I recently did a video blog regarding those who are trying out the route of "For Sale By Owners", more commonly referred to in the real estate world as the unrepresented seller. In the video blog I addressed the most common reason that homeowners choose this route, which is "saving on the costs of commissions" you can see the full video blog here. After a few additional questions from my readers I will addressing some of the other reasons that you may want to reconsider using a Realtor to get your home sold !
1. Pricing
- Most people would assume we are talking about overpricing, but there is the exception with the market picking up that you may UNDERPRICE your home. Many homes are receiving multiple offers because buyers have begun making purchases before the interest rates begin to rise anymore than they already have !
- Another aspect of pricing that you have to keep in mind is how quickly do you want to sell ? This is very important with someone who is invested in doing it on their own is so you know exactly how much time this will take you because time is money.
- Most homeowners will ask general questions to buyers to see how "serious" they are about purchasing a home but they might not know the questions they should be asking. Even a well paid professional with good credit might not qualify for a home due to excessive debts, or a couple just starting out might be able to qualify although only one of them are working. General questions like what they do for work, income, or credit score are often not enough to truly qualify a buyer.
- Mortgage Pre-Approvals are often the one thing a seller knows to ask for but again unfortunately they are at a disadvantage because they will not know if the buyers application has gone through an underwriting process. Most Realtors will have a reputable mortgage company they work with that will be able to give homeowners some piece of mind after a 2nd pre-qualification is done by the buyer, knowing when you should ask for the 2nd approval and when it is not needed is very important. Often times bigger is better is what a homeowner will assume BUT it is actually quite the opposite, again you need to know the questions to ask so that you are protected.
3. Advertising Abilities & Follow Up
- Each website you post your home on will cost between $500-$1000 per ad, and this is only usually for a short period of time. There are some major websites you will want to put your home the most obvious being MLS, Zillow, Trulia, Optimum Homes you will need to reach possible buyers. Free advertising sites like Craigs List will often bring you many leads, but the majority will not be qualified buyers - remember quality of quantity is very important.
- The contact person on these ads are often sold to Real Estate Agents who purchase by the zip code, you will need to specifically ask when you are buying each ad space who will be the contact person. In some cases you might not be able to be the contact person, and those leads will be sent out to Real Estate Agents who may or may not take them to see your listing.
- Once you have bought your ad, bought the right to be the contact person if the website allows next you have to figure out how you will keeping all the records of these people, following up, scheduling appointments and most importantly following up after the showing. Each website will pass along the buyers information to you differently so you will need to have a system before you begin receiving the leads.
- Showings can become tricky because of those sites that did not allow you to be the contact person because of the ad space already being purchased by other real estate agents. My advice is although you are doing this to save the commissions many agents will bring you qualified buyers while working in a Buyers Agent capacity. You should be prepared to speak with these agents and know the questions to qualify them as a Buyers Agent so you don't lose out on the potential buyer.
- Negotiations are a particular point where you need to know the procedures, many homeowners assume that an accepted offer that they are somehow bound to the buyer and visa versa, that is not the case. No one is bound until contracts are FULLY signed, and down payments are placed into an attorneys escrow account.
- Contracts need to be written carefully, but you must know the right questions to ask so that when your attorney writes up the contract of sale everything needed into the contract is there to protect you. Things such as closing dates, what will or won't be in the home, what will and will not represented, and specific financing terms are often overlooked by a homeowner after it has been agreed upon during the negotiations. Unfortunately what you might have verbally agreed to does not have to be done unless it is written in the contract.
- Knowing the procedures often involves Town & Village Laws & Building Codes, knowing what you will need to legalize and what you will not need to legalize is a very big part of selling your home. Not only does it affect what you can legally advertise, expect the bank to allow you to include in the appraisal, and what will need to be included in the contracts are major key parts of selling your home.
- Home inspection is a large hurdle during any deal, because it can move along smoothly or make the deal much harder to negotiate. Many homeowners will feel the need to speak on every detail that the home inspector mentions, and many times these will be non-issues that don't need an explanation but an overbearing homeowner can cause buyers to panic. The Realtor is able to first advise on what issues might require negotiation, or put the buyers mind at ease. Often times speaking about these things with the home inspector is a normal part of the home inspection and inspectors will welcome the conversation to help their clients.
- Bank appraisals are the most important part of selling your home, this is when you have to prove to the bank that your home is selling for a fair market value. You will need to pull comparable homes from the area within the criteria that they will allow. If your home is overpriced and you are able to obtain a buyer, the bank will alert them to overpaying when they receive an appraisal that does not allow them to mortgage the home for the price agreed upon. Almost always there will need to be an agreement on a price change when this happens because buyers will have the right to not continue with the purchase.
This may seem like a lot and it is which is why hiring the right Realtor is always the best choice for a homeowner who is looking to sell. Remember their is no limit on how many Realtors you can interview before listing your home, so instead of spending months and endless hours trying to find a buye spend a few days and find yourself a Full-Service Realtor who will earn the commission by working harding to get you top dollar for your home !
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