Ups and Downs of <b>Homes for Sale</b> by Owners | Suite101.com
- Pros and Cons of Homes for Sale by Owners - jscreationzs
Homes for sale by owners present unique pitfalls as well as benefits for both buyers and sellers.
Home ownership is onerous enough, but choosing to buy or sell homes for sale by owners present unique challenges to both the seller and buyer. With extra work and adequate research, sellers can benefit from taking matters into their own hands. Buyers must beware of the potential pitfalls of buying homes for sale by owners.
For Sellers, no one Takes Care of You Like You Do
With the abundance of specialized real estate websites that are now offering services directly to buyers who choose to list their homes themselves, buyers who utilize one or more of these sites can take matters into their own hands and have an ongoing awareness of traffic and page views for their home.
The MLS or Multiple Listing Service, the monolithic online marketing resource that all brokers and agents use to list property, has always been off-limits to unlicensed people, but now sites like www.zillow.com, www.owners.com, www.isoldmyhouse.com, and www.forsalebyowner.com bring the power to market homes for sale by owner back in the hands of the sellers themselves. These online marketing services often feature 360-degree virtual tours, videos with pleasing music, multiple digital photos, and professional advice.
Sellers who choose to sell their homes by themselves without an agent often cite their unwillingness to throw money away on a commission as one of the chief reasons they list the home as a FSBO, or “for sale by owner.” Although owners may have absolutely no idea what a sales contract looks like when they start the process, they will insist that an agent who merely lists his or her house on the MLS and then disappears until the occasional open house is not earning the commission, which can be a tidy sum given the price of many homes for sale.
There is no evidence that a seller’s agent will hold out for a higher price, however. There is usually a relationship between the time the agent’s listing will expire and how low he or she will encourage the buyer to go in order to get the property sold, even given the lower commission rate.
This means that many buyers who target homes for sale by owners will have to negotiate with a buyer who is looking out for his or her own interests by trying to get the best price. One item to carefully research prior to listing the home on any service is for the homeowner to be clear on the other home prices listed nearby. Similar homes with similar age, square footage, upgrades, and property size should be in a range equivalent with the home for sale by owner. Sellers may even want to have the home professionally appraised. Buyers are cautioned to do the same research themselves if they are not using a buyer’s agent.
Preparing the “Model Home” Yourself
Prior to listing the home for sale by owner, the homeowner should take care to clean and arrange all rooms and exterior to be aesthetically pleasing to potential buyers, not only for showings but for digital photography online. Remove all clutter. Use colors like beige or ecru on the walls where possible; potential buyers respond to homes that are neutral in color because they ultimately want to put their own stamp on it once they move in. Remove quirky personal items which may seem charming to you but weird to potential customers.
There are many experts in “Home Staging” that can help with preparing the home for sale for its open houses. Buyers are highly suggestible and emotional about home-buying, so the smart seller will be certain to depersonalize the home. Buyers want the home to look as much like a brand new, never-lived-in model “American Dream Home” as it can. Sarah Dowdey of www.howstuffworks.com even says that “Scent marketing is the latest frontier in an advertising landscape that has nearly exhausted the possibilities of auditory and visual marketing,” so get out the potpourri.
Contracts and Legalities for Real Estate by Owner
Another hypothetically difficult challenge to selling homes by the owner is the legal hassle of researching rules and regulations regarding lead paint, asbestos, etc. in the area. Ignorance of the law is no excuse for failing to provide information to potential buyers about problems or issues with the property. This is called full disclosure.
The good news is that there are many books now on the market with step-by-step procedures as to how to sell a home by owner. Having said this, many FSBO sellers use an attorney to finalize contracts. Either way, the cost of commission is not an issue for the savvy seller. After researching real estate contracts, be sure to also investigate financing. Ask if the buyer has already been pre-approved for a loan.
Whatever the reasons for considering selling a home without an agent, sellers who contemplate this option should research thoroughly. This is an important decision that has important financial and legal consequences. Still, the benefits of saving money, learning the real estate industry, and taking a more hands-on approach to the sales process are considerable.
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