As a home seller you naturally want to make the most money you possibly can from the sale of your home. You may even think about selling the house yourself to net more money for yourself. Before considering placing a home on the market For Sale By Owner it is important to know the drawbacks.
- While selling a home “By Owner” has the potential to save money on commissions odds are likely that the final sales price will be significantly lower netting the seller less in the long run. For example in 2017 the median price of all homes sold was $250,000, homes sold by owner had a median price of $190,000, while homes sold by owner to a person the seller knew had a median sale price of just $160,300. A well-qualified professional is able to position a home on the market to attract the highest number of buyers with the potential for multiple offers by:
- Appropriate pricing
- Presentation to market
- A home sold by owner becomes a target for bargain shoppers. For Sale By Owner properties attract buyers who are looking for a deal and who assume that the seller will sell for less because there are no Realtor fees involved. One of the biggest misconceptions of a for sale by owner is the fact they think they are going to pocket ALL of the commission savings. This is RARELY ever the case. In fact, most buyers want to share in the real estate commission savings.
- Selling a home is hard work. From initial repairs and proper market presentation to photographs and marketing to start with then once the home is on the market coordinating buyer showings, answering phone calls & emails, to negotiations, inspections, and repairs a seller going it on their own needs to be prepared to invest a lot of time, sweat, and energy into selling a home properly and few will actually succeed in doing it well.
- All the liability is on the seller. At some point everyone makes a mistake and a seller or buyer who doesn’t have the representation of a licensed agent pays for those mistakes. Attorneys can close real estate transactions but the don’t carry Errors & Omissions insurance to help protect from mistakes. Let’s face it, this is a litigious society so what home owner wants to make themselves a target for lawsuits?
- Inspections can be problematic. A seller who doesn’t know the rules can be on the hook for unnecessary repairs. A good Realtor has an army of expertise and experts behind them looking out for the seller to not only net them the most money but to save a home owner from making un-needed repairs.
- You need to be aware of your, and your family’s, safety. Real estate professionals have processes in place to ensure their safety and the safety of their clients. Inviting strangers into your home repeatedly carries risks, just as putting up personal information on the internet puts you at risk. Sellers need to be extra diligent about what is put in a listing, and especially about how homes showings are handled. Don’t show alone, ask visitors to sign a guest book and present id, and remove all your valuable from sight before showing.
In short the top reasons why sellers who try to sell “By Owner” don’t meet their financial goals are:
- The home was priced wrong
- The home was not accessible when Buyers wanted to see it
- The home was not ready for the market (repairs needed, touch ups, dirty)
- The home was not presented to the market appropriately (photos, staging, exposure)
- Potential Buyers were not vetted appropriately
- Inspection repairs were poorly negotiated
It takes a lot more than putting a sign up in a yard to sell a home quickly for top dollar and professional real estate agents know how to do it right the first time. Can someone sell their own home and net more money, the odds are against you. Are the odds better using a professional who does it every day and lives, breathes, eats real estate? Definitely.