Author Topic: Selling home myself  (Read 3718 times)

Beardog

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Selling home myself
« on: September 12, 2013, 05:31:33 PM »
I would appreciate getting some perspectives on selling my home myself.  I live a disciplined, highly Mustachian life, but when I think about doing this, I am torn between complete dread of all the work involved and the knowledge that homes in my city (Boston metropolitan area) are highly desirable and are currently selling quickly and often at higher than listing prices.  I am single and the weight of the whole thing would fall on my shoulders.

Has anyone used online companies that offer support for FSBOs such as ForSaleByOwner.com?  What was your experience?

Can you suggest any strategies for negotiating real estate agent commissions?

Have you sold your own house before?  What can you tell me that will help me to avoid the pitfalls that you encountered?

I only found one posting on this subject and there wasn't much response and I'd really appreciate some help with this.  TIA. 

Daleth

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Re: Selling home myself
« Reply #1 on: September 12, 2013, 06:48:40 PM »
I personally think selling without a realtor is a bad idea, especially if you don't have much experience selling homes. It can be a good idea if you're really close to the bone, trying to get out from under a mortgage that's so close to the value of the house that you just don't have room for a commission, but generally I think it's one of those "penny wise and pound foolish" things.

In addition to the legwork/hassle of showing the house and hosting open houses, a **good, experienced** seller's agent does some critical things that you, realistically, probably can't do nearly as well:

- Sets the price. Sounds simple but it's not; this is based on knowing what comparable houses sold for in the last 1-3 months, how long they took to sell vs. how long you're willing to wait, why (in your realtor's opinion) this or that comparable house sold quickly or slowly or not at all... One of the things our seller's agent did for us last time we sold was tell us, when we wanted to set the price at $330k in order to hopefully get $320k, that in that price range buyers tended to use $25k increments to search (under $300k, under $325, under $350...), whereas at higher prices the buyers use $50k increments. In other words, said the realtor, if you set it at $330k a lot of perfectly good buyers won't even see it, because they're literally putting "$325k" as their max number when they search. So we put it at $325k in order to ensure that those buyers saw it... and it sold for $323k in a matter of days!

- Evaluates offers. This is HUGE. Realtors (by which i mean good, experienced ones) know which banks (i.e., banks that the buyer is preapproved by) take forever to close and which ones close quickly, which preapprovals look normal vs. which look suspect, which requests for contingencies or repairs are normal vs. which ones you should push back on, etc.

- Negotiates. Again, huge. A good realtor is able to talk with the buyer's agent in a way that you can't; they're both coming from the same knowledge base and neither of them has any EMOTIONAL investment in the sale, so they're just better negotiators, most likely, than you would be. They know how far they can push things, whereas you don't.

So my advice would be, don't do it FSBO unless, like I said, you're really close to the bone. Instead, take a couple of hours to do online research on and talk to realtors in your area, so that you can pick one who's really good and really experienced in this type of sale (your neighborhood, your price range).

Best of luck!

aj_yooper

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Re: Selling home myself
« Reply #2 on: September 12, 2013, 07:54:00 PM »
Selling or buying a home sans realtor is not scary.  My mother-in-law did it as well as friends. 

First, if you haven't already, watch some HGTV on selling homes.  De-clutter your residence; put unnecessary stuff in storage.   Do any needed maintenance on the home, clean everything, and change any idiosyncratic paint or design choices.  First appearances are crucial.  It is now a commodity, not your home.   Contact a real estate attorney to help you develop a sales contract blank and use that expertise to guide your contract work, things to prepare, look out for, etc.  Stage the home so it is inviting and accessible to the buyer.  Have a reputable home inspector do an evaluation for you so you know what needs to be repaired.  Invite several realtors in to give you a comparative market analysis and any suggestions.  Use this time to figure out which realtor you would use if your own efforts do not work out.  Develop a detailed listing of your home, similar to that you received when you bought it.  Analyze the comps from the realtors and your own local knowledge of the market.  Set a realistic price in line with the market.  Don't over price because you need a certain amount; follow the market.  I have only sold homes in sub-divisions, so I just put up a sign with copies of the listing.  I did not find newspaper ads helpful and think FSBO sites don't help.  Selling in an urban market will be more difficult regarding security issues, but probably better if your market is doing well.  Good luck!

