Do and Don’ts of Selling By Owner
By ForSaleByOwner Staff
What do real estate agents know about selling your house that you don’t?
Nobody knows better than you how to make the most of the features and benefits of your house. After all…you bought it!
There is no magic to selling your house. You have access to all the tools that real estate agents use. Buyers will find your house when you make the most of those tools. Here are common questions, assumptions and misconceptions about selling by owner.
Do make the most of the internet. The National Association of Realtors reports that 93% of buyers start househunting online. Realtor.com is the most popular national listing site. Local agents use the multiple listing service to find houses that fit the needs of buyers they are working with. Popular online classified sites like Craigslist are updated minute by minute with new listings. Getting on all these sites will get your house ‘found’ by buyers.
Don’t assume that agents have a ‘secret list’ of buyers. If they have bona fide buyers who are ready, willing and able to buy a house, it’s no secret. It’s the agent’s responsibility to work her network to find the best match for her buyers’ needs. If she doesn’t tell everyone what her buyer is looking for, she is not doing her job. Hence: a quiet, secret-keeping agent is an unemployed agent.
Do offer a commission to buyers’ agents. Many buyers wisely have contracted wirth agents to represent their interests. (Without that contract, agents represent the seller’s interests.. and are under no obligation to negotiate for the best deal for their buyers.) It’s only fair for buyers’ agents to earn their side – 3% — of the traditional 6% commission. The buyer’s agent will coach them through the transactions. First-timers – who accounted for 47% of sales in 2010 – need lots of hand-holding. Let their agent earn her commission and make your life easier in the process.
Don’t assume that you can ‘add back’ part of the 6% commission as an extra cushion the ‘by owner’ asking price. Buyers (and their agents) will see right through that.
Do calculate the cost of time-on-market. Independent studies verify that you’ll capture more money by selling yourself, but it will likely take a little longer. Add up the monthly cost of continuing to own your house. That will include the mortgage, property taxes, utilities, fees and seasonal maintenance costs. That is how much equity you lose each month by sticking with a too-high price. Chances are it won’t take long to run down your equity. Price your house to sell swiftly and you won’t erode your equity.
Don’t be surprised when agents claim to have the perfect buyers …if you will just list with them. Here are two responses: ask if the agent has signed a contract to be the buyer’s agent. If so, then the agent is entitled to the buy-side of the commission regardless, and should be showing you the house as part of her responsibility to that buyer. If not, you can request a “single party listing,” which means that the agent gets a commission only for selling your house to that buyer. The agent will specify the 6% commission, trying to nab both the buyer’s and seller’s side. At that point, you are in a perfect position to negotiate the total commission to a more reasonable 3% or 4%.
Don’t be surprised when agents start calling as soon as your house is on the market by owner. They will assume that you are already exhausted by the effort of marketing the house. Of course, most buyers are exhausted by the process of decluttering, staging and preparing the house for sale – chores that agents do not tackle. Turn the buyers’ inquiries to your advantage by asking them to tour your house on behalf of buyers they represent. If they decline, then you have confirmed that they won’t or can’t do any more to market the house than you are already doing.
Do expect neighbors, friends and co-workers to help you spread the word about your house. Work your off-line social networks, like neighborhood associations, clubs, and workplace bulletin boards, to get the word out.
Do expect to pay up to $1,000 for a real estate attorney. Agents are not attorneys. They can handle some paperwork, but your state laws might require you to hire an attorney anyway. Even if your state does not dictate that an attorney handle your closing, hire one anyway. That will ensure that your closing goes smoothly and that all paperwork is complete.