If you haven’t heard, the internet has drastically changed how business is done by almost every business imaginable. Real estate is not exempt from the rapid changes in the market. Information is now the gold of yesterday. Companies that embrace technology and new ways of doing business will thrive as those that refuse to acknowledge new breakthroughs in information gathering will fail to exist. The question I pose to you, my readers, is: Will the internet and newly created algorithms replace real estate agents as we know them today?
Real estate sales have always been a people business. A buyer and seller work through the middle person, the real estate agent. Throughout my career, dating many years back, a small percentage of sellers have made the decision to go it on their own and sell without the services of a real estate company and agent. Some have felt successful while others wondered why they ever thought they could be their own agent and sell on their own.
Talk to any Realtor and they will let you know how difficult many of their real estate transactions have been. On the surface one would think that it should be simple to put out an ad on the internet and attract a buyer without the services of a Realtor. How difficult can it be to let your would-be buyer know how much you want and when you want to move? The answer; sometimes so difficult that many agents have called it their last deal and gone on to other jobs and businesses!
Let’s imagine that you have a home you want to sell to move to a senior apartment, condo or community. The first step would be to establish a price. You could get a licensed appraiser to stop out which would cost about $500. That should give you a solid idea of value. However, that price may seem too conservative, so you ask about 10% more than the appraised amount because you know that your home is special and your neighbor agrees. You know that no other home has the love and care put into your house. You know that you have countless hours spent in your landscaping as well as the other improvements made over the years. Will a new furnace, water heater and roof make your home worth more than other homes competing? Will a new well pump, windows and siding bring you back the dollars you spent? How about the new flooring, paint and carpet as well as the kitchen and bath remodel? How do you put a figure on those seen and unseen benefits?
Pricing a home correctly takes years of experience and a Realtor understands that even an appraiser will not consider certain amenities when establishing a price. Appraisers look at descriptions of homes, but Realtors show those houses every day, listening to responses of today’s buyers. A Realtor will have the most accurate view of the competition so when pricing, there is much nuance. Appraisers are important and will come into play when selling because if a buyer needs a mortgage (most do) the bank will insist on having the home appraised. But the Realtor will set the price based on so many factors which will add to success and top dollar offers. A home priced too high will sit, even in this hot market. A home prices too low will attract multiple offers. How do you know which offer to take?
Timing your move is critical to easing the stress level and allowing for the move-in date of your new residence. Let’s say you can get into your new community in three months, but you want to sell now. Do you know how to present that to a buyer? Do you know how long it takes to get a firm loan approval? Are you familiar with renting back from your would-be buyer? How much would you pay your buyer to stay after closing and what is the liability on the seller’s part?
You will need to prepare your home for sale. Does it make sense to put in new windows but avoid new flooring and paint on the interior? Which improvements will bring back the most return? Which improvements are a waste of time and money? If your home is vacant, how difficult will it be to sell your home for top dollar? Would staging (rental furniture) make sense and how much does that cost?
Imagine having strangers walking through your home. Would you feel safe? How do you know who could afford it and who is just wasting your time? If a buyer did show interest, would you be making statements that could inevitably stir up legal liability which could come back to haunt you?
Most for sale by owners (FSBO’S as known by Realtors) will need to hire an attorney to put together the offer and accompanying paperwork. Their fees will add to the cost of selling on your own. Your attorney represents you. Who will represent the buyer? The buyer is looking out for their interests and you are looking out for your own. Can you see the flaw in that scenario?
Making your home available to the greatest number of would-be buyers is the most critical and advantageous factors in getting the best price possible. Can you imagine accepting an offer from someone at church who heard about you selling and never testing the entire group of buyers waiting for a home just like yours to enter the marketplace? Sure, it was simple and easy. You are both wonderful people. Then after the closing you see a home exactly like yours sell for 20% more! You avoided the 6% percent Realtor commission to lose 14% plus had to do all the work of selling! Now how would you feel?
I know this article may read like an ad for using a real estate agent…it is! When I sold any properties in my lifetime, I had another agent sell it for me and I’m in the business! I knew that another agent could take so much off my plate as well as act as the middle person which made the buyers feel much more comfortable. The price I would get would be better than selling on my own. An agent in the middle is objective and would take away the emotional aspect of the owner. The pricing would be more accurate and the advice right on.
The home inspection is the most critical component to arriving at a closing verses the deal falling apart. In the majority of real estate transaction that fall apart, the home inspection is the number one reason for that failure to close. Home inspectors will spend about 3 hours studying and investigating every system of your home after you accept an offer. Most inspections expose 3-7 problems you never knew about. Now who is going to advocate for you the seller and get you bids from fair and honest contractors? A great Realtor will have contractors and service providers they have trusted over the years to back up the home inspection findings. Now someone must negotiate the items a buyer wants repaired or replace. Can you do that when the buyer knows it is in your best interest monetarily not to cure a defect?
I have listed several reasons why selling on your own can be a danger to you and your family both financially and emotionally. Using a Senior Real Estate Specialist is a great choice as we understand your challenges in moving from a long-time home to senior living or condominium. Being penny wise and dollar foolish describes wanting to save a commission paid verses selling on your own for far less and exposing yourself to the trials and tribulations described in this article. There is an old saying, “the man or woman who acts as their own Realtor has a fool for a client”. Adages have much wisdom and this one truly applies!