Sell Your Own House.
Advantages?

If you're wondering if there's an advantage to sell your own house, you may be surprised to learn that the disadvantages far outweigh the single advantage.

Your sole justification to sell your own house privately, and forgoing the relative ease, marketing support services, market knowledge, professional guidance, negotiation skills and security offered by a professional REALTOR®, is to ...

Save Commission

Here's the problem though.

That's also the sole motivation for a buyer to forgo those same REALTOR® services. They expect to pay a lower price because there's no commission involved.

Studies have indicated that FSBO real estate (for sale by owner) marketing, including internet marketers, reach fewer than 20% of potential buyers. And that 60% of homes for sale privately, are sold to friends or relatives. Further, if you wish to sell your own house, you should be prepared for a ...

Lower Sale Price

... than what you would likely get with the services of a professional REALTOR®.

Private sellers lack any credible proof of market value, and often ask for a price well over the realistic value of their property, just to 'test' the market. This uneducated attempt usually ends in failure.

As a homeowner, you could dupe yourself into thinking that no one is better equipped to show and sell your own house than the person who knows it best - you.

So, you make up a lawn sign (amateur) with your personal phone number (no privacy), stick an ad in the local newspaper FSBO real estate classified section (expensive and usually ineffective), and maybe on the bulletin board at the neighbourhood laundromat or grocery store (even less effective), and wait for the countless calls (naive) from eager prospects (rare) looking to buy a house.

Or you could pay a non-refundable flat fee (whether you sell or not) to a 'sell your own home' company who offer exposure on their possibly obscure website, a lawn sign, maybe a brochure guide, but with no essential services.

Or you could list your house with a discount brokerage who'll charge a flat fee up front to upload your property onto the local MLS® system. You may think you're smart, until you realize that most serious buyers are under contract to their own agents. And to sell your own house, you'll have to pay a buyer brokerage commission on top of your flat fee to the listing brokerage. And you'll probably have to deal directly with the buyer's agent without the guidance of your own agent.

But hey - you're saving a little bit of money to sell your own house- just not as much as you thought you would.

Here's another challenge

Since it's virtually impossible for you to be totally objective about your own home, who will advise you on how to effectively prepare your property for market? You'll need to hire a staging company - at some expense.

Let's say you're lucky enough to find a prospect interested in a viewing.

To sell your own house, you must be available all hours to facilitate a prospect's schedule. You might be asked for a weekday appointment. In this case, you'd have to make arrangements to leave work during your regular business hours, or have someone at home to secure the dog. Or you might have to postpone dinner to permit a buyer to walk through your home. It's inconvenient, but you wanted to sell your own house. Sometimes, it's difficult to obtain an appointment to view that fits everyone's schedule.

And sometimes the caller fails to appear at the agreed time.

Frustrating? Absolutely

If you're able to organize a mutually agreeable time and day, you'll obviously have to personally show your home.

Let's say the caller actually keeps the appointment and shows up at your door. You're touring them through the house, pointing out features, identifying rooms, maybe introducing members of your family who're watching their favourite TV show. You're thinking everything's going fine. However, you're not trained to ask the right questions, or to focus on benefits of features. Do you have the skills necessary to show it properly? Nope. Are you appearing anxious? Maybe.

Unfortunately, the prospect naturally distrusts anything you tell them about your home, or at least they suspect exaggeration or bias. If they detect anxiety, and they decide to make an offer, be prepared for a really low offer price. And since they can't get it organized that same day, they'll have a chance to 'cool off'. They may even change their minds, or they could be even more objective (even lower price).

Do they financially qualify to buy your home?

You have no idea of their wants and needs, their ability to qualify for a mortgage, or even their affordable price range. And did you get their contact info? Do they have a house to sell themselves? How do you handle that scenario?

And what about ...

Safety

How secure would you feel being inside your house, alone with a stranger? For all you know, they could be a dreamer, a thief casing the joint, a nosy Parker or an axe-murderer!

