HOMES FOR SALE BY OWNER
Have you ever considered selling your home for sale by owner or FSBO? You can do it if you have the right knowledge and skill set. Many homeowners believe that to maximize their profit on a home sale, they should sell it themselves. At first glance, the home selling process seems simple. Why should a homeowner pay 6-7% to a real estate professional for something they could do themselves? Pretty straightforward, right?
Take for a moment if you have ever had an opportunity to ask someone who has tried selling their home by owner. They will most likely tell you that the phone starts ringing almost as soon as the sign goes up in the front yard. Unfortunately, most of those calls are not from potential buyers, but rather from Realtors wanting to list your home. Frankly, the idea of not paying the commission is attractive to any home seller. However, because of all the issues and pitfalls that can and do occur, selling a home on your own can present many unexpected problems.
For the adventurous at heart if you choose to go it alone, here are a few things you may encounter on the road to selling on your own:
Lackluster negotiating skills. For Sale By Owner properties usually attract bargain hunters, speculators, and “tire kickers”. Most FSBO buyers are merely curious, but some are real buyers looking for a steal. Right or wrong, many of these opportunists believe homeowners are uninformed about the marketplace. They can often be tough negotiators and submit lowball offers on FSBO’s because they think they have an advantage in dealing with an amateur homeowner. As the seller, you are selling on your own to save the commission. Even serious buyers will almost always deduct thousands off your list price plus another six percent discount due to lack of Realtor involvement.
Complete strangers in your home. “Stranger danger!” This is what we teach our children yet at the thought of saving the Realtor compensation, our sense of reasoning can become clouded. Ask yourself a few important questions: what do you know about the potential buyers coming into your home? Have they been pre-screened and pre-qualified by a lender? Do you know how much they can afford? Even more importantly, do you know if they have a criminal history? Are they sincerely interested really in seeing the home? Keep in mind, by inviting complete strangers into the home, unsuspecting homeowners place themselves and their children in harm’s way all to save a few bucks. Theft of valuables, robbery, home invasion, or worse — murder — have occurred in these situations. Most Realtors have trained professionals know who their buyers are, their true motivations, and whether or not they can afford to purchase your home before they arrive on your doorstep.
Potential liability. Many home sales have been lost due to incomplete paperwork, contract misinterpretations, property surveys and encumbrances, survey affidavits, title policies, third-party financing, HOA bylaws and restrictions, lack of inspections, appraisal issues, or not meeting the state’s disclosure laws, and the list goes on. Ask yourself how you plan to handle a dispute with the buyer if one arises. What is your Plan B if the home doesn’t close? Even worse than a failed home sale, many lawsuits have occurred in For Sale by Owner transactions after closing due to non-disclosure of existing or previous latent defects. Are you completely informed of all the steps necessary to stay out of court? Before you venture into unknown territory, make sure you understand all the details essential to successfully completing a real estate sales transaction.
Lost free time, nights and weekends. Complete accessibility is one of the key components to selling your home profitably and competently. You must be available to answer the phone calls, answer questions, and provide property tours at any given time. Many homes have stayed on the market much longer than necessary because of an owner’s unwillingness or inability to show the property when potential buyers wanted to see it. Recognize that a given number of hours each day are vital to selling your home.
Lack of enhanced marketing skills. Unless you are an incredibly skilled marketing specialist, most earnest buyers will never know your home is up for sale. Statistics show that approximately 92% of buyers buy a home that was presented to them by a real estate agent. While sometimes not initially, individuals searching for homes almost always end up working with a qualified Realtor. The process is much easier for the buyers because the agent does all the legwork, the service costs them nothing, and the contract is negotiated on their behalf by their real estate professional. The key to a successful FSBO transaction is to be fully prepared, knowledgeable of the contracts, and understand the pitfalls. Some FSBO’s discovered that the lost money as a result of poor decisions outweighed the commission.
Exclusive Properties Realty – Your trusted source for homes for sale by owner in North NJ.