Pros And Cons of selling your own home
With this seller’s market and low inventory, you might be considering selling your home without a Realtor. What does it really entail and what are the pros and cons with a for sale by owner process?
Trust me, if I were you and I could save thousands of dollars by doing something myself I would strongly consider it. Even though I’m a Realtor, I can see how enticing it is to sell a home on your own, but there are a few things worth considering first before you dive into it.
Take a minute to reflect on your personality and how involved you like to be in situations. If you like to constantly be in the loop and know what’s going on, you might enjoy the for sale by owner process. But, if you’re more of a “set it and forget it” type of person, you might start feeling overwhelmed with selling a home yourself.
It’s not always just about the money, sometimes your sanity and time are worth more than the thousands you could potentially save.
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Pros of selling your own home
Let’s start with the positives first! Believe it or not, money isn’t the only benefit to selling a house on your own. You tend to have more control as a for sale by owner and that can be enough to overcome the cons we go over later on.
- You could profit more-
This is the biggest benefit to selling your home on your own. Your profits can be thousands if not tens of thousands dollars higher if you sold on your own which might be all of the reasons you need.But, keep in mind that you should still cover the buyer’s agent fees. The FSBO websites are not frequented as often by buyers and 89% of buyers use a real estate agent in order to purchase their homes.
If you’re not paying a buyer’s agents fee, chances are the Realtor won’t take the buyer to your home, or the buyer will choose to look at another home in order to avoid having to cover the buyer’s agent commission themselves. So, when you’re calculating your potential earnings, consider the buyer’s agent fee as necessary.
- You can list the home as soon as you’re ready–
You don’t have to follow a listing agents schedule in order to list the home. You get to list as soon as you’re ready! - Avoid the awkwardness of interviewing Realtors-
Going through the same listing presentation over and over as you choose the perfect listing agent can get tedious and frustrating. By representing yourself you won’t need to go through this!An added bonus is you won’t have to worry about rejecting the Realtors who didn’t make the cut!
- Have full control over the process-
Not only do you have full control of how and when to list, but you have full control over how the whole process goes. You can follow up with the buyer’s agent/buyers and lender as often as you like and on your own schedule. - Have direct contact with the other parties-
To be completely honest, in my experience, sometimes agents make things harder than they have to be. There have been times when a deal was made much easier because I was able to speak directly to a seller. This can be a huge benefit if you enter into some obstacles throughout the home selling process. - Sometimes Realtors don’t have your best interest at heart –
Unfortunately, some Realtors are only after the money. They don’t have your best interest at heart and don’t fight as hard for you as they should. If you represent yourself you’ll fight as hard as possible for your own interests and that might end up being more beneficial for you. - You know the property best–
No one is ever going to know the home as well as you. You’ll know the quirks and how best to showcase and market your home to potential buyers. A powerful story of how much the home has meant to you can be the last push a buyer needs in order to move forward.
Cons Of Selling Your own Home
Despite the numerous benefits of selling a home on your own, there are a number of downsides as well. Most of the downsides have to do with the non-monetary aspects of the transaction. What you need to decide for yourself is whether the money you’d save is worth the hassle of selling your home without a Realtor.
