Has The Internet Killed The Real Estate Pro? Understanding DIY Home Sales
Just as it has done with so many other facets of our everyday life, the Internet has redefined the way that homeowners buy and sell their homes. Long gone are the days that a buyer visits their local bank to complete a mortgage application or spends days on end walking through available properties. Email, online MLS listings and web-based homeowners insurance applications have made shopping for a home more convenient for home buyers and sellers alike. But the benefit doesn’t stop at convenience. Home sellers who previously relied solely on real estates agent to sell their homes have become empowered by these once non-existent tools and have taken more of the home selling duties into their own hands. So much so, that now more than ever sellers are choosing to forgo a Realtor completely and instead list their property as For Sale By Owner (FSBO).
But the Internet hasn’t acted alone.
Coupled with the current economic recession, the perfect storm has brewed making home sellers eager to sell on their own and avoid paying real estate agent commissions which can be as high as 15 percent of the sales price of their home. Many sellers believe that as long as they have a good real estate attorney in their corner the need for a real estate agent becomes obsolete. Put in a little extra time and effort and the payoff is saving some serious cash- how could they lose?
But selling a home without a real estate agent isn’t as easy for many sellers as they originally think it will be. There are some important things for a seller to keep in mind when deciding whether or not to sell a home on their own:
1- Know what’s involved
A Realtor performs many tasks on a seller’s behalf only some of which include research, showing the home, negotiating with buyers and orchestrating the sale until closing. Before you decide to sell your home on your own, be sure to have a thorough understanding of what you will need to do.
2- Have the time
Which brings me to my second point- make sure you have the time and energy you will need to invest into selling your home. Work out the details ahead of time such as: If you and your spouse work full-time jobs, who will communicate with potential buyers that want to see the home during business hours? And speaking of time, consider how eager you are to move your home on the market. Studies have found that homes listed by Realtor’s will sell faster than those listed as FSBO. So make sure you have some time for your house to sit on the market and that you’re not in a crunch to sell.
3- Do your market research
One of the most important duties of a real estate agent is to perform market research to see what comparable homes in your area are selling for. They will look at homes sold in the recent past and suggest an asking price for your property by taking into account pricing per square foot and your home’s unique features. If you choose to list your home as FSBO, make sure you understand the current market so that you don’t end up selling your home for less than what it’s worth. Likewise, you don’t want to price your home for more than what it’s worth or you could end up wasting some serious time.
4- Can you negotiate?
You may have already considered this but it’s important to mention. Some sales negotiations are easy- a buyer makes a reasonable offer, there is little back and forth and an agreement is made. But this is not the norm. Be prepared with how you will handle low-ball offers and how you will deal with pushy buyers. Realtors are trained on how to negotiate a home sale and they come to the table with strong negotiating tactics that balance professionalism with hard-nosed salesmanship. Especially if you have an emotional connection to the home you are trying to sell, make sure you are prepared to handle the grit of the negotiating table.
5- Understand disclosures
Lastly, in certain states sellers are required to legally disclose any and all issues with the home that they have knowledge of so that buyers don’t get surprised with major issues after closing. Some sellers choose to forgo a detailed disclosure by offering a cash incentive to the buyer. Typically a real estate agent would prepare this disclosure for you and advise you as to the best course of action. If you don’t use a Realtor, make sure you understand what is required from you in terms of a disclosure so that you are complying with real estate laws in your state.
No one can tell you the best way to sell your home. You need to assess your own situation and consider the points above to decide what route is best for you and your financial situation. As always, getting informed is the most important step towards making wise consumer decisions. Whichever path you chose- best of luck!