If For Sale by Owner Can Make a Seller Money, Why Is it Often a Bad Idea?
Yes, it is legal to sell your house without the services of a licensed realtor. But, is it a wise move? Here are some things to consider...
You've seen the signs, "For Sale by Owner" on front yards. Some sellers are sure that they can do as good a job as a professional realtor and pocket the commission for themselves. Yes, it is legal to sell your house without the services of a licensed realtor. But, is it a wise move? Here are some things to consider.
Marketing is not easy
Selling a home is a marketing job. Most buyers search on dependable realty sites and rarely use other sources. Buyers are using discretion in selecting which online sources to use and avoid those which arouse suspicion. Realtors have an inventory of well presented, informative and attractive sources in which to present your home in the most favorable way and attract real interest. They also know how to describe the home in a way that answers the questions that potential buyers have and list the features they seek. Just putting up a "for sale" sign and posting on social media are nowhere effective in selling a home.
Just because an assessed value is available, that doesn't mean that the market value is accurate for that house. Tax assessments are assigned under community guidelines and are often no reflection of the market. Your home may have interior features that make it stand apart and draw a particular audience. The opposite is also true; you may overvalue the home and drive buyers away. Just because the house next door has an assessed value or sold for a certain price, doesn't necessarily apply to yours one way or another.
Visuals: curb appeal
Realistically, first impressions are vital to sales. Online viewers have an overwhelming volume with which to deal and you have only a few seconds to catch their eye. The same is with drive by sales. Presenting the home in the most favorable and sellable way means being objective. How does the buyer see it, not what are you think they do. Here marketing is central. You may also overdo any improvements and spend money unnecessarily to sell the home. Clean, well-kept homes with trimmed healthy lawns and clean sidewalks catch the eye. New paint and trim on the house show you care. Visual attraction is a way of starting the sales conversation.
Open House issues: scheduling, timing and unwelcome guests
Open House and showings to potential buyers are stressful experiences. And all too often nobody shows up. Also, the ones who do might be back later as burglars. Cleaning, greeting, answering questions and keeping an eye on total strangers who are going into rooms which only you use daily all add up to stress and possible problems. Also, Fair Housing rules apply. Any trace of discrimination can lead to legal problems. Realtors are skilled in the presentation and public relations areas that can lead to a successful closing. Are you confident in doing this?
Paperwork and legal obligations
Real estate is about land and titles. Land ownership is one of the most ancient categories of law and one of the most complex. Home sales require title searches and other significant paperwork such as disclosure statements. Failure to complete any of this can lead to major financial losses. Mortgages are equally complex. Realtors have the licenses, credentials and legal support to keep these issues in full compliance. This is the most serious area for FSBO. Brokerages and agents carry Errors and Omissions Insurance.
Real estate transactions are fertile ground for loopholes and possible lawsuits. FSBO sales never seem to include this type of possibility and the financial consequences can be severe.
Yes, you can sell your home in Washington, just like you can sell your car or truck. But the legal work, marketing and other steps to a successful closing can be serious issues of financial loss, not to mention lawsuits if not done correctly.
FSBO does let you pocket the commission the realtor would get. But when considered, the professional realtor can not only get the house sold more quickly but eliminate the legal pitfalls that could result if any omissions or errors occur in the sale. In FSBO the risks vastly outweigh the possible financial benefits.