Sellers are opting to sell their homes privately… But is that the best move?

October 23, 2014

Sellers are opting to sell their homes privately… But is that the best move?

frugal_Private_Real_Estate

F rugality in today’s world makes sense! Our parents used to admonish, “money does not grow on trees” and there was more than a kernel of truth in that. Looking closely at where our dollars are going or will be going is the right thing to do.

 

Regarding home sales, some sellers are opting to sell their homes privately. On the surface this seems like a way to save money. However there are other factors to consider which may not be so apparent. Talking with a Realtor prior to making decisions is critical.

The following “Royal LePage Gale” information is important. Take a moment and go through it prior to making your home selling decision.

 

What are You Really Saving?

    • Let’s use a 5% commission of the sale price of your home as an example of a commission that you may pay to a real estate company for their services.
    • When you list your home for sale with a Real Estate Agent what you may not know is that half of the 5% commission i.e. 2.5% may be paid to the Agent that’s representing the Buyer.
    • A question you need to ask yourself is if you plan to sell your home privately, will you be co-operating with agents that are working with buyers and what commission fee are you willing to pay them for bringing a buyer…2.5%?
    • If the answer is Yes you will co-operate and the fee that you are willing to pay a buyer agent is 2.5% then you’re realistically only saving 2.5% in commission.

Armed with this information, are you still prepared to take on the job of being the Listing Agent and of trying to sell your home yourself? Is it really worth it?

Consider the following…

 

Sellers may suffer Equity Erosion

You’re the home owner, and you’ve also taken on the job of being the Listing Salesperson. But you lack access to important MLS data, such as Increase of Average Listing Days on Market for your type of home, Number of New Listings being introduced into the market that could compete with your home, increase in average days on market before a sale takes place.

In short, you simply don’t have the ability to keep informed about the changes taking place in your market area and this can prove to be disastrous. By the time you take action to reduce your listing price to compensate for a change in market conditions, your equity may have become severely compromised. A real estate agent working to protect your best interest will always keep a close eye on market conditions and will keep you informed, ensuring that equity erosion does not occur or is kept to a minimum.

Who is looking after the Private Seller’s Best Interests?

When you sell your home yourself, there is no one looking after your best interests. In order to get your home sold, you’re faced with the prospect of negotiating with up to 2800 plus members of the Ottawa Real Estate Board who are representing the best interests of their Buyers.

The Private Seller’s Limitations in Marketing

The vast majority of For Sale By Owner (FSBO) companies offer limited services to those looking to sell their home privately. These services are generally limited to a lawn sign, an ad in the local newspaper, an ad placed on the FSBO company’s own web site, and a Mere Posting on MLS (if the Seller is willing to pay extra for this service).

Qualifying Buyers for Financing

Consider the difficulty you’ll have assessing a Buyer’s financial ability to purchase your home. You will be ill-equipped to qualify them as to the type of home best suited to their needs and lifestyle. Understandably, you won’t have the expertise in asking the right questions to determine the Buyer’s qualifications. This all too often results in a Buyer pulling out of an agreement to purchase when they realize at the last minute that they cannot finance their new home purchase. You are now faced with the unwanted task of starting the whole listing process all over again.

The Private Seller is not trained to deal with the complex process of creating the Agreement of Purchase & Sale and all related documents needed to Close the Sale

When selling your home privately, you may use the services of your lawyer to draft the necessary documents, which again can be disastrous. The lawyer will draft the offer based on your instructions, but how will you know what terms and conditions to include in the agreement? Will you know which service providers are needed to bring about an unconditional sale?

Security for You and Your Family

For the most part you won’t know the identity or background of the individuals viewing your home or the identity of attendees visiting your open house. Real Estate Agents are trained to obtain the identity and background information of the buyer and take the necessary steps to ensure the safety of you and your family.

Best Buyer Suited for the Private Seller’s Home May Never Get to See It

The Buyer that’s best suited for your home may never get an opportunity to see it, as you may not be available. Real Estate is not your full time job and you simply may not be available to show your property when a buyer is ready to see it.

Relocation Buyers

Buyers being relocated have a specific time frame to view homes and may not have an opportunity to make another house hunting trip. The agent working with a relocation buyer sets up viewings well in advance of the buyer’s arrival based on the buyer’s criteria, making all efforts to ensure that the process is carried out in an efficient and timely manner. A relocation buyer may never have an opportunity to see your home due to time constraints and your availability.

Making Money vs. Saving Money

It’s important to understand that there is a profound difference between making money and saving money. A trained real estate professional will not only save you money, but will also help you to make money. They are the insurance to protect your equity. It’s true that the most expensive real estate service is one that does not perform, and performance is obtaining the highest sale price possible, not selling the home at any price just to save commission.

      <h3<

Agent Gets Paid only on Successful Completion of the TransactionNo monies are paid up front for a real estate agent’s services. In contrast, FSBO companies require you to pay all the listing fees up front, regardless of whether or not your home sells.

As your Home 2 Home Connection Realtors we have a wealth of information and experience to guide you through the successful and profitable sale of your home. Contact us today for a confidential consultation and additional details on why you could be disadvantaged as a result of selling privately!

Posted by with 0 Comments in News

Leave a Reply

Your email address will not be published. Required fields are marked *