Selling a house ranks as one of the highest dollar events you experience in your life. The profit you make determines your family’s future because the more money you make, the more choices you have regarding your new home. We all want to maximize our investment by getting the highest possible price with the lowest amount of expense. But first, you need to fix and update all those things that you had always planned to do for yourself and will now be doing for the next owner. That means you must spend time, money and effort to increase the value. Once that is done, it’s time to market the house, choose the right selling price and find that buyer!
Once you have the house ready, how do you get the best price in the shortest amount of time? Ask anyone, and they can cheerfully describe you horror stories about selling a house. But there’s always that one friend who tells you how they did a For Sale By Owner (FSBO) deal and saved thousands of dollars. So how difficult can it be? Why couldn’t you do it, too? And no matter how difficult it is, don’t you want to save 6-8% you would have to pay a real estate agent? Let me explain why FSBO deals are only 8% of the market and how using a real estate agent can increase the profit on your house by far more than the 6-8% cost.
Determining the Sale Price
Choosing a selling price is the most critical part of selling a house. You can always adjust down, but that first selling price is your best case scenario. If it’s too high, you may restrict your pool of buyers or be judged to be uninformed of market trends and not a serious seller. A real estate agent has the education, experience, and tools to help you get top dollar based on the most up to date information in your exact location. When you gain access to their professional databases, you get pricing history that is specific, reliable and very timely. You still choose the selling price, but it is made with the guidance of experience and verified data.
Once you choose a selling price, you have to market your house. You need to stage your home, get professional looking photos and get those photos to as many buyers as possible. These expenses can be costly, requiring money up front that you may not have, taking away from your future profit. You can try to photograph the house yourself, but if you’ve looked at any real estate websites, you can always tell when the pictures are amateur. No matter how beautiful the house, the images are dark and dreary and not the look you need to attract a buyer. And the cost and time it takes to take those pictures, write the ads, and get your house on FSBO (For Sale By Owner) websites is daunting. A real estate agent can get this done practically overnight with no upfront costs. They have photographers on staff that know how to show your house in the best light. They have years of experience writing attractive, eye-catching descriptions. They can get your house on all the websites with the most traffic.
Somewhere, there is the perfect buyer for your house that has their financing already approved, can make an offer immediately and is ready to move. They just have to see your house and choose it. But you know the saying about kissing a lot of toads before finding your prince? That’s what it is like showing a house. You have to clear chunks of your schedule to wait for potential buyers to visit. While you are emotionally involved in showing your pride and joy, the visitors are critical, rude, and occasionally seem to be looking at the house for future robbery attempts. And that’s when they show up at all. Most buyers use real estate agents, and many won’t even take a buyer to an FSBO house because they believe they have more difficulty with these one time sellers. Real estate agents can bring maximum visibility and weed out those people “just looking.” They schedule specific appointments with the most serious of buyers, making the least impact on you and your family. They show the best features of your house with a confidence that comes with years of experience, and they sell your house with a strategy and emotional distance that you can’t reach when selling your own home.
By this time, you hopefully have some offers from people serious about buying. The proposals may include lower prices, conditions on house inspections, financing approval, or selling their own home. Once inspectors have written their assessments, there is negotiating about possible repairs or questions about roof and gutter installations. When’s the last time you negotiated anything? Maybe a car price or a house improvement project bid? A house negotiation is several times the value of anything else you might have negotiated. Using experienced real estate agent can offer protection from making mistakes. They can represent you with the experience and knowledge of what are serious concerns and what are frivolous requests that don’t need to be done. They can offer you advice based on your priorities about what offers you should ignore and which you should negotiate for acceptance.
If you have ever signed papers on a new house, you likely remember the massive stack of documents that you initialed and signed, then initialed again. They make hour-long appointments for you to go over every page before signing. Who creates that paperwork in an FSBO deal? You do. As emotionally wringing as it is to say goodbye to your home, how much more upsetting would it be to make some mistake in paperwork that kills a deal or breaks some local, state or federal law? If you spend thousands of dollars on legal fees that eat up the profit from your house sale, how much money did you save by not having a real estate agent?
As you can see, selling your house FSBO is not a wise decision. Odds are, you will spend more money in the long run than if you had hired a real estate agent in the first place.