Know the Disadvantages Before Selling Your Home On Your Own (FSBO)
By Sadiya Anjum
The primary reason for homes for sale by owner is the intention of saving money which would have otherwise been the real estate agent’s commission. Depending on the property and the agent’s services, agent’s commission may be as high as 6% of the sales price. To protect such a substantial sum, you may consider selling your home on your own. But before you dabble with real estate, consider the downside of not having an agent by your side. A realistic picture of the downfalls of FSBO should help prepare you better. Some of the problems associated with selling on your own include:
Lack of expertise
It is simply a matter of not having the skill, knowledge or experience. You may think it does not take a genius to sell a home but you still have to admit that in any field of work, experience and skills cannot be duplicated by others. Apart from this, you may be at a disadvantage if you do not know the various procedures and strategies involved that agents employ. Reading is quite different from actually being able to effectively implement ideas and procedures.
Unaware of the market
The real estate market is beyond huge yet agents are well connected. When they put up a property for sale, they may use their connections to contact other agents with potential clients. ‘Connections’, no matter how vehemently one denies it, is a powerful term. In addition, you do not know the market conditions, the latest trends and other such factors.
Difficulty with legal and financial issues
It is essential to hire an attorney even if you do not consider hiring an agent. The extent of paperwork involved is huge, and not to forget the various clauses and fine print that you may miss. A buyer may bring in his own attorney or a purchase contract with clauses you do not fully understand. Other financial issues regarding mortgages may also crop up. Even if you do manage to understand the various issues, you may be unaware of other options available and accept what is presented to you as your only best option.
Not pricing your home appropriately
This is one of the biggest mistakes that a seller can make. Too low a price and buyers may be suspicious of any hidden defects with the property; and too high a price and buyers may just pass by without even considering it. Pricing your property means doing homework which would get an A+ grade. You have to find the right comparables in your area and then determine the price of the home. Even with the right comparables, you may not know how to price the extra fittings you intend to sell or neglect to include other factors which would add to the sales price.
Advertising is again one of the main factors that will help you sell your home. The agent may have actually been able to do a fantastic job of this. But it is up to you to learn about marketing and advertising. You will have to pick out the various media you are going to choose, write an effective ad copy and reach out to the right target audience. Without effective and adequate advertising, your home may not sell as you had hoped for.
Weak negotiation or “people” skills
If you are selling on your own, you can easily expect buyers who think they are smarter than you or feel they can take advantage of you. It takes some “people skills” to observe those who walk into your home or call with inquiries. You will have to be wary of smooth talkers who promise to buy your home but may not actually be able to afford it. The negotiation process is going to be a tough one and if you are not smart or careful you may end up ruining a good deal or land up with a bad one.
Selling your home is going to be an emotional experience but without detachment you are not going to be able to do “business”. You may get upset when buyers find faults or pass nasty comments about your home during negotiation. What you may have thought was the best aspect of your home may come under criticism. You should be able to look at the bigger picture objectively so you do not throw out a good deal.
Time commitment and effort involved
Roll up your sleeves and prepare yourself to spend a large amount of time selling your home. Reading up material, doing research, writing ad copy, answering calls, showing your home etc. are all going to require time. If you have a full time job then you are going to have a tough time during the selling of your home. It also demands effort and a genuine interest to do a decent job of selling your home on your own.
Although it seems really tough, it is not impossible to sell your home on your own. A wise place to start would be to have a rational view of your situation. Understand these pitfalls and try to find a solution for them. Put some time and effort into each of the tasks involved; and when in doubt always seek the help of others to avoid falling into the trap of these drawbacks.
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