- You have to be available to answer calls often–
As a Realtor we have to be available 24/7 (Okay, maybe not 24 but 16/7) If you’re selling your home by owner, you will have to be ready to take calls after work hours and on weekends with updates and negotiations. - You have to vet the buyers on your own–
There are a number of questions I always ask the buyer’s agent before presenting an offer. It’s important to vet the buyers, especially these days with the job market instability. If you’re selling a house by yourself it can be tough to determine who’s most eligible. - Decide which repairs are worth negotiating –
Some buyers will try to nickel and dime you for every single repair to get fixed. As a seller you need to know which ones are required to be fixed in order to obtain home insurance (and therefore a mortgage), and this is something an agent would know from experience. - You have to do paperwork –
If you’re anything like me, you will hate paperwork! There are so many documents you have to sign and read through, your head will spin! An agent can walk you through everything and explain each document in layman’s terms. - Legalities and liabilities–
As a seller you have certain duties to disclose defects about the property to the buyer. Not only that, but you have to know how the contract works and what you can and cannot do throughout the process. A Realtor would normally inform you of all of this throughout the selling process. - Overcome unexpected obstacles –
This is probably the biggest con home sellers overlook. Buying and selling a home isn’t easy, there are numerous obstacles that always pop up and you’ll have to know how to handle them.It’s easy to just throw your hands up in the air and think the deal is over, but with correct collaboration and creativity, you can get through most issues. Some common ones I see are:
- Fighting low appraisal –
Did you know you can fight a low appraisal? There’s an appeal process that requires the collaboration of all parties and the lender in order to submit. A Realtor would know how to read an appraisal and how to properly fight for a higher price. - Inspection issues–
Inspectors always manage to find hundreds of issues with your home and sometimes it can be difficult to accept that your house has problems. The important thing is to focus on how hard it is to fix. Is it even necessary to fix for insurance? If it is, can the buyers switch to a rehab loan instead?
- Fighting low appraisal –
- Endure stress–
Selling a home is stressful, especially when you’re in the thick of it. Realtors usually deal with things behind the scenes that they don’t involve you in unless it’s absolutely necessary. If you’re unable to handle stresses, selling your home by yourself might not be worth the headache for you. - Know what buyers are looking for and market trends –
A Realtor’s experience is valuable in showcasing your home properly. Agents know what trends buyers are currently interested in and how to make the property ready for buyers! They would recommend everything from paint colors to what flowers offer the best curb appeal. - Don’t have access to a Realtor network –
Having a network of Realtors who share your home on their social media and with their buyers can be very valuable. If you are selling your home without a Realtor, you won’t have access to that. - Time consuming –
Selling homes is literally our full time job! It can be very time consuming and difficult to balance with your current responsibilities and work duties. - Difficult to determine which offers are best –
If you’re in a multiple offer situation, the offers might be very similar and hard to pick through. A Realtor knows what information to focus on and how to rank the offers from best to worst. There are certain nuances that come from experience and a Realtor can explain them to you. The highest priced offer isn’t always the best option. - There’s a stigma that FSBO are hiding something – Some buyers and buyers agents get nervous about For Sale By Owner homes and think the seller might be hiding something. This isn’t always the case, but it can cause difficulty.
- Attract bargain shoppers-
For Sale By Owner homes attract investors and bargain shoppers who might take advantage of you and submit low-ball offers on your home. - Confrontation –
Oh this is my least favorite part of being a real estate agent! If a buyer ends up being nasty and difficult, you might want to avoid that confrontation and have a representative. Unfortunately you won’t know that until it is too late.
What You Need To Know If You Sell Your Home Without A Realtor
Now that you know the pros and cons of selling your own home, what do you think? Are you up to the task?
I find that those who are huge DIY-ers and love to dive into research do well with the for sale by owner process. Remember that this might be easier or harder for you depending on your personality. If you do decide it’s worth it for you, consider the tips below on selling your home by owner and these tips on selling your home during a pandemic.
- List on MLS–
The Multiple Listing Service is syndicated across tons of sites that buyers frequent (Zillow, Realtor.com, Redfin, Trulia, etc). There are a number of flat fee brokerages you can list the home with and pay a smaller fee but it will give you access to the MLS. - Pay a buyer’s agent – As I mentioned earlier, most buyers purchase their homes with a real estate agent. Also, 29% of buyers found homes through their agents and not online by themselves so you’d be missing out on a huge chunk of potential buyers if you chose to not pay a buyer’s agent commission.
- Professional photos –
You can hire a professional photographer for less than $200! This is so important in order to properly market your home. With most buyers looking online first (especially due to COVID-19), hiring a professional photographer is essential. - Staging–
If you can afford it, I would recommend hiring a staging company so that your home can be viewed well (especially for homes that have less updates and awkward layouts). - Remove personal items-
Buyers have to be able to picture themselves in the home so do your best to remove all personal photography and other artifacts that could be distracting.