Homeowners interested in selling their homes, usually entertain this idea of selling privately. They heard through friends, neighbours or read somewhere in the news, on how they can save thousands of dollars, by not using the realtor. This is a true fact, you can save thousands of dollars on commission. After all using the internet, there are many options available to selling your home without a Realtor. Everything from For Sale by Owner website, flat MLS listing fees and the most recent introduction of MLS listing, by FSBOs. Talk about stiff competition and options.
Like with any do it your self option, where you have the potential to save money, there are pros and cons. What seems so easy, in fact, may not be for some, impossible for others and a simple task for the few. Let’s plug in a few numbers, using my condo as an example. Say I were to sell my condo for $160,000 (strong possibility I might, not kidding), at 5% paid out to the buying & selling agents, I’d shell out roughly $8,000 in commission fees. That means if I opted to sell the home my self, I could potentially save up to $8,000. Sounds easy huh? Well, not so much. After all, what’s really black or white?
If you talk to any Realtor, they will argue that they bring greater home exposure, less tire kickers, professional service, experienced marketing, market knowledge and in turn more competition for your home, hopefully resulting in a bidding war if you’re lucky. For Sale by Owner websites argue, that you can save thousands of dollars in commission, they they offer professional marketing, step by step guidance and more, yet all for a flat fee. Whichever way you look at it, both sides, make fair arguments.
Deciding to sell privately, really comes down to how well you know the market and how much time you have. The more time you give your self, the smoother the process. One does not need to rush, but rather should take the necessary time to price the home according to the market conditions. You should also be fairly confident in negotiating your own deals, have a respectable lawyer, ready at any given time and also be ready to take heat, from potential Realtors, for essentially being the black sheep and not wanting to use their service. Now if you got all of the above, that’s great, but as I recall, this article is about the pros and cons of selling privately. So are you really saving thousands of dollars in commission?
If you do opt to sell your home privately, do keep in mind a few of the following suggestions. Remeber, some things are worth paying more for. More money = More Quality usually:
- Private Home Sales work the best in a HOT Real Estate Market
- If an agent does approach you with a buyer and you do opt to sell to their buyer, you will have to pay a minimum of 2.5% commission or whatever you might have negotiated, ie 2% for for example
- Based on the above, you really are still paying comission, one way or another
- If a private home buyer (without agent) approaches you, if they are smart enough, will ask and expect a deeper discount on the price of your home, because after all you are saving by not using an agent
- Remember, you are out on your own, you have to verify all the financing, lawyer, property taxes, transfer of property, despite you having a good lawyer, you are the one that is left out in the open, if something goes wrong
If the above did not scare you off and you still want to try to sell your home privately, that’s great, congragdulations for being so brave and standing out from the rest. Thankfully for your self, as much as you are on your own, there is a lot of help out there, for selling your home privately. Some of them are:
- For Sale by Owner - List for free, save the commission and search for thousands of homes
- Property Sold – FSBO listing service, one of the bigger players in FSBO market
- Comm Free – Formerly known as For Sale by Owner, lots of different packages, something for everyone
- Property Guys- “Sell your house and pay your self the commission” , that’s their motto
There are is a lot of help online with listing your home, including some Realtors offering a flat fee for listing your home on the MLS. If you do choose to sell privately, do your research before, find the help needed and most importantly give your self a lot of time.