Should You Try to Sell Your Home Yourself?
As in - Without a licensed Real Estate Professional.

Should You Try to Sell Myself or Hire an Agent?

Sure, give it a try. But here are a few questions to ask first:
1. Is the market appreciating or depreciating on your block?
2. Can you correctly price the property?
3. Is the property in TOP condition?
4. Do you have time for a large second job?

Is the market appreciating or depreciating on your block?

Why is this important? If the market is appreciating on your block, then you might be able to sell your property yourself. In an appreciating market, sometimes all it takes to get a buyer is a sign on the lawn. So put out your sign and open the door, after you have decided on a price, and after you have your forms ready to fill in for the offer or purchase agreement, and after you have all the disclosures you need, and after you have set aside the time needed to meet people at the property - on their schedule - for the next 60 days straight while the sale concludes.

Most of the stories about a successful For Sale By Owner fit into one of two catagories: A) - an experienced seller who knows what it will take to sell a property and is still willing to do it -basically an agent without a license, and B) - a fortunate owner that stumbled through the transaction asking questions of professionals every step of the way, all the while "borrowing" forms, getting "advice", and "doing everything on their own". Lets face it, there are some successful sales that do not involve real estate professionals. But as often as not, if you get those sellers alone and ask if they would do it again, most will say no, or at least they'll say if the conditions were the same, maybe. Few sellers will committ to another FSBO. Why do they say that? Because it takes a lot of time, experience, and effort to sell property. Every deal has a glitch - some will be small and some will not be small.

2. Can you correctly price the property?

This doesn't mean you have a few local agents tell you what they'd list the house for and then you work from there. This means - do you know what your house is worth? Because you won’t have access to the large pool of buyers that the MLS provides, you don’t want to waste any buyers that come to look. If you can't support your value with real data, you can be leaving money on the table or you may have to wait for the market to get up to your value. An appraisal will cost around $500. When you price your property and put the "By Owner" sign out, be prepared for buyers to offer you less that you are asking. Unless your block is red hot and properties are selling overnight, buyers who look at fsbos, will immediately discount your asking price by what would be the commission. Buyers usually offer 5-10% less than asking to start with anyway, but on a fsbo, they'll start lower. Having a formal appraisal will solidify your pricing, but an appraisal is only a "snapshot" that will not reflect changes in a moving market.

3. Is your property in TOP condition?

The best FSBO property is one that is in excellent condition, updated everywhere, the perfect floor plan for what is desired today, all in the best location. If you have all these and you know what the sale price will be, get your sign in the yard. Condition of the property from the curb to the back fence, is an important variable in the sale business. A property that needs paint, carpet, roof, landscaping, cabinets, bath tile, etc is not as desireable as a property without all those needs. The majority of buyers want "it" done. You want to appeal to the majority of buyers - not a few buyers. If you aren't able to or don't want to fix, upgrade, or replace anything on your property, you had better get an agent. If you are willing to do things, you need to have in your mind how much those thing$ are negotiable. Agents are good at giving vision to buyers, because they visit a lot of property with them and they learn a buyer’s taste, willingness, and ability. You will have to work fast in your own property to learn as much about the buyer and how to approach their concerns.

4. Do you have time for a large second job?

The only real reason I ever hear that some one wants to sell on their own is to save the commission. Many owners will end up paying something a commission, even when they say they FSBOed it. So, here's the math on a sale of a $500,000 property that will sell in 60 days, including weekends, from the sign in the yard to the transfer of funds and deed. I'll use a 6% commission for this example: 500 x 6% = $30K. So, $30K / 60 days of work = $500/day. $500/8 hours = $62.5 per hour. So that seems like a lot of money for 2 months work. And, if you can sell it in 60 days for the same price a professional can, you have a great savings. However, the agent does not get $30K in commission at the sale because of all the ways the commission gets split. Most of the commission goes to business operations and the other parties. This is why successful agents sell more than one property at a time! And, it is also the same reason many agents don't worry about a fsbo - it is not as much of a loss to them as the fsbo seller thinks. An average agent will only receive 25% of that $30K ($7500) for 60 days of work which becomes $16/hour before self employment taxes*. Also, when you hire One agent to List your property, you are actually hiring All the people in their company and not just the listing agent. You will be accessing the thousands of agents that will see that listing, and subsequently, all the customers that each of those agents is communication with all for a small fee. (*if the sale price is $250K the agent works for $8/hour, and for a $100K property only $3/hour for 60 days of work.) In my state, more than 70% of fsbos will list their property with an agent.

So if you have a greatly appreciating market, an updated property, and you know how to do the paperwork, get your sign. But before you start selling your property yourself, make sure you don't alienate any good agents. You will notice many articles about fsbo problem sales are written by real estate agents. Agents always get called in to clean up the messes of those who think it is an easy-breezy business. One last thought, the how to FSBO books are written by people who want your $20. By the time you finish the book, an agent could bring a buyer.

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