If they express an interest in making an offer, because there's no buffering 'middle-man' to negotiate fair terms, you must discuss all real estate contract terms with them directly.

No easy task!

This is often where everything falls apart. And the egos of both buyer and seller come into play, which is a ...

Formula for Disaster

If you've not obtained a fee appraisal from an accredited appraiser, or an objective letter of opinion of value from a REALTOR® based upon a detailed and current Comparative Market Analysis, you may be asking an unrealistic price.

In many cases of selling a house privately, a homeowner has tricked an innocent real estate agent into providing their opinion of value for free because the agent was hoping for a listing. But unfortunately for the homeowner, agents often suggest a list price rather than a probable sale price. And this could be unrealistically high just to get the listing contract.

You may be basing your purely subjective value on the asking prices of what may be comparable homes in the neighbourhood that you've spotted in the local newspaper ... and that haven't yet sold.

You could also be relying on erroneous information provided over the fence by a friendly neighbour who exaggerated about the price he got for his own place, or on a rumour about what a neighbour got for theirs.

Obviously, you want the highest price possible, and the ...

Buyer Wants the Lowest Price

Before the heavy duty negotiating even begins, you're already thousands of dollars apart in price by the entire real estate commission!!

At best, a reasonable buyer may split the difference with you, but don't count on it because the buyer is foregoing the experienced services, including comfort and security, of a REALTOR® as well. And I might add, these services usually cost the buyer nothing.

Without the guidance of a REALTOR®, a buyer will usually offer a really low price, which you'd find insulting or irritating.

And without the services of a REALTOR® ...

Who's Protecting and Advising You?

And who is going to draft the actual real estate contract?

When a REALTOR® is involved, the buyer's agent, who is typically equipped with the specialized software, usually prepares it.

But in a private sale, it's the lawyer for either the seller or the buyer who must draft the contract, unless, of course, you have current real estate contract software and experience. And do you think the lawyer will do this for free? I doubt it. So, with no assurance of a successful negotiation, someone is going to incur costs up front.

Also, a lawyer is not a professional negotiator, marketer or evaluator. They usually see the final contract - after all these activities have been successfully completed. But without a lawyer, or better yet, a REALTOR®, being involved in the process, you risk possible legal liability if you make an error. For example, is there anything you need to disclose to a buyer such as physical defects or non- by-law compliant features of your property?

Now, let's say you've agreed on terms, and you've accepted an offer conditional upon the buyer arranging a mortgage.

Do They Qualify For the Mortgage?

Did you ask them before signing the contract? Probably not since you didn't ask the personal questions regarding income, debts and down payment. So, while they're seeking their mortgage, your home is effectively off the market. If they fail to get approved, you've wasted valuable marketing time.

So, bottom line ...

You've possibly incurred considerable costs for advertising, lawn sign, staging services, appraisal fee, extra legal expenses for failed offers, maybe flat fees for a 'selling your own home' company, and maybe even a buyer agent commission.

Or you've innocently undersold your property due to market ignorance or from pressure, or you're just weary of the stress and frustration.

Are you further ahead than if you'd trusted a REALTOR® to take care of you?

I Doubt It

Any advantages for you to sell your own house?

Not really.

Because to sell your own house is rife with challenge, frustration and stress. Here's one more thing.

If your attempt to sell your own house is successful, you could end up netting nearly the same money (or less according to research) as you might have using the professional skilled services of a REALTOR®. And with a lot more stress.

Click to learn more about how a REALTOR® can help you sell your own house. If you want to sell your own house, and insist on trying it alone, click here and here for advice on how to prepare and what to do.

CONTACT ME for experienced real estate service.

If you think you may want to sell your own house, remember the old adage that you get what you pay for. And here's another: a home owner who acts for himself has a fol for a client. Is tall the risk and stress involved worth it, especially considering you'll likely sell for a lower price that what you'd probably get with a REALTOR®? I don't think so.

If you think hiring a professional is expensive, wait until you hire an amateur.

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