Trying to sell your home today, on your own, is an uphill battle at best. Understanding the complexities of the market, home prices, weather, marketing challenges, security, legal issues, and navigating the new TRID, paint an interesting and challenging scenario for the “For Sale by Owner” (FSBO ).
Selling your home on your own in today’s market is similar to winning a championship game without a coach. Can be done? Possibly. It’s the best you can do? It is not probable.
People who want to sell their homes on their own often have personal reasons for doing so. It is generally perceived that one will save money on the sale of their home. While this may seem like solid thinking on the surface, there are many reasons why this is not necessarily true, especially today. Industry statistics show that a homeowner will generally get a higher sales price when using the services of a professional Realtor®.
Let’s start with the TRID. This is an acronym for the TILA-RESPA Integrated Disclosure Rule. Simply put … it replaces the familiar HUD with a whole new level of complex rules and procedures that will affect your transaction. You and your buyer will meet TRID face to face at closing time. The scope of this new legislation is far beyond the scope of this article, but there are numerous web resources where one can be better informed about its procedures and requirements. In more ideal circumstances, your Realtor®, Mortgage Loan Officer, and Closing Attorney navigate these waters for you.
How do FSBOs screen potential buyers? They usually don’t. Most are so eager to sell that they open their doors to anyone. Most sellers, if you’re asking, don’t understand the difference between prequalification and pre-approval for a loan. They have no idea if their “prospective buyer” is able to get enough loan to buy their home. They may not even be who they say they are. Many, frustrated, will waste a lot of time with “window shoppers and tire kickers.”
Dealing with home inspections, organizing the home effectively, preparing the most important first impression through presenting the home’s exterior and landscaping, and knowing what to say to prospective buyers are often areas that paralyze one. sale. Additionally, a seller’s emotional involvement with the sale of their home often has detrimental downsides. The home seller is often too emotionally attached to your home to be objective in negotiations.
Most FSBOs don’t understand market prices, and your home price is often higher than it should be. Sellers often have the misconception that the sale price of their home is related to their financial needs or the amount they have invested in your property. Not so! Often times that precious four-week window will be missed when a home is first placed on the market due to a pricing error, poor layout, and other issues. Setting an accurate sales price for market entry is a skill well understood by professionals, but one that newbies lack.
Sellers should also feel comfortable communicating directly with buyers, their agents, attorneys, home inspection companies, appraisers, and loan companies. This area alone stifles most transactions. There are also numerous ways to make legal mistakes. Contracts have specific deadlines that must be managed effectively or sellers can be retained for breach of contract. TO Real estate contract to buy it is a legal document that contains deadlines, specific instructions, clauses, and contingencies that are often difficult for the untrained to understand.
Since FSBOs are extremely vulnerable to so many areas that they can stop a transaction, many sellers have the experience of seeing their sale disintegrate at or before closing due to the legal details of the transaction not being handled. In fact, the National Association of Realtors® (NAR) has collected data showing that less than 10% of all FSBOs actually sell their property that way. Less than 1% of all home sales are FSBO.
Unless the homeowner is fully prepared for the reality of selling their home on their own, many may quickly realize the need for a trusted professional partner, a Realtor®, who will effectively market their home in a variety of mediums, providing maximum exposure. send it to well-qualified potential buyers, negotiate the purchase contract, suggest financing and closing attorneys, oversee inspections, handle all necessary legal paperwork, and monitor the closing. Your Listing Agent can take care of everything you need from start to finish and communicate with you throughout the entire process.
Is it a good idea to hire a professional Realtor® to represent your best interests? You are the judge.