Top 5 Myths About By-Owner Home Sales
“If you can use an online service to file your taxes, you can use an online service to sell your home.”
Those reassuring words are from Derek Morgan, manager of broker relations at ForSaleByOwner.com, one of several online services that help homeowners bypass real estate agents as well as their 6 percent commissions.
“Our goal is to let buyers and sellers connect on their own,” Morgan explains. “You know, there was a time when real estate agents didn’t exist and people still managed to sell their homes. Online technology is changing the way we do things, so why not use those tools?” he asks.
“As powerful as real estate agents say they are, as a by-owner seller you have the same power,” Morgan notes.
All you need to do is overcome some common myths about selling a home yourself. “For by-owner sellers willing to invest the effort — and who treat selling their home as a professional business transaction — it really can become simple and worth the time.”
Here are the top five myths about by-owner home sales:
MYTH #1: By-owner sellers can’t price homes as well as agents can. Pricing is so difficult, only a real estate agent can do it.
REALITY CHECK: Agents have no gifted insight into how to price homes. They simply go online and check the selling history of similar homes in your neighborhood. That’s exactly what you’ll do as a by-owner seller. Some sites offer a step-by-step pricing guide to help you decide on a price.
MYTH #2: I could never market my home. Marketing requires specialized skills and access to a closed network of active buyers.
REALITY CHECK: When you sell FSBO (that’s industry-speak for “for sale by owner”), online resources give you more power than you realize. Turns out buyers, like sellers, are taking home ownership into their own hands. More than 50 percent of all buyers started the house hunt online, where 43 percent said they first found the home they bought, according to the National Association of Realtors (NAR) 2013 Profile of Home Buyers and Sellers. Beyond that, many by-owner sites offer the same exposure, if not more, than agents do.
MYTH #3: All of my friends say that real estate agents provide useful services and a level of exposure that FSBO sellers can’t achieve on their own. Besides, as a by-owner seller, I won’t be able to reach buyers through multiple listing services.
REALITY CHECK: Absolutely untrue. Nine out of 10 buyers use the Internet during their home search, according to the 2013 NAR report. Through online services, by-owner sellers benefit from the same exposure agents provide on the Web. For example, for a flat, one-time fee, discount brokers and websites will put a by-owner seller’s home on the local MLS. As an added bonus, the flat fee you pay for MLS access is thousands of dollars less than an agent’s commission.
MYTH #4: It will be easier for me to schedule an open house or showing if I have a real estate agent.
REALITY CHECK: In fact, it’s harder. When you add an agent to the mix, any showings need to accommodate the schedules of three people: the seller, the buyer and the agent. And even if a prospective buyer has an agent, most by-owner sellers welcome the chance to speak with buyers directly to ensure that accurate information is being conveyed.
MYTH #5: I’ll need to use an agent or broker to coordinate and prepare a transaction for closing. All those forms are too complicated.
REALITY CHECK: Most agents actually outsource this work to lawyers. Any credible by-owner service will insist that you engage an attorney for this important part of the sale. Some by-owner sites offer a network of real estate attorneys along with state-specific contracts and disclosures you’ll need to seal the deal.
Tackle these tasks and pay yourself the 3-6 percent you’d typically pay in agent commission fees. Just think of what you could do with that money instead.
Tell us in the comments: How would you spend the money you save selling your home by owner?