In today’s digital age, the prospect of selling one’s own house can be enticing. Information is everywhere to help the home owner sell their own property. In spite of all the real estate sites and millions of Google articles, some sellers attempting a FSBO, or For Sale By Owner, are still making devastating mistakes.
Here are the Top 3 Shocking Mistakes Killing Your FSBO
When a property owner lists a property for sale, they must be careful to be accurate and truthful with the description. Any mistakes may be considered misleading, or even fraudulent. This could potentially lead to a lawsuit.
This accuracy applies to any materials in the house, such as hardwood or stone that may actually be veneers or other materials made to resemble top of the line surfaces. It may also apply to the structure, such as the condition of the roof or foundation at the time of sale. If it is found that there is a slow leak after the sale, the seller may be responsible for “hidden defects.”
One way the seller can protect themselves is to list the house “As Is,” but this can be seen as an undesirable property and may cause buyers to proceed with caution. It implies there are issues with the house and the seller is leaving it up to the buyer to discover them.
What to do:
The best way a seller can provide an accurate listing is to hire a top inspector and have the house evaluated independent of the buyer’s appraisal. This will give an accurate report on the house’s condition. The seller can provide a copy of this report to the buyer at any point in the sale process.
Sellers sometimes believe that cutting out the “middle man” will lead to a highly profitable and quick sale. Without an agent acting as a third party in the sale, many sellers believe they will pocket the 2-5% agent commission for themselves.
In certain markets, this may be true. In most cases, the seller may not be correctly pricing their house and may leave a lot of money on the table.
In addition, For Sale By Owner sales may take longer. Even with new sites like Trulia and Zillow, FSBO houses do not get the exposure that traditional sales receive.
Real estate agents are sometimes reluctant to show their buyers properties for sale by the owner – even if the property is exactly what their client is looking for - because it means additional work for them if the seller has not done their homework.
What to do:
The best way a seller can promote themselves for their house sale is to place ads where ever they can to increase the amount of views. By increasing views, the seller has a better chance of attracting a buyer.
This includes maintain their own listings on sites like Zillow and Trulia, but also on Craigslist, eBay Classifieds and other online marketing sites popular in the area. It is also important to maintain ads in local newspapers, to place signs on the property and in the neighborhood.
The seller should not underestimate the power of social media and “putting the word out there.”Telling friends, neighbors and coworkers – either on line or in person is a great way to tell everyone that their house is for sale.
In addition to spreading the word, frequent advertised open houses will entice buyers to come and look without having to make an appointment for a visit. Some buyers prefer this method as it provides them with a certain amount of anonymity.
Failing to Properly Assess the Sale
Some sellers think their house will sell in a month because the neighbor’s house sold that quickly. It is important to assess the market conditions accurately for an effective sale. What happened at your neighbor’s sleek mansion in the spring may not be what you will experience when you try to sell your outdated old ranch style in winter.
What to do:
There may be many factors contributing to the days on market for any property. The smart seller who wants to sell their own property will research the market in their area and even in their city to determine:
- How long it takes for the average house to sell
- How much the houses are selling for – including above, below or even with the original asking price
- How these house compare to the seller’s for size, style, condition and desirability of location
This process is known as getting “comparable listings.”
That means finding out about properties in the seller’s area and comparing things like asking price, square footage, number of rooms, year of construction, upgrades and location.
The closer these sales happen to the time of the seller’s house going on the market, the more accurate the information. The best comparables are ones that happened in the past one to three months. Any longer than that and the information becomes less accurate.
Why would a seller go through all of this trouble to sell their house by themselves?
After the big housing crash of 2007, a lot of property owners owed more than their houses were worth. In the past year or so, most of these properties have increased in value to the point where the owners owe as much as the house is worth. They have moved from a position of negative equity to no equity.
This means that they no longer owe more than the house is worth and can sell without losing money. It also means that there is not enough equity in the house to be able to pay for an agent. In simple terms, if the owner owes $100000 and can sell the house for $100000, they can walk away without a loss. There is not, however, enough equity in the house to pay the $2000-5000 for the real estate agent (unless they are willing to pay that fee out of pocket).
Some of these sellers think they have no other option. That is not true.
If you are attempting to sell your own property right now, we can help.
If you have come to the realization that it is time to move right now to have a better life, but your house isn’t ready for the traditional market, we can help.
If you are juggling too many responsibilities to sell your house yourself this summer, then there are people who specialize in the sale of properties "as is" - usually within a week to resolve the situation quickly. We have a team of professionals able to assist you immediately.
Contact us for details.
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