“Frankly, I don’t think a Realtor does much that I can’t do myself,” a New Jersey homeowner tells CBS News.
It’s understandable that many real estate consumers feel this way; after all, the only part of the process that they see is an agent pounding a sign into the yard, hanging a lockbox on the door and then sitting around for a couple of hours during open houses, right?
Surely it can’t be that hard to sell a house. And just think of the money you’ll save if you sell it yourself.
Lots of jobs look easy to outsiders. But, before you head to hunt for real estate contracts, before you join one of those nifty For-Sale-By-Owner (FSBO) websites, read on for three things you should consider.
1. Can you get the price right?
Every year, the National Association of REALTORS ® (NAR) surveys FSBOs about the types of problems they encountered when selling their homes.
Thirteen percent of them said that setting the right price was very challenging.
Of course it is. Determining the market value of a home isn’t something someone learns overnight – it takes years of experience and neighborhood knowledge to get it right.
Because crunching these numbers is something we do back at the office and not in front of the public, it seldom ends up on the short list of “things a real estate agent can do for me.”
A home should typically be priced at or close to its market value. So, how does a homeowner with no real estate experience come up with the appropriate listing price?
You’ll need access to recent home sales in your area and for that you’ll need a real estate agent. Sure, you can jump onto Zillow and get one of their lame “Zestimates,” but since they don’t have access to many of our MLS statistics their valuations are pretty much worthless.
In fact, a few years ago the CEO of Zillow relied on his company’s Zestimate, known in the industry as an automated valuation model (AVM), when pricing his Seattle home.
The home was priced at the Zestimate (of $1.75 million) and eventually sold, for 40% less, or $1.05 million.
Think of the Multiple Listing Service as the Kelly Blue Book of the real estate world. Just as you wouldn’t dream of putting your car on the market without learning what similar cars have actually sold for recently, so should you not rely on an AVM or take a wild guess about your home’s current market value.
2. Getting the word out
While the best listing agents wear many hats and perform a variety of jobs for their clients, the number one most important job is marketing. Gone are the days when an ad in the Sunday paper was all that was needed to generate interest in a home. And, as valuable as an MLS listing is to let real estate buyer’s agents know your home is for sale, it too is not enough.
Today, marketing a home for sale requires multiple platforms and, since most homebuyers begin their search for a home on the Internet, online marketing is critical. A homeowner lacking in marketing expertise may leave valuable equity on the table with a DIY marketing plan.
3. That pesky legal paperwork
Completing the contracts and other paperwork is one of the most challenging aspects of the home sale for most FSBOs, according to the NAR survey.
Hey, we don’t blame them for being confused. Real estate contracts are written by attorneys and anyone without real estate sales experience is bound to think they were written in Greek.
From the offer to purchase to the addendum, disclosures and amendments, the average real estate deal is loaded with legal paperwork.
Do you know what to look for in the purchase agreement? Do you know how to structure your response to a potential buyer to your benefit? What form will you use if you need to make changes or additions?
There are far too many places to run afoul of your best interests when it comes to the paperwork. Why take the chance?
Selling a home when you don’t do so for a living is complicated. While it’s not impossible to do so without a real estate agent, it isn’t wise. Not if you hope to make the most amount of money possible in the shortest amount of time. We’re happy to speak more with you about this – give us a call.