When you’re looking to sell your home, will you go the “for sale by owner” route? This specific way of doing home sales is becoming even more popular (fueled by all of the online options out there today) and offers many benefits to the seller.
However, for all the benefits that this particular method offers the seller, there are just as many drawbacks. “For Sale By Owner” homes are a very tricky proposition to navigate, and getting the process wrong could end up costing you thousands of dollars (at the very least) for the entire transaction.
So what is right for your particular situation? In this blog, we’ll break down the idea of “for sale by owner” homes and talk about the pros and cons of this process so you can help make up your mind.
To examine what a “For Sale By Owner” home is, let’s first take a look at the traditional real estate process.
If an owner decides they want to sell their house, they’ll contact their trusted real estate agent. The real estate agent will then throw the house on the market – doing all the “marketing” for the house to attract potential buyers. From there, the agent will conduct the bulk of the business – everything from putting together the listing and taking families on walk-throughs to all of the final paperwork – and work with the seller to decide when to “pull the trigger” on an offer. As compensation for this, the real estate agent will get a percentage of the final price in return for their efforts.
On the other hand, a “for sale by owner” home is exactly what the phrase says – a home sold strictly by the owner, with minimal real estate agent involvement. Of course, there will be some attorneys and legal machinations involved in getting the paperwork finalized – but the real estate agent generally gets left behind for this specific transaction.
“For Sale By Owner” is a growing trend in the real estate world (just look at the various yard signs all around) – but is it the best option? Let’s dive into the pros and cons of this approach.
You’ll save money on the real estate agent. Here’s the biggest pro of the entire process: by selling the home yourself (using Zillow, Trulia, or some of the other real estate websites), you’ll save a bunch of money on the real estate agent fees. Those can easily add thousands upon thousands of dollars to the final price – always important when you’re already shelling out thousands upon thousands for your next home. By selling your home yourself, you’ll get to keep that money for your own purposes.
One other note before we get too far in the explanation – you should know about flat fee MLS listings. This is a necessary “compromise” between real estate agents and home sellers. In a flat fee MLS agreement, you just get the bare-bones real estate benefit – listing a home in the MLS (Multiple Listing Service entry) – for a flat fee rather than a percentage of the sale. It’s an essential element to know about when it comes to the for sale by owner world.
You’ll get a sense of control over the process. For a particular group of people, this aspect is as appealing as the savings. It can get very easy to get lost in the process when you work with a real estate agent; you might feel like you’re only there to sign checks and documents. With the “For Sale By Owner” process, you get a considerable portion of that control back – allowing you to get in on the ground floor of every important decision you make. In this complicated process, that is a real selling point for many.
You’ll have a perspective that no one else has. Most real estate agents will have a good handle on the selling process – but they might not have the same edge you have. You’ll always be the best person to know your house, inside and out (literally). You’ll probably know the best way to market it to – and negotiate the home sale with – anyone interested in buying it, too. So, cutting out that “middleman” through the real estate process might just be the best thing you need to maximize the profit from your home sale.
It can be exhausting. Selling a home can quickly become a full-time job – after all, that is what real estate agents do. The entire process from listing the house to marketing the house to scheduling home visits to negotiating the final price and closing on the house is an epic one – lasting months or more. Do you have the commitment to keep up with the demands? If you don’t have the time to properly allocate to selling your house, you might not get the best deal possible.
You may miss out on the best offers. Marketing your home to the best (and widest) pool of prospective buyers is the key to getting the most out of your home sale. Real estate agents are professionals in the tips and the tricks to spread the word as wide as possible. They have the ability to reach the most massive market for your home, so you’ll get the best price possible.
You could open yourself up to legal trouble. If you’re finishing off the real estate process yourself, you’ll have to be very, very careful with every legal document involved. Real estate agents have a deep familiarity and tons of experience with the usual process. That means they can help you avoid the kind of pitfalls that could put home sellers into legal hot water. If you don’t have everything wrapped up tightly, you could put yourself into serious trouble down the line. Chances are, you’ll still need to involve some type of real estate professional to check everything.
Need some more guidance through the world of for sale by owner homes – or anything else involving real estate? Let LemonBrew be your real estate resource. Including everything from matching with a real estate agent to lending to title insurance, we can help with everything you need to know involving real estate. Check us out right here.
One more thing to check out! Be sure to stop by our LemonBrew blog. Our engaging LemonBrew blog is the place to go for home buyers, real estate agents, mortgage lenders, and anyone else interested in the industry to get the information they need. Explore our many in-depth feature pieces, including “7 Myths About the Mortgage Loan Process,” “The Best Real Estate Agents Know These Four Things,” and “Title Insurance vs House Insurance: Do you need both?” At LemonBrew, we help simplify real estate.