dynamic, always in flux, with prices moving constantly â€” sometimes quickly, sometimes less so. If you canâ€™t correctly gauge the marketâ€™s direction and speed, you may also fail to assess your homeâ€™s correct value. This effectively renders you â€œout of marketâ€ and results in you selling your home unnecessarily cheaply or â€” until you correctly assess its worth â€” overpricing it and waiting.
Contrast this with the instant access a real-estate agent has to home-sales information. Most real-estate offices are equipped with software that can generate instant comparative market analysis pricing, a system that takes the subjectivity out of the process and provides an immediate selling range. In active markets, this is an invaluable resource.
This may be the most oft-overlooked part of the do-it-yourself process, and one that should not be considered lightly. Do you possess the skills necessary to successfully negotiate the sale of one of your most valuable possessions? Can you effectively manage the process through to a close against a seasoned broker or real-estate lawyer?
Remember that you may be up against professionals who are keen negotiators and know the sales process well. They may suggest all sorts of terms and conditions that sound reasonable but really arenâ€™t in your best interest. Even an unseasoned real-estate agent is likely to be aware of the implications of various terms and conditions â€” will you be?
If you have never been involved in serious negotiations with savvy professionals, you are at a serious disadvantage. Your lack of experience could negate any of the benefits of having done it yourself.
Should you choose to have your real-estate lawyer negotiate the sale, the fees may be even higher than those of a broker; the tradeoff is that you may get a higher level of expertise.
Perhaps the most dangerous aspect of the home-selling process involves contracts and closings, for which you will require the services of an expert who understands contracts and can steer the process to a legally sound conclusion. Many closings have been marred by legal niceties that led to unexpected outcomes or, worse, lawsuits, and ultimately a failure to sell at a price and time of your own choosing. Unless you are a lawyer yourself, this is one aspect of the process that you should not undertake without professional assistance.
Large real-estate firms now offer numerous value-added services, such as pre-qualifying buyers for financing â€” and in some cases providing the financing itself. If you are not using such a firm, realize that your deal may wait until financing can be secured, and that time delays often produce buyerâ€™s remorse â€” a condition that sees potential buyers talking themselves out of a deal the minute they walk out your door. Better always to lock the deal shut as soon as possible. That means having the resources at hand to do so.
The eccentricity factor
Are you reducing the number of potential buyers because you havenâ€™t listed with an agent? Some house shoppers will be apprehensive about engaging a â€œfor sale by ownerâ€ simply because itâ€™s not the norm. Anxieties and apprehensions will steer some people away from visiting your home. For a lot of buyers, an established brand name and a sales professional with polish are more palatable. Ask yourself whether your decision takes you outside the real-estate mainstream.
There is little doubt that you can fill an agentâ€™s shoes and sell your own home â€” but it will take preparation to do it successfully. How much time do you have? And whatâ€™s your time worth? In the end, you need to determine whether your investment of time and energy will be repaid by the commission you save.