Beardog

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Re: Selling home myself
« Reply #3 on: September 13, 2013, 04:48:23 AM »
Daleth and aj_yooper,

Thank you for offering your differing perspectives.  I appreciate hearing your thoughts and will be ruminating on them both as I continue my research.

Beardog.

scarab007

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Re: Selling home myself
« Reply #4 on: September 13, 2013, 10:06:44 AM »
Having bought and sold a few homes, using an agent made the process much smoother.  The act of selling property is not tricky, but just having someone in your corner that can help is a good thing (this is where having a solid agent is key). They help take the emotions out of selling and can bring up ideas that might not have been thought of.

Correct me if I am wrong, but I believe you need to be an active agent to list a house on MLS and other listing site? Could be wrong on that.  They do much more marketing and have contacts that most don't have if they are good. Also, I have dealt with some real nut cases on a few of my properties. I am glad I did not have to deal with them and can have that agent doing it.  There are some liabilities that an agent can help you deal with to limit your exposure to being sued.

Personally I am a big believer that you should hire good people who work in these fields. Yes, you can take the time to learn it and probably save a few extra bucks, but you have to look at your time and cost of what that is. Example, take clothes to cleaners or wash/iron yourself?  For me, cleaners is quick, easy and I can spend my time making money vs. sitting at home cleaning clothes.  The expense is worth it.

Hope this helps a little.

DoubleDown

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Re: Selling home myself
« Reply #5 on: September 13, 2013, 01:01:03 PM »
This is a tricky (but good) question in my mind, one I frequently wrestle with. I think the answer very much depends on the unique situation at hand, the market conditions, what the seller expects to get from a realtor, and so on. Nice wishy-washer answer, huh.

I've sold homes with realtors, and I sold one home on my own. If you've sold some homes in the past with the help of a realtor, and feel like you understand what needs to be done, I think it's definitely possible to sell your own home in the right conditions. I would not attempt to do it myself the first time. Enlist the help of a real estate attorney to draw up or review contracts and assist with settlement, making sure your interests are covered.

That said, I think in most situations a good RE agent will get you the most, and highest offers for your property, offsetting most or all of the listing agent's part of the realtor commission (probably 2.5 - 3% in most markets). Typically you'll have to pay the buyer's agent one way or another. Having your property listed on MLS is a necessity in many/most markets. It's not hard to make up that 2.5 - 3% by getting so much more market exposure to quality buyers through a good realtor with great advertising and positioning of your property.

I don't have any experience with the for-sale-by-owner websites, sorry. The one time I sold a house without an agent I used Craigslist, and it went exceptionally well. Got an excellent buyer and we settled extremely close to my listing price. That was somewhat of a unique situation though, when I sell my next rental home in a more typical market, I'll probably list with an agent to get top dollar.

Here's perhaps one "no lose" proposition: Get your house all ready to sell -- landscaped, well staged, professionally cleaned, etc. These are things that should be done whether or not you hire a realtor. Take lots of extremely flattering pictures, get an excellent comparative market analysis so you can competitively price your property, and post a very thoughtful, professional looking ad on Craigslist. If you get a suitable offer on your house, great! If you don't get any offers after a week or two (and you might need to re-post or bump your ad every few days), then you can list it with a realtor without having lost any significant time, and at no cost.

Best of luck to you in whatever you decide!

