We have all noticed or come across the houses around town that is for sale by owner. This means that this person is selling the home without a listing agent from a property management. One thing to understand, either way you sell your home, is the fair housing act. This act states that you cannot refuse to sell or rent a home to a person based upon race, religion, family status or sex. What this means in the selling of the home is that you cannot say that this is a good home because the home is near a certain school. The basic parts of selling any home or property are broken down into 5 simple parts.
One, pricing your home accurately, this can depend on where you live and what other people are pricing their homes at in your neighborhood. Two, make sure the buyer is qualified when buying a home most everyone needs to finance it, in order to do this they need to have good financial status. Don’t be afraid to ask the buyer if they are qualified and ask to run a background check first. Three, advertising properly, 80% of home buyers search the internet for homes. Post on Craigslist, Zillow, Trulia, Realtor.com, Remax.com and many others, also post signs at the entrance of your subdivision. Four, being aware and the knowing the real estate regulations and contracts for selling a home. This is important if you do not write the contract correctly it can cause the contract to fail or can cause legal liability. Five, coordinating the closing of the home is important and you need to follow up on the paperwork to make sure the sale goes through. You also need all inspections, insurance, escrow, and loan approvals all to go through before the sale is closed.
The number one benefit that people see by selling a home without a listing agent is the savings. They are not paying commission to the listing agent, you save 6% on average of the agreed sale price of the home. 6% doesn’t seem a lot, though of $400,000 this amounts to $24,000, that is ultimately money you will never see that you may have saved on. You can also make the most of the low-equity situations and make a profit. For example, say you bought the home for $500,000, and $480,000 is left on the mortgage. After paying what you owe on the home you have $20,000 left over but you owe the real estate agent now $30,000. Meaning you lost money, instead of earning $20,000 and make a good profit for yourself. You have the benefit of knowing who you are selling to when you hold open houses. You have control over when you have open houses and what you want to pass out or do during the open house. Such as having snacks, or having an open hour on certain days because of a busy work schedule. You also know the house and its history better than the realtor does so it is easier to make a sale by pointing out the perks and benefits of the home. Without having a realtor or middleman it is easier to make negotiations because you know what can and can’t be done within reason. It can be easier to sell because you can be firm on your price and not negotiate because you need that money and your realtor might not have that same drive for selling the home.
The downside, some statistics have shown people who sell for sale by owner make 15% less than those who sell by a realtor. You have less visibility to your home, meaning that the money you put into listing services might be outshined by other realty companies. Many realty companies have outlets where people search for homes come and ask questions about multiple properties including the one you might be selling. Realty companies have more experiences of where to post in order to get more views from interested buyers and more experience on where to put up signs so that people can view them.
You also need to know what you are getting into with legal forms, disclosures, etc. If you are unfamiliar with this process, which most people are, you risk financial and legal liability. This is great because you don't have to spend a large amount of time studying legality issues. Writing up contracts, taking the time to find inspectors and talking with insurance companies takes up even more time and experience you might not have. Some people seek out for sale by owner homes because the owners don't have experience and will not get proper financing when buying your home. This too goes for inspectors and contractors who might overcharge the owner due to a lack of knowledge. Selling a home can be time-consuming with all the research and open houses. The process can be stressful without a realtor who has the knowledge and the proper paperwork.
Finally, the decision is up to you. There are many benefits and drawback to selling a home, as well as knowing all the encompasses selling a home. Look at what is going to work best for you, if you have a lot of time and want to make a profit it might be better to sell your home on your own. If you don't have much time and just want your home to sell as fast as possible, it might be better to look at hiring a realtor.