Why do people want to sell their own homes without relying on the help and support of professional real estate agents? The answer is quite simple: to save money.
A typical commission fee for a real estate agent’s services generally ranges from 4% to 6% of the total property sale amount. If you don’t want to pay this fee, selling on your own might seem like a great way to save money — but unfortunately, this isn’t usually the case. Selling your home without a real estate agent is possible, but it isn’t easy, and often, the risks outweigh the rewards.
It’s a real estate agent’s job to know all of the special tricks and skills needed to sell homes for the most money possible in the shortest amount of time. The untrained owner risks running into a host of unclear, seemingly minor bureaucratic tangles and marketing difficulties in the home-selling process. Fees and fines are obvious drains on profitability, but just as costly are delays, postponements, and missteps when it comes to courting buyers and negotiating with — in all likelihood — someone who is in fact a real estate agent. This puts the owner at a disadvantage, preventing him or her from making the property sale efficient, smooth, and most importantly, lucrative.
Let’s look at the most common things people tend to overlook when spurning professional real estate agents and their extensive experience.
Mistake #1 — Misunderstanding the Correct Market Value of their Property
You should always know the proper market value of your property as early as possible when you decide to sell. An overpriced listing will scare off potential buyers; underpricing will net you a much smaller profit than you could have had.
In order to get just the right listing price, the property needs to be evaluated carefully, from a neutral perspective. Influenced by an emotional attachment to their properties, many sellers tend to add value to some distinguishing aspects of the house — its character, its quirks — not realizing that a potential buyer might consider those same things a hindrance.
Anything from room decorations, tapestries, or paint colors to more substantial structural features — basically, anything that requires renovations or costs money to remove — might not appeal to the client. That’s why a third-party evaluation is an important thing to consider before listing the property on the market. Take a step back, try to detach yourself from your home and look at it as just a house. Ignore all of your experiences there, and try to see it as a buyer would.
There are lots of variables that can affect a home’s pricing. These include size, location, number and quality of services in the area, availability of reliable public transportation services, and neighborhood reputation, among many others. Pricing will also be subject to the regular housing market pricing levels of the area, of course — no house is an island (or at least, not for the average buyer or seller!).
Homeowners lacking real estate agent-specific training and experience are faced with the almost impossible task of evaluating all of the aspects that affect the market price and the variables within that — many of which change with the seasons, sometimes literally, as one fad or trend waxes and another wanes.
Real estate agents have extensive, current knowledge of the trends in the current marketplace and the contacts and resources to make sure that knowledge is up-to-date. They are also experts in pricing, and all the little details that affect it. They have the professional skills to evaluate the selling property neutrally, as they do not let their emotions affect the quality of their work.
Mistake #2 — Not Making your Home as Attractive as it Can Be Means Failing to Market it Properly
One of the most common mistakes in selling For Sale By Owner (FSBO) comes up in property marketing. When the private seller starts to advertise his or her property, it is important to provide pictures that make the house seem as attractive as possible, paired with a detailed and professional description. Failing to give all necessary information — or, worse, giving outright incorrect information — to a potential buyer is a quick and surefire way to torpedo a possible sale.
Unfortunately, it is exceptionally easy to give too little or too much information on the details of your house. Making professional and tempting property ads is a challenging job, and like most other aspects of home sales, it requires either experience or extensive research and preparation to get it just right.
Part of that preparation lies in understanding that, with a little work and investment, many aspects of the house — even things you might have considered its weak points — can be positively presented. Carefully and thoroughly cleaning and arranging the house is essential before any showing. Investing in a few plants and storing away personal items and unnecessary pieces of furniture can make the house look cozy without being too personalized to appeal to someone with different tastes than you.
Failing to do so, on the other hand, can imply sloppy maintenance and a general lack of care, and can reduce the earnest interest of potential buyers. If your property has them, taking good care of gardens and walkways can do wonders for the first impression you give to potential buyers; even the front door can make a difference, so clean up the whole face of the house in particular!
It’s also imperative to fix all the minor potential flaws of the house. A little renovation can go a long way and really boost the property value. When it comes to the furniture and details, consider getting help! If you aren’t absolutely confident in your own ability to walk the fine line between a neutral and inviting home and a bland, sterile one, using the services of a professional staging expert can do wonders.
There are trained service professionals whose only job is to make your house look just right for a showing. It is important to remember that potential buyers will have every little detail under a magnifying glass, since they are preparing to invest a lot of money in whatever property they decide to buy.
In contrast to owners, real estate agents are professionally trained when it comes to property presentations. They will make sure the house looks as presentable as it can ever be. They will use every trick in the book to make the presentation as pleasant and convincing as possible.
They might change the lighting of the rooms, rearrange some pieces of furniture, or offer refreshments and snacks to visiting buyers. They will do whatever is needed to make the premises look as cozy and comfortable as it can be in order to persuade the potential buyer that this is the perfect place for them. Anything beyond their expertise can be handled by one of the specialized professionals mentioned earlier — professionals with whom most agents maintain contacts, often allowing you to get a better deal on a reputable expert.
Real estate agents also have full training on how to “seal the deal,” leveraging all that cleaning and staging and detail work to create the strongest possible negotiating stance from which to bargain. After all, no matter how much you spruce your home, there’s a limit to how much that alone can help you if you aren’t a skillful negotiator when the time comes. Professional agents can easily weed out the most promising leads among a crowd of potential buyers or a long list of visitors from a series of showings, and know how to coax them to the table and then to the contract.
