The Art of Selling Your Own Home and Why You Should
- Category: Blog
- Published: Friday, 27 May 2016 00:48
- Written by Al
Question: What is the single biggest fee you'll ever pay for any service?
If you guessed selling your home, you would be correct.
Do you really know how much you pay a Realtor for basically filling out a few forms and about 5 hours of real work? How about $30,000 on a typical house selling for $400,000 today.
That's a lot of cash for very little value. It's a lot of cash for anything. Yet we pay it willingly and without thinking or blinking an eye. We've been trained to believe we should pay the price of a good car to sell our home. That's 30x more than you'll pay your lawyer. It's your kid's college education for one year at Princeton. It's a Harley. It's a nice big boat. No matter how you look at it, real estate brokers charge a lot of money. And for what?
Realtors want us to believe there's real value in their services. That they are essential. Not so. Enter FSBO (For Sale By Owner) home selling services. Many are also brokers and will list your property on MLS for less than $1,000 total cost. And FSBO companies are taking over the market of selling houses. Why? Because basically, selling your home isn't that complicated. Ok, it's good to have some help. That's where FSBO companies come in. With a bit of help and common sense you save a lot of money.
Realtors want us to believe they have the skills to find buyers and close your deal. Actually, most buyers find houses they like and get their Realtor to arrange the showings. And they do that looking at MLS listings. There's no magic in that. Most buyers are also quite capable of calling sellers to view properties too. FSBO companies also provide that service for a nominal fee.
Realtors want us to believe you need them to arrange the legal side of things. Not really even close. First, Realtors are not qualified in anything related to real estate legal, period. You'll need a qualified real estate lawyer to transfer clear title anyway and for an extra small fee (which will be on their fee schedule of services offered) your lawyer will negotiate on your behalf and do the proper paperwork ready for signing.
Realtors want us to believe they are highly trained professionals whose services are invaluable. In their minds, maybe. Most real estate boards offer courses that will net you a licence in less than a month or less of part-time studies. Most courses are quite basic and do not provide much real knowledge that give realtors the super-powers they claim.
Realtors want us to believe they work hard for you. Really? Once you sign a listing contract with a brokerage, MLS takes over. Other agents sell your property 99% of the time. Your Realtor might pull up a buyer out of the hat but statistically all he/she did was get you on MLS. If you're a buyer, more than likely, you'll find your dream home yourself and call your Realtor to show it.
Many Realtors are part-timers with other full-time jobs and sell real estate for extra cash. While there are definitely really good true experienced real estate professionals, they represent less than 5% of any board membership. If you must list, find out who these 5% are and don't settle for Uncle Fred who just got his licence last week and wants to get some experience using you. Get one of the top 5% or none at all.
Realtors will offer doing open houses to find buyers. First fact is open houses do not sell houses. They are used to generate a buyer's list for your listing agent using your house as a convenient buyer staging area. Less than 1% of open houses result in sales from people snooping through your home while you're not at home and you've entrusted it to some junior agent sitting in the living room.
People looking for houses don't use open houses - they go through the MLS or other advertising or drive around and look for signs. Open houses are a waste of time and designed to give you the impression your agent is working for you. Chances are he's assigned an even more junior agent to man your home for the few hours it's open.
Real estate brokers are fond of filling their offices with bodies who happen to have real estate licences and bring in lots of listings. Simple math says the broker will make good money just by volume alone. Few listing brokers/agents sell their own listings. Real estate brokerages are warehouses for listings, the more listings the better, because sooner or later many will sell. Not by his agents, mind you. MLS will do that.
Remember, MLS is what sells your home. Not listing agents. So why pay to list when you can do that yourself and smart and serious buyers will find you anyway. Your listing is just another can of soup on the shelf to a broker.
One more thing is to do yourself a big favour and get a professional real estate appraiser to provide you with an honest adjusted market evaluation so you list for the right price. Blindly listing at some dreamed-up price will result either in a gift to some buyer or your property will go stale on the market. Neither is a good option. Pay the $300 for a proper evaluation.
Realtors like to promote the idea they know the market and you will be better off listing with them. In a normal market there is no way a $30,000 commission can be justified to work in your favour. There is no magic to selling your home any more than selling your car or a garage sale.
Find a good FSBO company that's been around a few years (there are many now) that has lots of listings and services and fixed fees and list with them. Find an experienced lawyer who agrees to do your negotiating (he/she will walk you through the process) and closing the deal. Find an experienced market appraisor to set your price. That's all you need to save a lot of hard earned equity. The result will be the same. Your efforts will be minimal. And you'll be richer.
My comments above come from years of being a licenced agent that I gave up a while back to pursue other non-real-estate interests. I'm currently selling one of my properties using the devices mentioned above.