Selling Your Home Yourself May End Up Costing You
It may seem tempting, to try and save money on commission, to sell your home yourself but it’s important to consider all the factors. In a lot of cases, sellers who choose to go this route do not come out ahead so let’s look at why.
What are You Really Saving?
- Let’s use as an example a 5% commission of the sale price of your home that you may pay to a full service real estate company for their services.
- When you list your home for sale with a Real Estate Professional, what you may not know is that half of that 5% commission i.e. 2.5% is paid to the Agent who is representing the Buyer.
- A question you need to ask yourself is if you plan to sell your home privately will you be cooperating with agents that are working with buyers and what commission fee are you willing to pay them for bringing a buyer?
- If the answer is Yes you will co-operate and the fee that you are willing to pay a buyer agent is 2.5%, 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 homeowner, and you’ve also taken on the job of being the Listing Salesperson. But you lack access to important MLS data, such as 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, as well as the recent sale prices of comparable homes.
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 or increase the listing price due to the high demand for housing, your equity may have become severely compromised. A Real Estate Professional 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 3000 plus members of the Ottawa Real Estate Board who are representing the best interests of their Buyers. Real Estate Professionals are professional negotiators who bring lots of experience to the table; … are you ready for that?
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 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). Will your home’s listing be seen?
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 sale 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? Also, this will add costs to your lawyer’s bill and may end up costing you more than you anticipated in the long run.
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 Professionals 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.
The buyer is not only viewing your home, they usually have a number of other homes to view and may never end up viewing your home.
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.
Real Estate Professional Gets Paid only on the Successful Completion of the Transaction
No monies are paid up front for a real estate agent’s services. The Real Estate Professional only gets compensated once the transaction has closed. In contrast, FSBO companies require you to pay all the listing fees up front, regardless of whether or not your home sells. As a consumer it is important to Note that there is no such thing as No Commission …whether you are paying a Flat Fee for Service up front before your home sells and a 2.5% commission to the brokerage that brings you a Buyer… they are all commissions!
The question that needs to be asked however, is if a Flat Fee is paid up front to the Real Estate Brokerage, what incentive or motivation does the agent have in getting the Seller the highest sale price possible as the agent has already been paid??? Could your hard earned equity be compromised?
Many Pitfalls & Disadvantages
There are so many issues that arise during the marketing of your home, at offer presentation and prior to closing and your Royal LePage Team Realty Sales Representative has a wealth of knowledge 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!