There are many homeowners who would like to sell their homes by themselves thus saving money on commission. But who can you trust to tell you the truth about the how’s the why’s and the risks? Nine times out of ten you really can’t trust someone who is trying to sell you something (that’s probably more like 99 out of 100 truth be told). The tough part is that those people are the ones who are most well-versed in real estate. At the risk of becoming unpopular with my Realtor peers. I’m going to follow my teacher heart and explain home sales to you honestly. First of all can you sell your house on your own? Yes. Should you sell your home on your own? That depends. The more buyers who see your home the better your chance of getting the best purchase price. For the best chance of getting the best price for your home you need as much exposure to buyers as possible. If you are in a very high-traffic area you have a much better chance of getting more exposure; however that exposure will only be local. There are many many out of town buyers on the market to buy a home and you don’t want to exclude any of them. This is why many people consider Buy Owner and other similar services. Being as objective as possible. I’ll explain that Buy Owner collects a large sum of money up-front to advertise your home in places other than the MLS system. Buyers and Realtors use the “MLS” or multiple listing service system. It is a system tied to “IDX” which is a cooperative effort among all Realtors to list all homes for sale. By doing so it creates the most competition among homes and therefore is beneficial to property values. When you buy a car you can only buy a car in that dealer’s inventory. When you buy a home all Realtors have access to all listings regardless of which Realtor is on the sign. Getting listed on the MLS. There are opportunities for getting listed on the MLS for a flat fee. Doing so would give you the much needed advantage of exposing your house to more buyers while saving you the cost of paying a “listing agent” commission which is typically 3%. However to do so you are obligated to offer a commission to a buyer’s agent. Although you’re entitled to offer any amount to a buyer’s agent keep in mind that people are motivated by money. If a typical buyer’s commission in your area is 3% and you offer 2% it’s not much different than having one company offer you a $30,000 salary and another offering you a $50,000 salary. While a Realtor should not refuse to show a home he is entitled to be more enthusiastic about showing a home with a higher commission. By getting exposure on the MLS you do still have a chance of finding an unrepresented buyer which would mean you won’t owe a buyer’s agent commission. Are all MLS listings created alike? Absolutely not! If you’ve ever searched online for a home you must have noticed that some listings have multiple quality pictures and important details that catch your attention and give you the most information about the home. Other listings have only one picture of poor quality and little to no description. Most buyers skip over these listings. There are also various sites that offer MLS searches like Realtor com. A quick search on Realtor com will show that the different types of listings vary greatly in their presentation. Be sure that when pricing MLS listing services that you are comparing apples with apples. Do you have the time to sell your own home? FSBO homeowners typically get inundated with many phone calls; more of them will be from realtors and mortgage brokers than from potential buyers. This can take a significant amount of time away from your work day. One way to avoid the calls from Realtors is to have a Realtor list you on the MLS. It is illegal for a Realtor to solicit from a seller who is already listed by another agent. Either way you will still have the responsibility of answering buyer inquiries and requests for showings. Buyers are also notoriously impatient. Are you able to show your home with little notice? If a buyer is here from out of town and has a limited amount of time with which to look for a home it’s likely he won’t wait to see yours. Most listing realtors use electronic lock boxes that record which realtors have entered the property and at what time. This allows easy access while still keeping your home relatively safe. This is less of an issue for some people if they work from home and feel safe showing their home on their own. Who really saves the commission? Most buyers who look for FSBO’s are doing so because they want a “deal.” They are hoping or even expecting to save the amount of the commission when they buy your home. This means that you’ve spent your valuable time perhaps even taking away from your own job so that someone else can save money? It’s definitely something to keep in mind while negotiating with the buyer. What about negotiations and paperwork?Let’s say you’ve found a buyer. Let’s even pretend that it is an unrepresented buyer and you manage to negotiate a deal that saves each of you half of a typical commission. Now what? You’ll need to complete paperwork and the sales contract is only one part of that paperwork. There are necessary disclosures to a real estate sale. For example if you don’t have your buyers sign a disclosure explaining your homeowner’s association dues they could be released from the contract if they decide they don’t want to have that obligation. You’d have to start again from the beginning after losing time on the market and you could create serious problems for yourself if you’ve already put a contract on a house to buy. There are also many steps to supervising a closing that a realtor is well-versed in handling. One option would be to hire a real estate attorney. Another option is to hire a realtor who would handle the paperwork cover you with errors & omissions insurance and supervise the transaction through to closing. A typical fee for a realtor to handle the negotiation paperwork and closing is about 1%. If your buyer is being represented by a realtor you will have someone who knows how to complete the paperwork and supervise the transaction to closing. This person has a vested interest in seeing the deal close so that she can earn her commission. The only challenge here is to be sure that your interests are protected. This would be your responsibility because the buyer’s agent’s responsibility is to protect her client. It is still an option however. Be sure to ask a lot of questions as this may help. What if you can’t sell the house on your own? This is a very important possibility to consider. Many homeowners spend time and money trying to sell their homes only to have to eventually hire a listing agent when they are unsuccessful. In most cases they lose whatever money that may have spent to list their home on the MLS as well. Although there is no way to recapture time and you will not get back any advertising money you’ve spent you can recoup the money you spend listing on the MLS if you’ve entered into that type of arrangement beforehand. I never begrudge anyone the opportunity to save money when they can. To this end. I do offer a flat fee MLS listing service to FSBO’s with my honest best wishes that they are successful in selling their own home. Sometimes they hire me to represent their transaction from sale to closing thus saving the cost of having me market their home while still having the security of representation for the most critical part of the transaction. I often get the advantage of representing them on the home that they buy which is what I most enjoy. However. I always offer to my FSBO’s the opportunity to have the MLS fee I charge given back to them from the closing commission if they eventually decide to list the home with me. In this way they have the chance of saving a commission but they don’t lose the MLS money if they need me to get their home sold. Visit my site for more information on my flat fee MLS packages. I worked as a teacher for 10 years before becoming a Realtor. I explain this to my clients because my background motivates me to approach real estate more openly and honestly than Realtors with different backgrounds and perspectives. Please feel free to contact me with your questions and feel confident that I will give you honest thorough and accurate answers. Please visit my web site for useful information great links and free MLS searches www. TracySellsTampa com Sincerely,Tracy
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