FOR SALE BY OWNER

One of the great big questions once you decide to sell your home is if you need a Realtor to help you or if you can do it yourself and keep the money you would have paid in real estate commissions.

The short of the answer is of course you can. If you really want to and have the knowledge base to get it completed you can sell your home yourself despite what some Realtors will tell you. If you have all of the proper paperwork and have done this before there is absolutely no reason that you can't sell your own home.

But and this is a big BUT, you do have to know what you are doing or else you could really mess yourself up. What I see alot with For Sale By Owners is that they go under contract with people that aren't really ready to buy for whatever reason. These people have not been through underwriting on their mortgages and the deal falls apart because they don't really qualify for the price point they are looking in. I have been talking to several For Sale By Owners and one of them has had three transactions fall apart and the other has had four. Now that is an awlful lot of time off the market plus the aggravation that you thought you had the house sold but you didn't.

Agents are great at keeping transactions together and trying to prevent going under contract with unqualified buyers, but the best thing that a Realtor brings to the table is the ability to get you on the local Multiple Listing Service. The local MLS provides the listings within a couple of clicks of the computer to all of the local real estate people. This then gets your home exposed to Realtors who may have the buyer for your home. The MLS has become one of the most powerful tools to sell homes. According to the National Association of Realtors, 84% of all homes sold are sold because of the MLS.

The reason that this makes sense is to look at the path a buyer takes when purchasing a home. First they start with the computer and the paper. When they start calling on properties in the paper, some will be by Realtors and some will be For Sale By Owners. As the buyer starts talking to Realtors they realize that they can save several steps in the process by simply having the Realtor find them the property instead of them having to scan through dozens of ads on the computer and the paper each and every day and determine which ones they have already called on and which ones are new. With a Realtor, they only receive the new ones and ones with price changes each day in their email. Very simple and very clean. Buyers like saving time.

So once a buyer has connected with a Realtor that they like, they usually will be kept busy looking at properties with them and you, the For Sale By Owner, are off the radar. There are so many properties they are being shown they don't even entertain driving through neighborhoods anymore to look for available houses.

That brings about the second problem. Exposure. I keep lists of For Sale By Owners since my clients usually consider them hidden properties. Meaning that they are difficult to find. I have had people looking for a long time and never came across the For Sale By Owner property that I am showing them. A lot of buyers like to work with me because I have properties that no one else has. This takes a lot of research and time. Something that most buyers lack. If they could devote themselves full time to the effort and keep accurate records by phone number that they have already called like I do, then they would find more of these properties, but they don't. So you, the For Sale By Owner, stays hidden to them.

So if you decide that you want to sell your home yourself and that you can get enough exposure, then here are some tips for you.

1. I know that some Realtors only want to bug you about listing, but be as nice as possible. They may have a client. I call For Sale By Owners to get information on the homes to see if I have a buyer for them. Sometimes they are rude to me. I'm not interested in listing their home, I only want information about it. Consequently, I will not show these homes. Everyone wants to have a nice transaction, everyone wants to work with someone that if it should get difficult the seller will at least be civil and help get things resolved. Rude people are not at the top of my list to work with. Buyers feel the same way.

2. Offer at least a 3% commission to a buyers agent who brings a buyer. You will still save the 3% listing side of the transaction and you will get a professional to take the whole transaction through to closing. This is well worth your money. Besides, you have not been able to attract a buyer on your own so far, so take the savings you can get and get your house sold. Agents put their clients under contract with a Buyer/Broker Agreement that states if the seller does not pay the 3% commission then they will have to pay it. Most buyers will pass on the house if they have to pay the commission.

3. Have a copy and know your paperwork before you get a buyer interested. I have worked with some buyers who had tried to buy a For Sale By Owner but got spooked when the seller didn't know what was needed. They, of course, didn't know either and it got messy so they walked away. Dont' let that happen to you. If you would like a copy of the new Purchase Contract and the Disclosures, let me know and I'll email them over to you. Be prepared to sell.

4. Know upfront how much you want for an Earnest Money Deposit. If you get wishy washy, the buyer will try to get it as low as possible. Remember that this deposit is your liquidated damages in case they walk away from the deal for a reason not allowed in the contract.

5. Know what you want and need for possession. If you need a week to move out after closing you should put that in the contract. Buyers can be stunned when they pull up to the house after it has recorded in their name and the sellers have not moved out yet. Tensions can get tough and the reality is that you don't own the home anymore.

6. Biggest item of all! Everything must be in writing. Frequently when dealing directly with the seller, buyers will ask for things like having you leave the patio set or that the buyer will do something. For these things to be enforceable, they have to be in writing. So add an addendum to the contract that states those items.

So if you would like to sell your home yourself, you can definately do it, but if you want to get the exposure that an agent can provide you without the high fees, let me know. I have a flat fee MLS Advertising Plan that may work for you. It can get you on the MLS without having to pay a listing fee. Call me at 801-792-1257 for more information.

posted by: Patty Purdue with Utah Select Realty
your guide through the real estate jungle