7 Things To Know To Avoid For Sale By Owner Disasters
7 Things To Know To Avoid For Sale By Owner Disasters
Doing 'For Sale By Owner' The Right Way
Homeowners, who don't have a lot of experience in selling, sometimes encounter many challenges and commit mistakes when they choose to sell their homes on their own. In case you are considering the "For Sale By Owner" or FSBO method, you need to have some knowledge about how things work to avoid mistakes and problems later on. To you, FSBO may seem like a good idea because selling your property alone will mean that you'll also make more money because you won't have to pay an agent any commission; however, you need to know certain issues before attempting to take the FSBO route.
Are you wondering if homeowners have been successful in selling their homes without the help of an agent? Yes, many have done this well, but some have also failed. FSBO may not be the right way for you, especially if you don't possess the experience or the knowledge for this. In case you are set about implementing your FSBO plan, here are a few tips that will help you to avoid problems that could spell disaster for you.
1What Is "For Sale By Owner"?
When homeowners decide to sell their properties, they often employ brokers or real estate agents, but some also choose to sell their properties by themselves. There are several reasons why some people opt for the latter, and the most popular one is that they want to save some money that would otherwise go to an agent's commission, which is usually around five to six percent of a property's total value. Still, it's best to keep a realistic view on things as some have had great success with FSBO sales, while others have failed.
2The Price Must Be Right
One of the main factors that draw in potential buyers is the price, and consumers generally stay away from those that cost too much. Many buyers also have agents who give them tips regarding property values, and you'll miss out on great buyer opportunities if your property remains on the market too long because it is overpriced. On the other hand, if your pricing is too low because you aren't entirely aware of the market value of your property, you will encounter huge losses. Your loss may even be greater than if you just hired an experienced agent to sell your home.
3The House Is Not Properly Prepared
It's highly likely that you've been living in your house for a very long time. Because you're so familiar with everything, you may no longer notice (or maybe you're not bothered anymore) by minor issues that may drive away potential buyers, like disorganization or clutter, cracked walls, or peeling paint. One benefit of having a real estate agent is that you'll have a person who can take a look at your abode with a fresh pair of eyes and identify certain issues that could be detrimental to the house selling process. An agent can also provide you with great tips about how you can enhance the appearance of your home so that it'll be more attractive to potential buyers.
4Challenges With Marketing
Most of the time, homeowners get the ball rolling as soon as they place the "For Sale" sign in their yard, as well as advertisements in the local paper. Although such actions are common and expected, you could end up waiting for a while before any buyer gets in touch with you. On the other hand, if you work with a real estate agent, he can list your property in the MLS or Multiple Listing Service and other relevant websites to increase your exposure. Still, if you are decided to do things on your own, you need to study what marketing strategies you can use to gain exposure for your property. Remember that a crucial part of selling is letting people know that your home is for sale.
5Being Inexperienced In Selling
A seasoned real estate agent has a keen eye about which buyer is just wasting your time and which one is interested in purchasing. If you are inexperienced in selling homes, it may be harder for you to distinguish who has good intentions and who hasn't. Moreover, it's possible to lose money during the negotiation process, especially if you don't know how to negotiate and if you are not aware of the facts or details that you could use to obtain a better deal. Buyers will quickly back out in case they perceive you as too greedy or if you become angry or irritated during negotiations.
6Legal Issues To Be Aware Of
Although it's a huge achievement once you sell your property without the help of a real estate agent, things could get sour quickly, especially if the buyer sues you after closing the sale. You should know about the state, local, or federal disclosures regarding your property because you may end up in trouble if you disregard them, and pleading ignorance is not an acceptable excuse. Therefore, when closing a deal, it's best to hire a real estate lawyer who could put everything, including disclosure papers and the sales contract, in order. This is a crucial step, and you must ask a lawyer to review every document or contract before signing, especially if you're not working with a real estate agent.
7Sale Is Not Properly Closed
It would be such a huge setback to have your deal come crumbling down after working so hard on it due to escrow. To avoid serious dilemmas, you should know and do the following: obtain an initial title report, open an escrow, order property inspections, check out contingencies and remove them if necessary, and demand a payoff for your mortgage. These are all your responsibilities and not an agent's duties, if you've opted for the "For Sale By Owner" process. Be aware that signing the contract is not the end, as there are still many loose ends to tie afterward.
FSBOs sound ideal, especially for those who wish to make more, but think about it twice if you have never done this before and if you need more info about it. Now, you are more aware of the common mistakes that could occur when attempting to sell your property through your own efforts. You also know that you have two options: to gain the necessary know-how to close the deal properly or to hire an experienced real estate professional.