Should You Skip the Commission and Sell Your Home Yourself?

During a hot market, home buyers seem to be falling out of the trees. Bidders routinely exceed the asking price to get into a particular community or neighborhood, and it seems that all a Realtor does is put a sign in the ground and wait for the phone to ring, then come to your kitchen table and show you where to sign on the dotted line. If that’s all your Realtor does, maybe you should sell your home yourself. But here are a few things to prepare for if you go the For Sale By Owner, or FSBO route.

Just about 85% of For Sale By Owner transactions don’t close. Not necessarily because someone selling their own home can’t get offers, but because things fall apart during the due diligence period. Failed mortgage commitments, homes not “Appraising Out”, Home Inspectors finding houses in need of major repair, and requests for financial concessions by the, can all lead to a sale unraveling.

Twenty years ago, Realtors and other Real Estate agents held all the cards. A Realtor, which is actually a trademarked name that refers to real estate agents who are members of The National Association of Realtors and are held to ethical standards to cooperate with each other and deal fairly, throughout the sale process, were the only ones who had access to the Multiple Listing Service, where they found the homes Buyers were looking for. Now, Realtor.com and a multitude of company websites, provide stats and virtual tours of homes before a Buyer ever gets in his car.

Any home listed on the Multiple Listing Service can be viewed by anyone. Good professional Real Estate agents welcome this advance in information sharing. Buyers are more educated than ever before, and Sellers can look at what their neighbors homes are selling for. They can check out their agent and make sure that the agent didn’t over value the home just to get the business.

But home sales are more than just exposure. Selling a home is also a function of time. When skipping the agent, unless you are in a super hot market, prepare to market your property for any period of time from two weeks, to six months, depending on demand and your pricing. Plan an Open House. To increase Traffic, combine it with a tag sale. Even if those people visiting your tag sale aren’t in the market for a house, they may know someone who is. Be prepared to advertise. Advertising fees are generally part of the Real Estate agent’s commission, so be prepared for the cost of newspaper and home magazine ads.

Make sure your lawyer is a real estate lawyer who can guide you through the due diligence process, but be prepared for legal fees, some of which can be mitigated by working with a competant real estate agent who is detail oriented and will move the transaction through the due diligence period by following up on mortgage commitment deadlines, home inspection deadlines and keeping closing dates on track.

Finally, when selling your own home, develop a thick skin. Don’t feel hurt when people say they dispise the wallpaper that your Grandmother picked out. It sounds simple, but it’s not always so. And be prepared to have strangers walk into your home with virtually no notice, when you’d rather be making dinner. Also, walk through your home with prospective Buyers, pay special attention to medicine cabinets. Realtors often work in teams, particularly during an open house so that valuables and prescriptions are safe guarded.

If you hire a Realtor or other Real Estate professional. Interview them. Don’t just hire your child’s piano teacher. This is their business. They should understand your market. Make a list of your questions. Tell them in advance what you expect from them in terms of performance. They can’t guarantee you a contract in three weeks, but they can promise to report their marketing efforts, open house mailings and showings to you in a manner which you prefer, whether by phone, email, or written reports. They should not hesitate to encourage your review of brochures, postcards or the rest of their materials. Ask for references and call them. And remember, just because you signed a contract for three, four, six months or more. You can terminate your relationship with your agent, if they are not giving you the representation that they promised. Get those promises in writing and if the agent doesn’t live up to his or her end of the bargain, speak to their sales manager. Your listing agent is your team. Buyers have may have their own team. The commission that you pay to your listing agent is usually split with the agent representing the Buyer. If you sell your home yourself, you also need to consider that a Buyer’s representative might ask you to pay their fee, or they’ll forego showing your home to prospects.

When markets cool, or slowdown, as they are in Florida, California and Las Vegas, it takes more time and effort to sell a home. Good Realtors are worth their wait in gold in a Buyers’ market.