Selling Home
Selling Without a
Broker
As
expected, real estate brokers are the first to tell you that the real
estate market is too complicated. They vigorously fight the notion that
you can sell your house on your own.
They will argue that only they know
true local home values and it's impossible for you to set a proper price.
Besides real estate laws are complex. They insist you need someone to
"screen" potential buyers for you - protecting both your time and your
safety.
Some sellers believe otherwise.
About 13% of all home sellers go solo, according to the National
Association of Realtors. The advantage is that selling on your own is much
cheaper. You could save around 6% in broker fees. Broker fees will vary.
The savings could be as high as 10%, especially for hard-to-sell
properties. In highly competitive markets, brokers will cut their
commissions, so the savings could be 5% or lower. It will take more effort
on your part, but on a pricey home it might be well worth the extra work.
Thinking about selling your home on
your own? Here are some helpful things you need to know if you're going to
act as your own broker:
Attracting a
buyer
Price. Price. Price. We can't say it
enough; you must price your house properly. Charge too little and you'll
sell yourself short and walk away unsatisfied. Overprice and you'll "go
stale," as industry insiders like to put it. The longer your house stays
on the market the more buyers become suspicious that something's
dreadfully wrong or that you're simply an unreasonable person.
How do you determine the perfect
price? Have a independent appraiser give you a recommended price. It will
cost you anywhere from $250 to $500 for the service. The appraiser will
have information on similar home sales in your market at their fingertips.
With access tax-record databases and
multiple-listing information, an appraiser can better assess your home. An
appraiser will personally inspect your house to take into account the
mother-in-law apartment or the newly finished screened in deck.
When you're ready to advertise your
home, get as much exposure as you can. Because of your choice to sell your
house without a broker, you won't be included in the multiple-listing
service (MLS) database. The MLS is where agents pool their real-estate
listings to stimulate sales. So you need to generate a buzz on your own.
Post your listing in the classified ads of all your local papers, don't
forget shoppers and weekly alternative publications. Check to see if your
area has a freebie real-estate newspaper centered on people selling their
own homes. Consider listing your property online, as well.
Use your ad to really sell your home. List all the
basics such as location, price and number of bedrooms, but also include
your favorite features and unique selling points such as a new deck, a
nearby golf course or lake views. Really great ads have some urgency to
them. Include key words that catch a reader such as, "seller motivated" or
"priced below market." Buyers are particularly attracted to ads that offer
owner financing or help with closing costs.
Get a nice sign for your front yard.
You get what you pay for and the cheap metal jobs from Lowes look cheap.
Find a large wooden model at a local sign company. It might cost you
around $75, but people on the road are an important group to market to.
Besides, most people who read your classified ad will want to drive by
before they commit to a showing. To help cut down on the number of calls
unqualified buyers, try putting the asking price on your sign.
Another way to market your home is
through the original form of advertising: word of mouth. Tell everyone you
know that you are selling your home. Talk it up work, at the hairdresser
and at the grocery. A huge number of people make their deals with an
acquaintance. Mark and Sarah Anderson of Montgomery, Ala., for example,
sold their four-bedroom, two-bath home to a friend of a relative who'd
been looking in the neighborhood for months. Meanwhile, another house on
the same street went unsold for weeks and was finally taken off the
market.
"The common relationship really
helped because we found out pretty easily that we had a serious buyer,"
says Mark Anderson. "Before people rush out to get a real estate agent,
they should definitely talk to people they know."
It goes without saying, be aware
that Independent sellers must comply with the fair-housing laws designed
to protect buyers from being discriminated against on account of race,
religion, sex or national origin.
Brokers will call
Once you put your home on the
market, be ready for an onslaught of calls from agents trying to convince
you to list your house with them. They may be adamant they've got a hot
prospect that's just dying to see your property. Maybe they do and maybe
they don't.
Don't forget: If you allow an agent
to show your home, you may be required to pay a commission, even though
you haven't signed a listing agreement.
Avoid confusion and have your
real-estate attorney draw up a one time only open-listing agreement. This
document should clearly state that you are willing to pay a fee if the
house is sold to a specific buyer that the agent is referring to you, but
that you don't have an exclusive agreement with the agent. This fee can
vary and should be included in the open-listing agreement. As far as the
fee goes, an agent will usually request half the usual commission paid in
that area. Negotiate. The agent will often settle for as little as 1% or
2% of the purchase price.
Closing the sale
Once you have a buyer it's time for the paperwork.
The first thing document you need is a contract of sale. It will list the
price and any conditions you and a buyer have agreed on, as well as the
closing date. The buyer will need some time to get a mortgage. The closing
is usually set within Six to eight weeks. It may be a signal that someone
may have trouble
obtaining financing if he or she asks for
more time. It's in your best interest to have a good real-estate attorney
to help you draw up the contract of sale. There are published handbooks
available that include copies of realtor agreements and forms, but laws
and regulations vary so widely by county that these generic agreements
often have to be rewritten at closing.
The largest issue with closing is in
the financing. The ability of a buyer to qualify can throw off a deal at
the last minute. Whether or not your buyer can get financing is out of
your hands and no amount of prescreening can guarantee a smooth closing.
There are a few ways to help reduce the chance of a closing going bad. Ask
for money in earnest.
Many sellers require at least 10% of
the purchase price in escrow until closing.
Sometimes a sizable deposit will
quickly weed out the wishful thinkers leaving you will serious buyers.
All these details may be
overwhelming. Keep in mind, with a little planning, the returns are worth
the investment of your time and effort. After all, saving thousands of
dollars by not using an agent is never a bad deal.
