21 février 2017,
You have decided to put up your property for sale and wonder what the best option is. Do you go the FSBO route or hire a real estate agent?
FSBO means the owner is selling the property directly without the help of a real estate agent. Before you make up your mind, it is important that you understand exactly what is involved in For Sale by Owner process.
Why Sell your Property Directly without A Real Estate Agent?
It is definitely tempting to try to sell your property without a real estate agent. Imagine the money you save from not paying a commission.
On the surface, it sounds like a good idea to do the selling yourself. What’s so difficult about putting a For Sale sign in your yard and entertaining inquiries?
Actually, it takes a lot more work than that. You will need to be ready to do the following:
- Study the local market to determine your selling price
- Renovate the house to boost its appeal
- Prepare flyers and do your own marketing
- Follow up on leads
- Conduct open homes and showings
- Negotiate with buyers for the highest possible price
- Arrange for legal documents pertaining to the sale
Are you still interested in doing your own selling? There are potential pitfalls in any real estate project. Selling a house is more complicated than it appears. You can certainly try to do all the above-mentioned steps. However, if you are not experienced in real estate selling, many things can go wrong. You may also be unaware of the additional expenses pertaining to the sale.
Before you decide to take the leap into the “For sale by Owner” route, you will need to ask yourself these questions.
Do you have relevant data on properties sold in your area lately?
Experienced real estate agents know what sell. They also know the prices of similar properties in your area. Without knowing what appeal to buyers or putting too high a price on your house, your property could languish in the market and not sell for a long time.
A good real estate agent can also help fetch a better price for your house faster by recommending the right home improvements and repairs needed that will have a positive effect on your sale price.
Do you know how to market your property to a large audience?
To ensure a successful sale, you need to advertise the property to a wide audience with the use of effective channels on the internet. Most home buyers look for houses to buy online. You will need to have high visibility online and be able to connect with the right buyers.
Since you are trying to cut down on expenses, you may also feel tempted to save on marketing costs. This will be a mistake because the right advertising strategies attract more potential buyers and dramatically boost the value of your property.
Do you know how to conduct open houses and showings?
A very important aspect of the home selling process requires conducting open houses so that potential buyers can view the property. Aside from setting aside the time to do this, you must also know how. The house must be spotless and clean. It should also showcase the attractive features of the property. Home staging is a trick used by experienced agents to make the house appealing to as large an audience as possible.
If you have a day job, it may be difficult to arrange showings for potential buyers during the week.
Do you feel confident about negotiating offers and buyer demands?
Negotiation is another vital aspect of the selling process. It is very possible that you will get offers lower than your selling price. It is also possible that some buyers will demand for concessions after a home inspection report. You need to be open-minded and shrewd enough to see what offers are realistic. Will you get a better offer if you pass up this one in your hand?
A real estate agent’s job is to negotiate offers and try to get the best price possible for your property.
Do you know the legalities involved in the sale?
If you find a buyer who is willing to purchase your house for the price you want, there is still the paperwork to see to. This is tricky and better left in the hands of a qualified real estate lawyer.
GET $35,000 MORE FROM SELLING YOUR HOUSE WITH A REAL ESTATE AGENT
The process of selling a real estate property can be messy and fraught with unexpected roadblocks. Without a real estate agent by your side, you can be headed for disaster.
A good real estate agent can help sell your house in 5 ways:
- Ensure your property is highly visible on the internet to home buyers;
- Suggest ways to increase the value of your property;
- Arrange for showings and open houses for potential buyers;
- Negotiate buyers’ offers to get the best price;
- Guide you through the legal requirements and paperwork.
FSBO properties can take more time to sell and for much less because:
- Owners will place the property in front of buyers through newspaper ads, or Craigslist, and those who chance upon it while driving by. That gives just a limited pool of potential buyers who will definitely try to take advantage with low-ball offers.
- Owners don’t really understand what appeals to most homebuyers and fail to make their property appealing to a larger market
- Owners don’t know how to follow-up on leads or use the right real estate marketing strategies
- Owners are emotional about the sale and have little experience in negotiating with potential buyers
There is no law that requires hiring a real estate agent for selling a house. FSBO can work well for some people, especially those with selling experience and good negotiating skills.
So is it really possible to get an extra $35,000 when selling with an agent instead of FSBO?
Well, this depends on a lot of factors such as market conditions, agent’s skills and experience, marketing strategies and budget.
It is important to understand that it doesn’t automatically mean you can get $35,000 more for your property just by hiring an agent. Every home sale is unique but it is the agent’s job to try to get the best deal for the home seller.
Let me tell you about a couple from Montreal who got their hands on an extra $35,000 by selling with an agent. They had been trying unsuccessfully for 6 months to sell their property on their own. Based on market value and pricing of similar homes in their area, they set the price at $300,000.
They took pictures which they believed were awesome and listed the property in more than 10 websites for visibility, including Kijiji.
At the end of 6 months, they had received several inquiries and one solid offer on the table for $275,000. Feeling desperate, they were just about ready to accept the low-ball offer but decided to try hiring a real estate agent as a last ditch effort. A local agent with a great reputation felt confident he could sell the house quickly for more than $300,000.
They agreed on a results-based contract which provides that if the agent sells the house for more than $350,000, the agent would get 6% commission. If the sale price is between $325,000 to less than $350,000, the commission would be 5% and under $325,000, the agent’s would be 4%.
It took the agent 4 weeks to sell the house to a buyer from Toronto who was moving to Montreal. The final sale price was $355,000.
Do the math:
||Agent’s commission (at 6%)
||Net Amount for Seller
Are you wondering how this happened? The real estate agent they hired sells more than 20 homes each year. With a proven marketing strategy and a wide network, the agent knows the market and maximizes on his marketing budget to reach the right kind of buyers to sell quickly.
This couple walked away with almost $35,000 more than what they initially wanted and $50,000 more than the highest offer they received when they didn’t have an agent assisting them.
This real estate success story can also happen to you.
So how can a real estate agent get a higher price for your property?
An experienced real estate agent can fetch a higher price for your property by getting more buyers through the door, and ensure that you have a well-presented home that looks appealing to home buyers.
If you have an aggressive and well-connected real estate agent, you get the advantage of thousands more of potential buyers from a multiple listing service database. In the real estate market, exposure is critical.
Between pricing errors, lack of selling skills, and inexperience with real estate selling, you could cost yourself a lot more trying to sell your house yourself than the agent’s commission.
Best of all, the listing contract provides that the commission is based on the sale price. You can also negotiate the listing period, meaning how long you are willing to wait for the agent to sell your property before the listing expires.
Before deciding to sell your house on your own, you can compare 3 real estate agents now to see how you can walk away with more money in your pocket.
Take advantage of this free and no-obligation service to sell your property quickly minus the stress and guesswork.