It can be tempting to try to sell your home on your own hoping that selling it yourself will save you money.
Here are 5 things you need to consider if you try to sell your home on your own:
1. You are limiting your exposure to potential buyers. Gone are the days of banging a for sale sign into the ground, hosting an open house and placing an ad in the newspaper … at least if you want top dollar. As a matter of fact, these three marketing tools are becoming less and less effective. As a 25 year veteran of the real estate business, I’ve never sold a house that I’ve hosted an open house at to a buyer who happened to stop by. Sure, I know that there are stories of where a house sold to somebody who attended an open house but those stories are rare.
According to the National Association of REALTORS’® 2020 Profile of Buyers and Sellers, 97% of home buyers used the internet in their home search process. To achieve top dollar for your home today, it’s essential that you maximize the exposure of your property online.
Greater market exposure results in a higher probability of getting the right price sooner. Remember, the longer that a house sits on the market the lower the selling price is going to be.
2. You don’t have to pay upfront. The vast majority of homes are sold by REALTORS®. Do-It-Yourself (DIY) companies are not REALTORS®.
With DIY companies you pay upfront for a for sale sign, photos, website advertising and more. If you don’t sell your house yourself, you’re out of pocket the money you had to pay upfront. I’m often asked by prospective sellers how much I would charge to list their house. My answer is that “I don’t charge you anything to list your house. My success fee is only payable upon the closing of your home.”
That’s right, I pay for a professional staging consultation, professional photos, a professional video, professionally mastered online listings, print and digital marketing even if your house doesn’t sell (but it will when you let me tell the story of your home).
3. The buying process begins AFTER the buyer leaves your home. My experience as a REALTOR® has taught me that buyers rarely walk into a home, fall in love with it and want to buy it right then and there. Buying a home and spending hundreds of thousands of dollars is a scary thought for most home buyers. They need guidance and reassurance. If a home owner calls a prospective buyer after a showing the home owner looks overly anxious to sell. A REALTOR® is able to answer a buyer’s questions and counsel them on the home buying process. Most buyers find it extremely awkward to negotiate on their own or even talk directly to the sellers.
4. You negotiate on your own. This one scares me the most. I’ve received calls from home owners seeking advice after they have accepted an offer on their home that they negotiated on their own. It’s never good news when a home owner calls me AFTER the fact.
For example, I remember a telephone call that I received from a lady who was selling her house without representation from a REALTOR®. She had accepted an offer from a prospective buyer that was conditional upon the buyer selling their current home. The offer didn’t contain an escape clause (a clause that a REALTOR® would have advised be included in the agreement).
An escape clause is typically included in an agreement of purchase and sale when a buyer has to sell their current home before being able to buy another home. The problem is that one never knows if the buyer’s home is going to sell therefore an escape clause allows the seller to continue to offer their house for sale. In the event that the seller receives another offer, the escape clause allows the seller to serve notice on the original buyer notifying them that they now have a contracted number of hours (generally 48 to 72 hours in my trading area) to remove all conditions from their agreement to purchase, failing which their offer is null and void.
The offer received from the original buyer didn’t contain an escape clause therefore the seller wasn’t at liberty to entertain other offers until the end of the conditional period allowed for the seller to sell their house. Upon further discussion with the frustrated home owner I was made aware that the original buyer had an entire year to sell her house. One year later the buyer’s house remained unsold meaning that the seller’s house was still not sold. Needless to say the home owner listed her house with our company immediately thereafter.
5. Getting a real estate sales contract isn’t the end of the story; it’s just the beginning. There’a a lot more work to do to bring a buyer and seller to a successful closing. Nothing should be left to chance. Lenders advancing mortgage funds will often require an appraisal of the home being purchased to make sure that the amount of money they are loaning is not more than the value of the house. What are your options if the bank’s appraised value is less than the purchase price of your home? An experienced REALTOR® will be able to offer sound professional advice if this happens to you and it often does in a seller’s market.
Most buyers will have a home inspection completed of your home. How skilled are you at handling both minor and major deficiencies revealed during a home inspection? How experienced are you at handling the buyer’s objections to proceeding with the transaction unless you reduce the purchase price by $10,000 since the home inspector reported that the roof shingles are at the end of their life expectancy in another two years? It was obvious when the buyer viewed your home that the roof shingles were older and would have to be replaced soon. Didn’t the buyer know that when the buyer made you the offer that you agreed to? What should you do now? Your REALTOR® will have encountered this situation numerous times before and will know how to handle this objection favourably for you.
What are your options if the buyer’s home inspection reveals that there is vermiculite insulation in your attic? This can be a very costly fix to remedy if the vermiculite contains asbestos. Do you know how to determine whether the insulation has asbestos in it? If so, what should you do to keep your real estate transaction on track? A REALTOR® will know.
The buyer’s lawyer searched title to your house and it’s been discovered that the wooden deck in your back yard doesn’t have a final occupancy permit. Or worse yet, the buyer’s lawyer turns up the fact that you built that wooden deck without a building permit! It’s one day before closing, you’re all packed and ready to move but your entire real estate transaction is at risk of falling apart and not closing. Now what? Ask your REALTOR® because he or she will know what to do.
As a matter of fact, a For Sale By Owner company’s website’s disclaimer states “We are not real estate brokers nor agents. We represent neither the buyer nor the seller. We do not trade in real estate. We neither warranty nor make any representations as to the outcome of a property sale.” WHAT!?!?!? We represent neither the buyer nor the seller??? No warranty or representations as to the outcome of the sale???
Selling a home for most people is the single largest financial transactions of their lives and nothing should be left to chance. REALTORS® represent their clients to make sure that their best interests are contracted for and that the outcome of a property sale is a successful one.
These five things to consider if you’re thinking of selling your home on your own are just the tip of the iceberg.
There are plenty of other considerations one should think about if considering going the DIY route. Anyone who has ever tried it will tell you, selling your own home is not as easy as it looks.