Simple Abundant Living

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Re: Selling home myself
« Reply #6 on: September 13, 2013, 01:36:07 PM »
I've sold several a couple houses myself, and used a realtor on others.  Where I live, there are realtor services that will list your property on the MLS for a flat fee.  You can even do a lock box, etc.  When I sold my homes, I just got advice from the title company I planned to use.  They gave me a copy of a contract I could have a prospective buyer fill out.  I did a very professional job- from cleaning/repairing, staging, photos, flyers, etc.  You still need to offer a minimum 3% to a buyers agent.  We just worked that into our price, then if we found a buyer with no agent, we had more wiggle room on the price.  It's a lot of work and time.  The only other downside I can think of is that some buyers are bothered by the homeowner walking around the house with them.  Try to be very professional.  Depersonalize the home- no family portraits, etc.  Make your home look like a model home.  Then as you take them around, give them a bit of space.  Point out the features, but don't overshare.  Your home isn't your home anymore.  It's a commodity for sale.  Be emotionally detached, as much as possible. 

mgreczyn

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Re: Selling home myself
« Reply #7 on: September 13, 2013, 01:54:19 PM »
I FSBO'd a house in OKC.  Just bought the signs and put them up.  My BIL also buys and sells a lot of houses in Denver. They build spec homes and offer discounts to those who buy without a realtor. It's absurdly easy, as the title company does almost all of the actual work.  You do need to make sure all of the forms get filled out properly, disclosure and all of that, but you should be able to figure out the laws in your state using Google. 

When I posted my house in Oklahoma, my first caller was... you guessed it, a realtor.  A very nice older lady who's face I was very familiar with because it had been plastered on the sign in the yard across the street from me for over a year, along with all of the other houses for sale in the neighborhood.  She was visiting to let me know how worried she was that I'd never be able to sell my house, how much work it was, yadda yadda.  Within 2 weeks I had 3 full price offers.  Then my neighbors from across the street fired her and borrowed my signs; their house was sold by the end of the month.  Of course, this was 2006, but then again OKC never went crazy the way the rest of the country did.

Note that realtors are NOT incentivized to get you a higher selling price, they are incentivized to move a lot of houses, which you do by lowering prices not raising them.  $10,000 more for your house only means $300 in their pocket.
« Last Edit: September 13, 2013, 01:57:35 PM by mgreczyn »

zinethstache

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Re: Selling home myself
« Reply #8 on: September 13, 2013, 04:20:28 PM »
I've never sold without a realtor but have one unsuccessful tale to tell and a tip. My BIL built a few homes from the ground up with a friend, the first 2 sold quickly and I don't think they used realtors. They ended up finding buyers before the homes were finished. These were custom homes on a golf course. Unfortunately the 3rd home my BIL lost his partner, never found a buyer ahead of time and was adamant he didnt need a realtor, why should he when he didn't need one with the other two. However the timing on this 3rd home was the worse, it was right when the market tanked. He lost SOOOO much money by being stubborn. Within a few months he paid for MLS, then finally at long last he hired a realtor who sold it at a huge loss. The market changed on him and he wasn't willing to change with it, live and learn.

Now for the tip, I did not see it mentioned yet, but In addition to decluttering, landscaping, staging. Pay for an inspection and fix anything the inspector finds, or if not fix, at least you know what to expect. Every inspector is different so it isn't 100% but if you've been in the home forever, it will be well worth it IMO. And I am saying this from the self inspecting buyer perspective. We do our own inspections for the most part, however when I sell my primary residence after having lived here for 20+ years, I will definitely pay the piper to discover what is hiding in these old walls:)

I've also heard other folks successful sells sans realtor too, those aren't so interesting of course.

We personally love our realtor and work him to the bone. If I could get my DH to get his license we would be set but I think he likes having another knowledgable guru to kick the tires with. Since were in buying mode, were technically not paying him but if we ever do sell he will be the one to do the deed.

Beardog

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Re: Selling home myself
« Reply #9 on: September 13, 2013, 06:24:30 PM »
I have enjoyed reading all of your responses and you've given me lots of good ideas to think about.  Thank you very much!
I especially like DoubleDown's idea of getting the house ready and posting it on Craig's List for a week or two before turning
it over to a real estate agent.   That feels manageable and like a good compromise between trying to do it completely on my own
and not trying at all to cash in on the benefits of being good real estate market.

Again, my sincere thanks to all who have responded.  It has helped me to think over what has been feeling like a particularly vexing
question.

Blindsquirrel

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Re: Selling home myself
« Reply #10 on: September 15, 2013, 02:59:33 PM »
   It costs you nothing to put an ad on Craigslist. Give it a try and see what happens.