The Unexpected Downsides of Selling Without an Agent

With the internet playing such a huge role in selling a house these days, going it alone—no real estate agent in sight—can look like a pretty simple decision. There are a few big reasons you’re probably considering this route, like being able to skip the 6% commission fee and having complete control over everything from asking price to showing times.

These are worthwhile pluses, and they shouldn’t be ignored. But before you decide to take the plunge all on your own, you should also take a look at some of the potential downfalls.


Pricing.  A large part of a real estate agent’s upfront work is research. How much have similar homes sold for? What are prices in the neighborhood like? What developments are down the road for this area?

Unless you live and breathe real estate, those questions may take a lot of time to answer. Even then, pricing your own home can be difficult for sentimentality’s sake. Many homeowners set their initial asking price too high and scare off would-be buyers.  Others make the mistake of setting it too low and lose money they might have gained.

You may still have to pay commission. Just because you’re forgoing an agent doesn’t mean your potential buyers will. When a seller pays that 6% commission, his or her agent typically splits it with the buyer’s agent—meaning you’re still responsible for that 3% unless you can convince the buyers to pay for it on their own. 3% may be a lot better than 6%, but it’s still more than most expect when deciding against an agent.

It may take longer. Selling a house with a realtor isn’t often a speedy process, but doing it yourself could take even longer. There are several reasons for this. First, without a realtor you won’t have access to the Multiple Listing Service, which agents use to advertise to other agents. That means less visibility, leaving you to put more time and energy into marketing on your own.

Also, unless you or a spouse can make selling your house a full-time job, you’re going to have to work around your current schedule, limiting your opportunities to show the house. When you do show it, expect to still have to wade through the usual amount of window-shoppers and nosy neighbors.

The bargaining and paperwork. Even after you’ve found a buyer, the difficulties aren’t necessarily over. Without a real estate agent to act as buffer between you and the buyer, negotiations can get dicey. Often, for sale by owner homes attract bargain hunters who expect a lower price. The key is to not get emotional, and also know what you’re willing to compromise on from the start.

Closings also come with a lot of legal paperwork, and without an agent to handle it for you, you’re going to need to do a lot of research or else risk your biggest investment. There are buyer’s contingencies, disclosure laws, and title and deed requirements to get up to speed on, and if it ends up being too overwhelming, you may have to involve a real estate attorney anyway.

The bottom line?

Selling a home on your own can be great if you have the right experience and already know what you’re doing. If not, sticking with an agent can actually save you hassle and money.

source: totalmortgage.com

Four Things You Need to Do Before Listing Your House

If you’re eager to sell your home and buy a new one, you might rush to put your house on the market. However, you should take a step back and really assess the situation. If there’s a lot of competition in your local market, your property can sit for several months with little interest. This can be frustrating and discouraging. For that matter, don’t rush. Here are four things you need to do before listing your house for sale.

1. How much do I owe?

 

Emotions may persuade you to sell your house quickly. Maybe you’re expanding your family and need a bigger home. Regardless of the situation, you need to crunch the numbers and determine whether now’s the right time to sell.

Take into consideration how much you owe the mortgage lender. Visit your lender’s website or call the bank to get a payoff amount. Once you have this information, determine how much you’ll need to sell the property for. A real estate agent typically requires a 6% commission, and if proceeds from the sale will go toward the down payment on the next property, decide how much you’ll need to profit from the sale.

For example, if you owe the bank $140,000, and realtors charge six percent commission, and you need a $7,000 down payment to purchase a new property, given these numbers you’ll need to sell for at least $155,400. The next question is: can you sale for this amount?

You may think you can get a certain price for your home, but the local market ultimately determines the value of the house. A realtor can provide comparable sales and statistics to help you understand what similar homes have sold for in recent months, or you can hire an appraiser to assess your home’s value.

2. Realtor vs. For Sale By Owner

 

Most home sellers prefer using a real estate agent to handle the transaction. The realtor is responsible for listing the house, marketing the property, arranging showings, plus they can help with paperwork and answer questions. However, after completing market research and getting an appraisal, you may decide that you can’t afford a six percent commission, and selling the home yourself might be the only alternative. You don’t need a realtor to sell your house, just make sure you know what you’re getting into before handling the sale yourself. You’re responsible for the marketing and the meetings with potential buyers.

3. Get pre-approved

 

Before listing your house for sale, get pre-approved for a new mortgage. The truth of the matter is, there’s no point in selling your house if you don’t qualify to buy a new one. A pre-approval is a simple process that takes less than a week. Basically, you complete a mortgage application, submit your income information and the lender pulls your credit. Based on this information, the bank determines if you qualify for a mortgage, and how much you’re eligible for receive.

4. Tour other homes for sale

 

Because many homebuyers seek move-in ready properties that require minimum improvements, you’ll need to compare your home with other houses on the market. You don’t have to invest a ton of money in total renovations, just know that the more modern the space, the easier it’ll be to sell. Visit similar homes for sale in your area to assess the competition. If your sale prices are comparable, but these homes are staged, updated and in better condition than your property, your home might not sell as quickly.

To make your property more appealing to buyers, de-personalize the space so that potential buyers can envision their family living in the home. Choose neutral colors for the wall and replace worn items, such as the carpet, appliances, fixtures, tile floors and windows. Most buyers aren’t looking for perfection, but at the same time, many aren’t going to purchase a home that requires thousands of dollars in improvements — unless the price is low enough.

