Selling Your Home – Going it Alone or Using an Agent?
Listing Your Home
Selling your home is a difficult process, but while most people have traditionally turned to real estate agents to assist in the process, a growing number of homeowners are going it alone. These “For Sale By Owner” transactions – commonly abbreviated as “FSBOs” or “Fizbos” – are intended to save the seller money by eliminating real estate agent commissions. However, attempting to sell a home isn’t for everyone. Let’s look at some of the things you’ll want to consider.
Consider All of the Costs
Real estate agents typically charge between 3 and 6 percent of your home’s final selling price, which can add up to a significant amount of money with home prices typically topping $100,000. But while this may sound like a lot of money, it isn’t the only cost you should be considering. If you don’t have experience in the real estate market, you may find that an agent helps to get your home sold faster and for more money than you can negotiate on your own.
In addition, if you’ve already moved into your next home, you may be juggling two mortgage payments. The cost of maintaining both homes and paying both mortgages – often referred to as the “carrying costs” of both properties – can add up quickly. If selling your home on your own will take longer, you’ll need to weigh your commission savings over the carrying costs you’ll incur maintaining two homes.
Exposure is Important
Another important consideration is the amount of exposure your home will get from a real estate agent versus listing it yourself. Real estate agents have access to a network of resources designed to get the word out about your home, from the Multiple Listing Service (MLS) to other agents to real estate web sites. When you sell your home through a real estate agent, you’ll have someone working for you around the clock to help get your home noticed.
However, this isn’t to say that you can’t attract potential buyers on your own. The number of FSBO real estate web sites has grown dramatically in recent years, and the trend toward social networking online makes it easier than ever to help get your home noticed. Just be aware that it does require time and effort to market your home, which may be a challenge if you work a full-time job beyond trying to sell your home.
Respect Your Level of Experience
Real estate transactions aren’t simple matters. When you bought your first home, you likely sat and sifted through reams of paperwork at your closing – unless you’re an expert in real estate transactions, you probably didn’t know what it all meant. But all of the legal “mumbo-jumbo” in those papers important and necessary to protecting the rights of both you and the buyer. Leaving any of it out because you aren’t familiar with real estate law isn’t just negligent – it’s downright dangerous.
If you do decide to list your home on your own, it’s an absolute must to enlist the services of a real estate lawyer to help you prepare the necessary paperwork, which will add to your home selling expenses. You may also need to do a significant portion of the legwork, so be sure to account for the amount of extra time you’ll need to spend selling your home on your own.