7 Reasons Selling Your Home Is Not a DIY Project
When the time comes to sell your home, you may be tempted to forego hiring a Realtor and do it alone. After all, DIY is the hot trend these days and who doesn't like to save a few dollars? Being a great fan of saving money with DIY projects, I totally understand. But, before you pound a “For Sale” sign in your front yard and start counting the money you’ll save on a Realtor’s commission, there are a few facts you should consider because this may be a DIY project that ends up costing you money rather than saving you money over the long run.
To buy and sell a house is no simple task. In fact, national statistics show that only 9% of all “For Sale By Owner” (FSBO) efforts are successful. Only one out of every twelve people who attempt to sell their own home actually end up with a closed deal and approximately 24% of those transactions involved a sale to a friend or relative, 15% involved a buyer directly contacting a seller, and 1% when the owner was a licensed agent.
When DIY sellers were surveyed by The National Association of Realtors, the most difficult aspects of going FSBO were cited as follows:
- Understanding and performing paperwork: 18%
- Getting the right price: 13%
- Preparing/fixing up home for sale: 12%
- Helping buyer obtain financing: 3%
- Attracting potential buyers: 3%
- Selling within the planned length of time: 7%
- Having enough time to devote to all aspects of the sale: 6%
The sale of real estate is not a simple process and the path to a successful outcome can be riddled with pitfalls, challenges, and detours for the DIY seller. Based on The National Association of Realtors study feedback, here is my list of 7 factors you might want to consider before you decide to sell your own home.
1. Preparing the Home for Sale
Having lived in your home for a number of years, you may feel that little flaws and imperfections add to the overall charm of your home. Maybe you don’t even notice many of them at all. Today’s buyers are smart and savvy. They will be looking in every nook and cranny, hunting for a reason not to buy your home or to lower the price you are asking. A Realtor knows what will turn a buyer off and can help you focus your efforts towards what needs to be repaired or changed to facilitate the sale of your home quickly and for the highest price.
2. Pricing Your Home
This may be the most critical element in the successful marketing and sale of a home. Because most people are emotionally attached to their property, they often have difficulty pricing it correctly. Consequently, many FSBO properties are overpriced and languish on the market for days, weeks and months. On the other hand, some are sold below the market price simply due to inexperience and lack of market knowledge. Not a happy outcome for the seller.
A Realtor has the tools and the experience to accurately determine the best listing price for your home. Not only does he know the local market, but he monitors the fluctuations and changes on a daily basis and monitors conditions that can have a direct correlation on the price of your home. Statistics compiled for 2013 show that the typical FSBO home sold for $184,000 compared to $230,000 for a sale handled by a Realtor.
3. Dealing with Unqualified Buyers
Because homeowners don’t have the opportunity to meet potential buyers in advance, they are at the mercy of unqualified buyers. Many spend time and effort showing their home to people who may not be financially able to buy it. A real estate agent will screen for qualified buyers and require they at least be pre-qualified by a lender. When it comes time to make an offer, a real estate professional will make sure they have a pre-approval and are ready to actually buy the property. Entering into an agreement to purchase with a buyer who has not been pre-approved can result in the sale falling through because financing was not obtainable. This is a valuable waste of time when you are trying to sell your home in today’s market.
4. Marketing a Home Takes Time and Money
In addition to the time you spend preparing your home for sale and keeping it in tip-top shape for buyer visits, you will also need to perform the marketing and actual showing of your home. You will need to develop and execute a plan for getting the word out that your home is for sale. Approximately 92% of all real estate transactions begin on the internet so you will need to decide how and on what sites you will display your home. Professional grade photographs are extremely important here, because if a buyer doesn’t like what she sees online, you can be sure she will never make the effort to see your home in person. You should also have a brochure or data sheet somewhere in front of your home as well as a sign to capture the drive-by customer. Last but not least, you should be available for showings on short notice, any day of the week, or time of day. Buyers often have limited time frames for when they will want to see a home for sale and if you are unable to be accommodating, you may lose the opportunity to show your house altogether.
5. Be Prepared to Negotiate with the Buyer and His Professional Team
Rarely is a home sold without negotiating the price and the terms of the purchase. It is a given, as a DIY seller, you will be negotiating with a buyer who wants the best deal possible but have you considered the long list of professionals you may have to deal with to successfully complete the sale of your home? That list can include the buyer's real estate agent who works in the best interest of the buyer, his client, the buyer’s attorney, the home inspector hired by the buyer to find problems with your house, and the appraiser.
6. Be prepared to handle lots of documents
Mandatory regulations and disclosures involved in the sale of real estate have become more extensive and complicated over the years and that means more paperwork. You will need to make sure you have all the necessary documents properly prepared and signed. This proves to be the most difficult task for most DIY sellers to complete. Ultimately, missing or improperly completed documentation can delay or derail the sale.
7. Consider Potential Costs involved in Selling
When you list your home with a Realtor, the cost of marketing your home, negotiating, filling out and filing documents and representation at the closing are costs covered by and included in the commission. Consider what you will spend on marketing and advertising. Be prepared that most likely your buyer will be represented by an agent and the expectation will be that you pay his or her commission which will generally be 2-3%. Determine what other professional services you may need to pay for such as a real estate attorney. In the long run, you may find you are not saving as much as you previously thought you would.
What a Realtor Will Do
A Real Estate Professional can pull all the diverse pieces together and complete the puzzle for you.The Realtor is there protecting your best interest, running interference, and resolving any issues that may stand in the way of you successfully selling your house. I hope when you are ready to sell your home, you will decide to choose a qualified and experienced Realtor to guide you through this very important process and market your home to its absolute best advantage.
Should you decide DIY is not for you when it comes to selling your home, please give me a call. As your Realtor my objectives are simple, to show your home to the market quickly and at its best advantage, to bring as many qualified buyers as possible to your home, and get you the most money in the least amount of time.
To accomplish this my Marketing Team and I have put together a plan that incorporates 13 years of real estate experience with the latest techniques, technologies, and tools to showcase your property. We believe that every home has a story, and we tell that story using professional photography, 3 D Imagery, a featured blog post and then spread the word far and wide on social media.
For more details and a free consultation please give me a call. My team and I are standing by and ready to help!
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related posts: Thinking About Selling? Do It Now - Here's Why
Preparing to Sell Your Home - It's a Journey by Minnesota Property Group
Great article. I have seen so many people have sales fall through or not get as much money because they did not know how to negotiate. Best left to the professionals. Thanks for posting.
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