The biggest reason people attempt to sell their own home is obviously, to save money. But be forewarned, selling your own home isn\'t the effortless money saver you may think it is.
We all have friends or neighbors who\'ve sold themselves, maybe even you have. Two things every successful private seller has in common are; they\'ll all tell you they got what they expected price wise and they saved so and so dollars in agent’s commission.
The fact is most private sellers really don\'t have a substantive idea of how much money they saved, if in fact they saved any money at all.
The only thing most private sellers know for sure is whatever commission rate they were quoted (usually the highest one), multiplied by their sale price. And realistically, do you think if that private Seller eventually discovered it cost them money, they\'d tell you.
In order to understand the true cost of selling your own home, you have to understand the general dynamics of the real estate market itself and how that will affect you.
The hypothetical true worth of a home is determined by the demand in the market for that home as compared to similar homes. A homes true worth is the dollar amount (and terms) a particular buyer pays for that home. When attempting to sell a home demand is created by making as many "ready, willing and able", qualified buyers who are in the market for a home like yours, at your price, aware of your home. Those buyers determine what they are willing to pay for a particular home based on how it compares to other similar homes they\'ve seen.
Obviously enough then, anyone selling a home wants as many ready, willing and able buyers to know about the home as possible.
The first thing you\'re going to do is start marketing your home. This will include a sign, newspaper ad(s) and possibly, a web site listing (start keeping track of dollars).
A few facts to keep in mind:In excess of 80% of all home sales involve a Realtor which means, in excess of 80% of the buyers/sellers are utilizing a Realtor®. Which further means, the price you\'re ultimately hoping to get for your home is a direct result of the demand created through the actions and marketing of Realtors®.
My point isn\'t to say, you owe the value of your home to Realtors® and should be grateful, therefore list your home with a Realtor®, but rather; unless your marketing attracts the same quantity of ready, willing and able buyers, the odds are you will not achieve the same results as Realtors®. Those results being: to sell your home for the best price and terms, in the least amount of time, with the fewest "hassles".
Statistically, on average, a home listed with a Realtor® sells faster and at a higher price than a home sold by a private owner.
The reason for this is that homeowners don\'t have the marketing reach provided by the M.L.S. or the desire to spend the amount of money on print advertising Realtors® do. Both of which contribute to drawing in a greater number of qualified buyers.
Speaking of qualified buyers;
When your home is listed with a Realtor® and you have 10 showings, the odds are that every one of those buyers are both, looking for a home in your homes price range and are financially able to buy your home.
When selling yourself you\'ll be fortunate if 2 or 3 out of 10 people are qualified buyers. In other words, every "Tom, Dick, and Harry" will be trampling through your house.
The importance of generating the greatest number of "qualified" showings cannot be overstated in regard to a quicker sale with better terms.
The reasoning is as follows,
If you have 5 qualified buyers go through your home, they would all buy your home at a price. One of these would be willing to pay more than the others. If you have 15 qualified buyers go through your home, the same is true. They would all buy the home at a price, one willing to pay the most. The odds are however that the highest price the 1 buyer of the 15 is willing to pay, is greater than the highest price the 1 buyer of the 5 is willing to pay.
Obviously, the theoretical higher sale price produced by the increased number of qualified buyers negates at least some of the supposed savings of selling yourself. As does the fact that a faster sale will reduce the daily carrying costs incurred, (mortgage, utilities, insurance, taxes) waiting for the home to sell.
None of this is said without acknowledging that a private seller could get a higher sale price and could sell in a shorter period of time than a Realtor®. It all comes down to if you\'re going to make your decision relying on the best case scenario or accounting for the worst case scenario.
As I stated in, The Biggest Mistakes Sellers Make, overpricing your home will make even the best marketing effort a waste of time and money. Do not make the mistake of thinking buyers will love your home so much they will pay anything for it or that they have no idea how it compares to other homes.
If you overprice your home, buyers will know it, and most won\'t even bother making an offer on it.
To compound the problem of overpricing, if you have overpriced your home and at some point decide to lower the price, you\'ll have to start marketing all over again (remember, additional days on market = additional carrying costs) only now to a smaller market. And even if you managed to get the names and numbers of the people who\'ve already seen the home, it will be very difficult, if not impossible to get them to come through again. Mainly because, they\'ve probably already purchased.
Statistics say, the longer a home is on market, the lower the sale price.
And there are yet more reasons.
At some point, disclosures and contracts are going to become necessary. Are you aware of what you\'re legally required to disclose? Are you planning on hiring an attorney? I would definitely recommend it. I\'ve seen a number of "contracts" written by homeowners that terrified me just being in the same room with them. If you\'re planning on writing the contract, can you write it in such a way that it not only protects you, but the buyers as well? The consideration being; will your contract stand up to scrutiny should the buyers hire an attorney of their own?
Mistakes made in disclosures and contracts can make you liable for thousands of dollars, for years into the future.
At this point, you potentially have two attorneys hired. Are you still saving money?
Lastly, a little talked about (rarely admitted) cost incurred in a great many private owner sales are the "we\'ll throw that in" expense. This expense usually happens when the owner, during the first showing to the eventual buyer of their home, offhandedly says, either, "yeah, that goes with the house" or "if you buy the house, I\'ll throw that in". This happens because the owner is trying to make the sale, not considering that the buyers WILL hold him to it and that the riding mower or side by side refrigerator or washer-dryer wasn\'t going to make or break the sale. Most private sellers don\'t even consider this expense when talking about their "savings".
Experienced Realtors® know instinctively what not to say and how not to say it. I hope you can see why I believe it\'s very difficult for a homeowner to determine if in fact they saved by selling themselves.