Nearly half of FSBO homes are sold to a friend.Â
That's one of many interesting statistics at http://www.realtor.org/research/research/fsbofacts
Let's review five things about selling a house without a Realtor
1) Many sellers think they will save a real estate commission.Â Here's a little analysis of that math.
If the selling commission is 6%, half of that (3%) goes to the agent who brings the buyer.Â If you're not willing to pay that 3% to the buyer's agent, you are greatly limiting the number of buyers who will even see your home.
I generally spend about 1% of the sales price on marketing - advertising, flyers, staging consultations, and other sales expenses.Â If you do that too, now you have saved 2%.Â
But most FSBO buyers realize that you (are trying to) save the commission, which they think of as 6%, so they adjust their offer by that amount. You save 2% to get an offer that's 6% lower than you wanted.Â Â How does that math wind up with more in your pocket.
2) Selling a house is a very complicated transaction and is probably the single largest financial event of one's life.Â Because of those two factors, friends or not, it is very easy to have a misunderstaing that leads to a lawsuit.Â Remember anyone can sue anyone over anything, and when they do, it's like two lawyers tearing up YOUR $1,000 bills.Â Liability can be enormous.Â That's why Realtors carry Errors and Omissions (E & O) insurance.Â In addition to that, I carry a $1,000,000 liability policy and I know what I'm doing.Â Â How does that compare with your insurance and your experience selling homes?
3) Owners selling without professional assistance said the biggest problems were getting the price right (23 percent), preparing the home for sale (18 percent), selling within the length of time planned (14 percent), having enough time to devote to the process (13 percent), attracting potential buyers (13 percent) and understanding and completing paperwork (10 percent).Â That's from http://www.realtor.org/press_room_secured/public_affairs/tpfsbo
4) Home buyers today start their search on line, and 45% use www.Realtor.com.Â Only 15% visit FSBO sites.Â
5) Much as you would like to think otherwise, you do not set the sale price of your home (nor does a Realtor).Â The market sets the price, and it's almost impossible for you to know that market price without a Realtor.
So if you want to net less money, expose yourself to significant liability, guess at the market value and put up with the five headaches in #3 above, sell your house without a Realtor.Â
We all know of almost universal regulations requiring smoke detectors in homes when they're sold, but more and more, carbon dioxide detectors/alarms are also being required.
April 1 is the deadline for Oregon to have a carbon monoxide alarm in almost every home sold or newly rented.Â I say "almost" because the trigger is for homesÂ
"containing a carbon monoxide source".Â Typically a gas furnace, range,
oven, fireplace or water heater is a carbon monoxide source.
A Q & A on the subject from the US Consumer Product Safety Commission is here
In short, ask a Realtor for a Competitive Market Analysis (CMA).Â
will show you what comparable homes in your neighborhood have sold for
recently (the most critical number) and the list price of similar homes
currently for sale.Â
Much as we would like to think we can set
the selling price of our home, in fact it is the market that sets the
price.Â Pardon the comparison, but it's no different than used cars -
worth what someone will pay.Â Â That's why the key number is what
comparable homes have actually sold for.Â
Remember that every
buyer will have the same numbers available as your Realtor gave you.Â
needn't sell your home for the average comparable sold price.Â You may
get more if your home has unusual value-adding features (newly remodeled
kitchen, extra large lot, view, etc.), but the reverse is also true.Â If
your home has a 1960's kitchen, small lot and view of the back side of
an apartment house, you will likely get less than average.Â Â A good
Realtor can advise you on all those (and other) pricing issues.Â
Valuable as it is, you need a lot more than an MLS listing to sell any
home if you are interested in
1) the best price
2) assistance in preparing your home to generate the best offers
3) assistance in evaluating all offers (highest price is not necessarily
the best offer)
4) listing on Trulia and a dozen other high-traffic sites
5) screening people who want to preview your home (even if you are on
the MLS don't let in anyone who comes to your door without an agent -
they could easily be out to steal, on that or subsequent visits.Â
Instead give them your agent's card and tell them to contact your agent.
6) eliminating showing your home to people not financially able to buy it.
7) Helping you negotiate with potential buyers - there is so much that
happens even after you accept an offer.Â Do you agree to fix all the
items on the buyer's home inspection list?Â Give a credit for them
instead?Â How much? Â And a dozen or more common points of disagreement between sellers & buyers. Â
That's a real "short list" of what you get from a good Realtor.Â If
you'll talk with two or three you'll get the idea, and you'll be
delighted to pay a percentage of your sales price for all the services you need besides an MLS listing.Â
Making payments, or being current on payments does not prevent a sale from being a "short sale".
If a sale would not net enough
to pay the current mortgage balance (and you are unable to make up the
difference from your own funds), it is a short sale, whether or not you
are current on your mortgage payments.
The most common short sale does involve people who are unable to make the mortgage payments, but that is not required.
Would you hire the fox to guard the hen house? Even if using the
seller's agent might save you a few bucks (it won't), there is a lot
more to the home buying process (yes, it's a process) than offering X
and having the seller say "OK".
that's only the beginning
Every home sale is a negotiation of dozens (if you're lucky) or more
(if you're not) conditions, contingencies and possibilities, both on
your side and the seller's side. You need someone whose fiduciary (that
means looking out for your money) is to you and not the person on the
other side of the negotiations.
What turns up on your home inspection?Â "This is the finest home we've ever seen.Â There is absolutely nothing amiss anywhere. Every system and appliance works perfectly".Â Never happens.
How do you decide what to ask the seller to repair (or credit you for the cost of repairs so you can get it done yourself).Â Ask for every single thing on the average home inspection and you will most likely anger the seller so that, at the very least subsequent negotiations are very difficult, and you may just have the seller tell you to go away.Â
It's a process.Â It's a process.Â It's a process.Â Am I getting through?
Communication with your agent is paramount (whether buying or selling), so first ask the question of your Realtor.
Before you get too disappointed with your agent, consider two truisms of real estate.
1) If your home has not sold in 30 days (maybe 60 in today's market),
either it is unusual ($1MM+) or sometimes just "weird" (by an average
home buyers estimation) OR it is over priced for the market.
2) Your home will sell when all the lower-priced comparable homes on
the market have sold. (If someone can buy a comparable home to yours
for less money, why would they buy yours?)