Are You A Real Estate Do It Yourselfer

Dated: 09/04/2019

Views: 255

If you're anything like me (who am I kidding you guys are so much cooler) you're not afraid of a little "Do-it- Yourself" sweat equity.  Last year alone I learned how to change the breaks in my vehicle and clean the carburetor on our lawn mower. Chris warned me that owing our own lawn equipment was not worth the headache. He said it would end in us having equipment that wouldn't easily start when it was time for Spring's first cut.... he was right, there I said it.  So,  I know when faced with the decision to list your house for sale with a local, knowledgeable, Realtor (ahem, that's me) you might also consider just going the FSBO route. Doing it yourself has the potential to save a few bucks, yet there’s a lot to know before jumping in.

First, let's just break it down... what is a FSBO?

We use a lot of acronyms in Real Estate.  It took me a while when I first got licensed to know what they all meant.  For goodness sake, before getting into this I thought a CMA was a "country music award".  In real estate agent lingo a FSBO or “Fiz-Bow” are homes that are being sold and marketed by their owners; it’s short for For Sale By Owner. These sellers may negotiate with Buyer’s Agents to sell their house, or they may negotiate with the buyer directly. This buyer is either someone that the seller knows or a complete stranger who called off of some kind of advertising for the home in question.

As you might imagine, this situation is just peachy, well until it’s not.

A Few Points to Ponder Before Going FSBO

The decision to sell your home yourself is not one that you should make lightly. There are a lot of things that must be done in order to execute a real estate contract and even seasoned real estate agents sometimes make serious mistakes. So, before you take the leap, keep these items in mind (just for starters):

Real estate agents carry errors and omissions insurance for a reason. There is no perfect contract and the more complicated they get, the higher the risk of something being accidentally recorded incorrectly. When that mistake is a high dollar issue, E&O kicks in to help resolve it. Generally speaking, if you’re selling your own home by yourself, your errors and omissions are on you. Multiple offers, property disclosures, negotiations, deposits, inspections, title search, due diligence period, final walk through, and even the act of sale are just a few of the places where complications can occur in the transaction.

Marketing matters. Even in a seller’s market, it’s fairly unlikely that plopping a “For Sale” sign on your lawn will attract the right buyers. Sure, you might get the neighbors popping in for a look, but they’re really just comparing their home to yours, they’re not generally serious buyers. This is going to be one of your biggest expenses and time wasters, and marketing doesn’t come cheap.

You can’t just list your home on one site, you need to put your marketing where the people are — that means social media, local FSBO sites, the Multiple Listing Service and other outlets. This is where knowing your audience (your buyers) is really important. It’ll help you narrow your focus so you don’t spend as much on marketing as you could if you took a scattershot approach.

Contracts. You can’t sell a house with a handshake agreement. Well, you CAN in most states, yet it’s not advised. That maakes it real hard for the bank to finance and so forth. First thing’s first, do you have a contract you can use or a lawyer who will draft one for you? Any existing contracts should be checked over by a real estate attorney to ensure that you are protected. Sounds like you may end up paying for a professional service any way at this point.  Of course, assuming the folks who have showed at your door and entered into your home have the power (financially) to even purchase your home.  Do you know who to pre-qualify a buyer looking at you home before they show up for the appointment? Do you know the difference between a Pre-Qualification Letter from a lender and a Pre-Approval Letter?  Well, guess what??? I do! 

Handling Offers. We all expect that contracts will come in at full price and also include nice notes about how our kitchen is amazing and the buyer can already smell the bubble bath in the master suite. That’s usually not the case. What will you do when an offer comes in that’s insultingly low? The emotional weight can be massive. Most of the time, these things go off without a hitch, but there are some trouble contracts here and there. Are you confident enough to stake your equity on this gamble? On the flip side, I've seen sellers who aren't sure how to price their property and ultimately end up LEAVING MONEY ON THE TABLE.  Yea, you heard that right.  Actually, most FSBO end up selling for 7% less then those sellers that hire a listing agent. They either lose in negotiations or just price wrong to begin with.

There’s nothing wrong with selling your house yourself, but if you choose to do this, you have to realize that it’s a huge commitment, as well as essentially being a second job. You have to be ready to show your house any time a potential buyer appears. You need to monitor the market so you can see when a price change is going to be necessary. Most importantly, you have to know how to respond when there’s a problem.

There Are No Perfect Houses

Anybody can sell a house that’s perfect. There’s no question about it. However in the real world, all homes have some kind of flaw. They’re structures made of thousands of different parts, after all. That one knotty stud with the bent nail under the drywall makes your house totally unique, even when compared with other homes that are the same floor plan.

The thing with all this uniqueness is that when a home inspector comes to inspect the home, they’re likely to find something wrong. As an owner, not having a lot of experience looking at inspection reports, you may think you’re being unfairly attacked or just feel generally insulted by the findings.Especially if you're no stranger to the DYI world and that door knob, outlet or toilet was the other time you told your self you didn't need to hire a professional for.

If you can see your home the way your buyer does objectively, then you may have the stomach for selling it yourself. You have to be fair-minded, otherwise the inspection period is going to be tough to navigate through, if you make it that far... then you still have to over come the banks appraisal! 

Looking For A Pre-Inspection For Your FSBO?

Look no further than your Williams Team Family.  We help over 280 families a year buy and sell real estate. Let us connect you to some of the best licensed home inspectors, handy-men and professional contractors in our area to help you get your home in tip-top shape before you put that Red and White "help wanted" sign out front. 

Of course, if you've already come to your senses or you want to discuss more about the selling process before you make up your mind, you can contact me so we can chat. 

Your Friend, 

Steph Gras

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