Top Pitfalls for “For Sale by Owner“ Sellers
Many people are unsure whether they should take the for sale by owner (FSBO) path or use a professional real estate agent.
At first sight, it looks like a great decision to sell your home yourself when you consider that you can potentially save the average 6 % commission you would normally have to pay the real estate agent.
However, what the majority of people don't realize is that it isn't as easy as it looks like.
Since we understand the significance of this issue, we decided to write an article explaining everything you need to know about top pitfalls for sale by owner sellers.
You may not make as much money
Let’s start with the basics. As we already mentioned, people often think they’re going to save money by selling their home without an agent, but the opposite is true (or at least could be).
You can actually lose money by not using the services of a professional real estate agent. It could seem irrational at first but consider that we have real estate agents for a reason and that they are specialists in their field.
What are the actual issues that can occur when you decide to sell your home yourself?
Let’s have a look.
1. Do you have vast experience in negotiating home prices?
Every person that decides to sell their home themselves is somehow aware of negotiation skills, but the critical question you need to ask yourself is if you're really that good.
After all, knowing who you're up against is essential, and in this case, you're standing in front of the buyers agent who most likely negotiated hundreds of real estate deals in the past.
Another issue is knowing how much can you negotiate, which introduces us to the next issue.
2. Do you know how to do proper market research?
We must remember this, real estate agents are professionals in every aspect of their business. One of the key tasks of a professional real estate agent is analyzing the local real estate market. By knowing the average home price in your neighborhood along with other important information, your real estate agent can set your home price correctly and know what terms are worth negotiating for.
Doing this yourself is also obviously possible, but you're most likely not as experienced as the agent, which can lead to potentially losing tens or even hundreds of thousands of dollars (depends on your home's value)
3. Do you have the time, energy, and work ethic?
One thing you mustn't forget is that real estate is a full-time job. Selling a home isn't an easy process, and real estate agents have a lot of tasks to do when selling a property. Now, imagine taking over the responsibility for all the tasks. Taking the FSBO path is very time consuming, which can be strenuous if you're working a fulltime 9-5 job. Even with your full attention, you will still struggle to replace a professional real estate agent.
4. Can you emotionally handle the sale?
Most people get emotional when being for sale by owner sellers, and we are not surprised. After all, imagine that you've lived in a property for years, and now its time to sell it. You remember all the great memories about what you did there with your friends and family, and you become even more emotionally attached to it.
Why is getting emotional when selling your home such a big problem?
Being emotional about selling your home increases the probability of making foolish mistakes, such as taking things personally.
Real estate agents are used to rejection and hearing comments about properties. But what if a prospective buyer negatively comments your home or makes an offer which is much lower than you expected? You're probably going to be offended, and more importantly, you could lose a great deal just because you haven't done enough market research and you're emotional about our home.
If you know that this would be you if you were selling your home, we strongly recommend contacting a professional real estate agent.
5. You need to qualify the buyer
So you finally found a potential buyer? Now it's the time to make sure they are actually qualified. Not having any skills in determining a buyer's qualifications is one of the biggest problems you can encounter when selling your home.
You may think that all you need is to get a mortgage letter. But don't forget that there is a huge difference between being pre-approved for a mortgage vs. being pre-qualified.
The pre-qualification isn't something you should even be paying attention to.
Pre-approval is what matters.
6. You could potentially expose yourself to legal risks
Each area has its own laws and regulations about selling properties. There is a lot of paperwork involved in the process of selling a home, and if you don't want to hire an agent, we recommend at least for this step to get help from a professional.
We understand that attorneys aren't cheap, but when it comes to getting your paperwork right, they are worth the investment.
7. Marketing a property isn't as simple– even more without an established network
You can list your property online as everyone else, but will it help you find potential buyers? It primarily depends on one thing– excellent marketing.
An excellent marketing ensures your listing gets noticed by highly interested potential buyers.
An agent will also list your home online, but the difference here is that real estate agents also get the word out across a network of agents working for buyers in your area, which speeds up the process.
Being a for sale by owner seller isn't as easy as it looks at first sight. After reading our article, you now have the necessary awareness about this topic, which will help you to make the right decision when selling your home.
If you have any questions, feel free to contact us.