Mistake #3 — Marketing in the Wrong Place: Failing to Use the Right Channels
A Multiple Listing Service (MLS) is, simply put, the way to go. Many property owners who want to sell their home — be it a house, an apartment, a condo, anything — fail to market their property as well as they could because they don’t want to spend hundreds of “extra” dollars to list their property on the MLS.
This is one of the greatest mistakes people can make when selling FSBO. An MLS is basically a huge, comprehensive database of homes for sale, connections to real estate agents and other buyers and sellers, and market information, which is routinely used by real estate brokers.
It’s a very good way to attract the interest of many potential buyers, as well as their buying agents. Even if you decide to go FSBO, working with buying agents is the way to go in order to obtain a fast sale.
Real estate agents have access to MLS. That is a big part of how they are able to find potential buyers for any and all of their clients. They usually also have tons of personal and professional contacts to refer back to when needed, though, which is more difficult to replicate than MLS access.
Unlike owners, an agent trying to sell a home is working on commission. Striving to obtain a hot deal at the highest possible price is in the agent’s best interest — even more than it would be for the owner. Someone looking to sell their house FSBO certainly wants the best deal, but an agent needs it. They will throw all their skills and experience into getting that perfect price because, at the end of the day, agents make their living this way, and being able to uphold a good reputation for high sales prices is crucial to a good real estate business.
Mistake #4 — Not Understanding the Necessary Paperwork
Not knowing what papers you need to sell your property can cost owners opting for For Sale By Owner (FSBO) dearly. There are lots of documents and many disclosures that need to be signed and submitted for filing throughout the home sales process.
A seller needs to consider scheduling appraisers, arranging necessary inspections, and meeting a whole host of other conditions. Failing to meet requirements in terms of accuracy and timelines might cost the owner and buyer extra money and time — quite possibly in the courtroom.
That is why all official documents and agreements involved in the sales contract must have been cleared and executed within a set, legally binding time frame. Real estate agents have thorough training when it comes to the timely handling of all the necessary paperwork related to a property sale. When it comes to contract terms and necessary documents, real estate agents hardly ever make mistakes; it’s part of their job to do the paperwork right. They have their reputation to uphold because without it they don’t have a job, so they are going to do their part to finish everything in an accurate and timely manner.
Mistake #5 — Not Knowing the Terminology of Property Rights
It is easy enough to welcome potential buyers inside your house and give them a tour, but when they start to ask about escrow, oil-, gas-, and water-rights, maybe even about the possibility of leasing the property, do you know what to say to them? Most people don’t, another mistake many people make when selling FSBO. This is also a reason people use real estate agents, as they are trained to easily respond to questions the average person would never have any reason to even think about.
Unlike private owners, real estate agents are trained and experienced at considering all of the details buyers may want to know more about.
Agents will often have a checklist of any and all matters that could affect the property, and they will have answers prepared for all of them, just in case, as a professional should. Again, it’s their reputation and expertise on the line, so mistakes and misinformation are something they are motivated to avoid at any cost.
Mistake #6 — Slip-ups in the House Presentation
Selling a house is an art. It’s all too easy to make a mistake describing something with sentimental value to someone who doesn’t see it the same way. It’s easy to use the wrong kind of adjectives, or to exaggerate and say the wrong things at the wrong time. What seems like wholehearted and innocent praise to you might actually be annoying to a stranger. It is often quite hard for an owner to present his or her property neutrally, simply because of the emotional attachments linked to it. That can be a hindrance to the sales process and is another common mistake made by people who sell FSBO.
On the other hand, real estate agents have the advantage of professionalism and detachment when it comes to property presentations. They know exactly what words to use to make the sale happen. They can show less desirable traits of the property in a better light. They don’t have emotional biases that drive owners to focus on the wrong elements of a home. To repeat, selling is an art, and no one makes for a better artist than an agent when comes to selling property.
Mistake #7 — Details
There are plenty of blunders to be made when selling your own property without professional support. You need to be available for all contacts, set up all of the home showings, and answer a host of questions. There is much to do. The house itself needs to be clean and free of unnecessary furniture, pets, and personal objects. It might even be a good idea, if you have any, to find somewhere else for the kids to be. Real estate agents have experience dealing with all of that. They present houses on a daily basis, all year long. Where you, as a private owner/seller, might stumble, they will succeed. Again, they have extensive training and long histories of experience in the field.
As a rule, they are familiar with all of the mistakes and problems that might occur to complicate the process. They know how to dress up the risks, take advantage of the loopholes, and avoid the downsides of the deal, since it’s in their best interest to do so. Real housing market knowledge and professionalism is something you can only achieve through training and experience.
That being said, selling For Sale by Owner really is a perfectly good option for those with real estate experience and good negotiating skills. For anyone else, though, selling FSBO is not recommended unless accompanied by thorough research on the subject and a great deal of free time and patience. Try to avoid the most common mistakes people make when selling FSBO and refer back to a professional real estate agent if you feel overwhelmed; it is usually possible to consult with one for advice, even if you refuse to retain one to handle the proceedings themselves.
Selling your house is important. Make sure your home gets the attention it deserves as your most important financial investment. The result will be well worth it.