This year I helped a former For Sale By Owner couple buy a house in Louisville. Last year, I helped my buyer clients buy their house in Erie. When they called to hire me, they said they appreciated my professionalism and recognized they needed an expert to assist them in a competitive seller's market. I was happy and grateful to help, and also wondered what we could've done together if I had been able to market their previous home.
Sometimes in a hot market, sellers figure they don't need a Listing Agent. Especially with the internet offering owners a way to list their property online themselves, sellers don't always recognize the value that a REALTOR brings to a transaction. I admit, I used to wonder about that myself. When I moved from Illinois a couple of decades ago, we sold our house ourselves and I'm embarrassed to say that we conducted it poorly and left money on the table. Now I know better.
What are some pitfalls of selling by owner?
- PRICING. First and foremost, it's pricing the home correctly. Owners are often looking at public real estate sites that are estimating their home value using Automated Valuation Models (AVMs). These AVMs can't take into account all of the features and finishes inside your home, or what the hyper-local market is dictating. Sometimes they are relying on erroneous data uploaded by homeowners using the systems, throwing off the algorithm for an entire neighborhood. In addition, sellers will often pick a price based on what they've spent on upgrading the home. While this is understandable, it's easy to overestimate the return those investments will make. I spend several hours using multiple tools and resources to accurately price a home, because overpricing can cost a seller time and money.
- NEGOTIATION. Another reason FSBOs don't typically get the sellers the results they want is the lack if negotiation experience. Understanding the dynamics of a negotiation with different types of communication styles takes practice. Knowing how far you can push an issue under what circumstances is the difference between getting to the closing table and having to start over again. Having been through the home selling process hundreds of times, I have a good feeling for what situations are common and what tactics will work.
- PROPERTY ACCESS. Whether the sellers are working from home or away at the office, buyers may have decreased access to the property when they need it. If the seller is home, buyers can sometimes feel pressure to move quickly or not speak freely, when what you really want is for the buyer to get comfortable and picture themselves in the space. If the seller is not home, they may not have a way to check the credentials of those requesting access or keep the home secure during the showing period. And if a buyer can't see the home in a timely fashion, they will move on to other homes they can see.
- MARKETING. Putting a sign in the yard and a listing on a public real estate site may not be enough. I spend a lot of time with my sellers discussing how to prepare their home for sale, taking an initial tour to discover any weaknesses that could affect buyer perception and desirability. We discuss ways to remedy or mitigate these features. I also bring in a stager who will advise on creating an appealing environment and prepare the listing for photographs. In these times, the services of a professional photographer are more important than ever. Virtual interactive tours are instrumental in getting lots of eyes on the listing while keeping everyone as safe as possible. Also keep in mind that, while a lot of people use the internet to begin their search not everyone is technically savvy, which could cause a seller to miss an entire segment of the population.
- RESOURCES. Most homeowners don't know how to secure a title commitment, or even what it's for. They usually don't have experience in evaluating a buyer's ability to close. They may not understand the loan approval process or what they are legally bound to disclose about their property. Not only can this cause delays, but in a worst case scenario it could cost them a lot of money in a lawsuit later on down the line, much more than they saved on a listing fee.
- EXPECTATIONS. A homeowner may be aware that the market is "hot" and that their neighbor got multiple offers and expect the same for themselves. They often aren't able to evaluate why and therefore make an objective assessment of what they can expect for themselves. They may not know what is normal for a transaction and make hasty decisions. Sometimes it can be hard to keep emotions from getting in the way of a successful outcome; I've seen clients want to cut off their nose to spite their face many times and had to work through the situation and remind them of their goals.
Everyone wants a good deal, but price is not the only consideration of value. Statistics show that sellers who engage the services of a REALTOR usually net more money than if they sell alone. Just like any other professional, Listing Agents bring years of expertise and resources to the deal that save time, money and potential legal struggles. If you're still on the fence, contact me and I'll be happy to discuss your particular real estate needs.
I would love to help you with your real estate journey.