Final Word

 

Home selling is a competitive game, especially when there are many homes on the market. However, if you do preliminary work and research the market, and if you know what buyers want, you can sell faster and move into a new place sooner.

source:  totalmortgage.com

Survival Tips for Living in a House You’re Trying to Sell

Those last minute panic-cleaning skills you’ve developed for in-law visits probably won’t do you much good when months of home showings are on your horizon. Unless you’ve already found the perfect new home and moved, that means it’s time to develop a long-term strategy, even if it’s just for the sake of your own sanity.
Here are some tips for maintaining that tricky balance between the perfect show house and one you actually live in.


Keep the house ready at all times.

Well, try to.

In reality, you’re probably not going to be able to keep your house showroom-worthy for weeks or months at a time. The key, though, is to be constantly making the attempt. That way, when the call comes and you need to get ready for a showing, you can whip the place into shape quickly.

This is a perfect situation to take a page out of the home staging manual. Box up your family pictures and personal collections in anticipation of your move, and clear all your flat surfaces and as much as your storage space as you can spare. If you need to rent a storage unit in the meantime, then go for it. The less clutter you have in your house, the better it will look to buyers and the easier it will be for you to keep neat.

Ask for as much notice as possible

No realtor will try to show your house without first calling you, but when they call is what you should worry about. Realtors’ practices vary, and you may end up with ten hours’ notice or ten minutes’.

The solution? Ask for notice at least a few hours in advance.

If that’s not enough control for you, you can also turn away showings when your house isn’t ready, or limit showings to certain parts of the day. Keep in mind, though, that “limit” is the operative word here. The harder it is for potential buyers to see your house, the fewer opportunities you’ll have for for a serious offer.

Always leave during a showing if you can—and have a plan

Generally speaking, it’s best to leave the house when you have a showing. No potential buyer wants to be reminded that the house belongs to a stranger, or feel watched as they make their decisions. Plus, you probably don’t need to see someone judging your backsplash.

The actual leaving can be a hassle, though, especially if you work at home or have an already-tight schedule to juggle. The trick is to find a quiet place where you can get work done, like a library or coffee shop, or put off doing your errands until a showing forces you out. That way, showings can still be productive.

Be smart about your privacy

You may be used to leaving personal documents and valuables scattered around your house (no judgment), but that’s probably not smart if you’re welcoming strangers into you house with only an equally strange realtor for a chaperon.

If you’ve done a good job staging your house, you may find that potential buyers feel comfortable enough to poke through your closets and cabinets. Even if you haven’t, some people are just nosey. A good rule of thumb? If you don’t want it seen or potentially taken, best to tuck it away somewhere safe.

source: totalmortgage.com

Know the Difference: Realtors, Real Estate Agents and Brokers

Real estate agents, real estate brokers, and realtors. What’s the difference? They all sell property, right? They’re all collecting commissions, and they all know how to negotiate deals. Why bother learning what the difference is? It’s sort of like a red house vs a blue house. They’re both houses, right? Not so fast. There are actually some key differences between all three of these designations. Knowing them might mean the difference between selling your home and keeping it for another year.

What An Agent Does

An agent is a real estate professional that works on your behalf to find you the right home. He negotiates for a price that you should be happy with, and he does not chase sales for commissions. Even though he does earn a commission on every sale, he has a fiduciary duty to make sure that you’re getting the home you need and deserve. He has a responsibility to you, the consumer.

That doesn’t mean that you shouldn’t hire another independent inspector to check out the home – even when you’re working with an agent from trusted sources, like Agent Harvest. Having a second opinion can confirm what the agent is telling you.

What A Broker Does

A broker is a real estate professional that usually has more experience. He is a senior agent with additional education and training under his belt. He’s also probably in a more managerial role at a real estate brokerage.

He may also be a specialist when it comes to certain types of property. However, real estate agents and real estate brokers are sometimes interchangeable, depending on where you live in the country. If you’re unsure whether there’s a difference where you live, ask. It’s the easiest way to clarify any misunderstanding, and it might just make the difference in how much you get for your home.

For example, if you have the opportunity to work with a broker, a senior agent, you might ge better service than from an agent (someone younger in the business). If your broker doesn’t really specialize in the types of home that you have, or the area where you live, then a broker might mean the difference between selling the house quickly and staying where you are for another year.

That’s a serious consideration, especially if you have to move because of a job relocation or you just need to sell the home to downsize or pay off debts.

What Realtors Do

Realtors differ from real estate agents and brokers in that they are members of the National Association of Realtors. This is an independent organization of real estate agents, brokers, and other real estate professionals.

It’s not so much that these people are radically different in what they do. It’s more that they may have more extensive training and they are bound by a specific code of ethics and a fiduciary duty that brokers might not have. Even agents aren’t held to the same standards as Realtors. So, choose wisely, and regardless of who you choose, always do your research. Just because someone has the education and training, or even experience, doesn’t mean they will be a good fit, personality-wise.

Phillip Waterman’s career in real estate spans decades. With a keen eye and clear manner, he enjoys writing about navigating the real estate market for today’s buyers and sellers.

source: 20smoney.com