FSBO – PROBLEMS TO LOOK OUT FOR

How to Sell Your House Without a Realtor

You鈥檙e ready to put your house on the market, and you鈥檝e decided to go it alone.

Are you really saving money?

By far, the most common reason for someone to try to sell a house without aRealtoris to save money by avoiding a commission fee.

鈥淭his is a very valid reason,鈥 saysDeb Agliano 鈥 Re/Max Andrew Realtyin Medford, Massachusetts. 鈥淭he problem is, buyers know the seller isn鈥檛 paying a commission, so they take that into consideration and make a lower offer.鈥

Like any other real estate transaction, the final sale price, and who pays for any commission, a home warranty and closing costs are all negotiable. Sellers without an agent need to be savvy in order to come out on top. According to the National Association of Realtors, in 2014 the average For Sale By Owner home sold for $210,000 versus $249,000 for a home sold by a real estate agent.

鈥淚n most cases, people think they won鈥檛 pay any commission at all,鈥 says Jason Bowman ofThe Jason Bowman Team at Re/Max Elitein Mason, Ohio. 鈥淏ut if the buyer has an agent, you鈥檒l have to pay their 3 percent commission. And the fundamental problem is, the buyer鈥檚 agent represents the best interest of the buyer 鈥 and you wouldn鈥檛 know the difference because you鈥檙e not entrenched in the business every day.鈥

In the hunt for a new house, K. Lee Tumlinson Jr., of Peyton, Colorado, wanted to buy a FSBO property. He says he鈥檚 thankful his real estate agent, Ami Quass, was willing to tackle the extra paperwork produced by a seller who was unsure of the process.

鈥淭he Realtor ends up having to represent both parties, once both parties agree to start working a deal,鈥 he says. 鈥淲hich means the Realtor ends up having to be not only the buyer鈥檚 Realtor, but also has to accomplish work that normally a seller鈥檚 Realtor would do. The seller agreed to pay commission.鈥

Selling your house yourself requires meticulous attention to details in order to obtain the optimum price and avoid litigation after the sale.

Do you really have the time?

It鈥檚 after dinner 鈥 you鈥檙e curled up on the couch watching TV, and there鈥檚 a knock at the door from a potential buyer (or maybe just a nosey neighbor?). Is it safe? Is it legitimate? How would you know?

鈥淒oes a potential seller really want to answer calls or a knock on their front door from complete strangers and invite them into their home for a look?鈥 asks RealtorDeborah Colmanin Folsom, California. 鈥淎n experienced agent will meet with and pre-screen a potential buyer prior to showing homes. The agent will also ensure that buyer is preapproved for the price range in which they鈥檙e looking.鈥

Safety and privacy are also points to consider when you鈥檙e selling a house without a real estate agent.

鈥淩ealtors have sophisticated tracking devices when monitoring your home during a sale process,鈥 saysJonathan D. Reed of Fairfax Realtyin Fairfax, Virginia, noting that any agent showing a home must seek permission, schedule an appointment and obtain a unique security code to access the house. 鈥淎 Realtor can screen visitors to your home, and follow-up with clients who have toured the home.鈥

Do you pay attention to details?

鈥淭he list for potential mistakes is huge,鈥 says Realtor Erick Monzo ofKeller Williams 鈥 The Monzo Groupin St. Clair Shores, Michigan. 鈥淯nless you know how to read closing documents, fill out purchase agreements, and calculate the true value of a property. Every state has different laws and regulations in regard to real estate transactions. I believe the scariest mistake is not crossing your T鈥檚 and dotting your I鈥檚 鈥 you leave yourself open to future litigation.鈥

Diament agrees, and says the biggest mistake For Sale By Owners make is underestimating the complexity involved during the entire process.

鈥淚鈥檝e heard lots of stories of deals falling apart after the buyer and seller have agreed on the terms, but then financing collapses,鈥 she says, noting that a Realtor鈥檚 job is to pay attention to the details at every step along the way.

鈥淭he general public isn鈥檛 aware of all that is involved to get a home ready to sell,鈥 Colman says. 鈥淭hey don鈥檛 see all that鈥檚 involved in shepherding a transaction to a successful conclusion, including the many deadlines, dozens of mandatory documents, hundreds of emails and phone calls. It鈥檚 a full-time job.鈥

How to Hire a Good Realtor

Dear Angie: How can I select a good Realtor? What questions should I ask to get one that is reliable and honest? 鈥 Frank K., Arlington, Texas

Can you spot a scam?

Or perhaps, are you cognizant enough in real estate to recognize if someone is taking advantage of you?

鈥淏uyers feel they may be able to leverage a better price and or incentives for the home because the seller often lacks the skills and knowledge to negotiate,鈥 Reed says. 鈥淢ost buyers employ an agent to represent them and would have the agent鈥檚 experience on their side.鈥

Monzo says For Sale By Owner properties also tend to attract the seasoned investor looking for a great deal.

鈥淭hat FSBO sign in your front yard screams 鈥業鈥檓 desperate and gullible,鈥欌 he says. 鈥淭he advantage of looking for FSBO鈥檚 is to take advantage of them.鈥

After spending several weeks searching for a new home in Las Vegas, TaChelle Lawson stumbled across a property listed For Sale By Owner on Craig鈥檚 List.

Working with real estate agent Dina Cochran 鈥 Realty One, Lawson says she got the house for a steal.

鈥淪imply put, the seller really had no idea about selling a home,鈥 she says. 鈥淚 was able to buy it for less because I don鈥檛 think the seller understood what the home was worth, and was also very anxious to sell. I personally would never list a home without a Realtor. There鈥檚 a lot I just don鈥檛 know and they do.鈥

Will you end up hiring a Realtor anyway?

According to NAR, For Sale By Owner properties accounted for 8 percent of home sales in 2014. Oftentimes, homeowners unsuccessful at selling their homes will seek out the professional services offered by a real estate agent.

鈥淚鈥檝e been approached by several individuals after they tried themselves for months to sell their home,鈥 says agentMichael Winslow – Blue Picket Realtyin Colorado Springs, Colorado. 鈥淭hey were tired of entertaining strangers knocking on their door and calling at all hours of the day and night, and weary of not being able to encourage those potential buyers to prove their financial ability. Not to mention trying to navigate the necessary disclosures, contracts and closings.鈥

Hiring a Realtor with a history of proven success can offer you peace of mind that any real estate transaction will be handled with the utmost professionalism.

鈥淪elling a home is a complex process with many pitfalls, which can mean either receiving less money or potential legal liability or both,鈥 Agliano says. 鈥淲orking with a good real estate agent helps you overcome these issues so you net more money and won鈥檛 worry about problems coming back to you after the sale.鈥