Home sellers: What you need to know before you decide to sell your house on your own

If you are a homeowner who is concerned about what it will cost you to sell your house, you may have considered selling your house on your own.

T.V. and radio commercials advertise to homeowners to save money.  They want you to use their marketing and advertising systems to sell your house without having the expense of a real estate agent. Have you been tempted by these ads?

I spoke with three Connect2Agent members : Shirley Elmore in Clearwater, Florida, Cathy Maier in Oak Lawn, Illinois, and Magnus Kallner in Scotch Plains, New Jersey, about homeowners who choose to sell their house on their own.

I asked them, "What is the biggest misconception for sellers who choose to sell their house For Sale By Owner?" They all agreed that sellers who choose to sell their house on their own believe:

• They will make more money--It is difficult for a homeowner to make more money when they are not experts on the local real estate market.
• They will be successful in finding a buyer for their house--It is difficult for a homeowner to draw home buyers to their house when they do not network with other real estate agents.

What kind of obstacles can you face when you decide to forgo a REALTOR and sell your house on your own? The Connect2Agent members I interviewed believe some of the biggest obstacles are:

Finding the right buyers

It can be difficult to get a qualified home buyer to make an offer on your house.

Real estate agents can check with the buyer's real estate lender at the time of the offer to confirm that the buyer has been pre-approved for a mortgage.  They can also keep in contact with the buyer's real estate agent and the buyer's lender to make sure that the financing process is proceeding smoothly.

Maier said that most homeowners don't have the mechanisms in place to get a good number of home buyers to view their houses.  A seller's real estate agent will network with buyers' real estate agents to get showings on their seller's house.

Pricing your house to sell 

A real estate agent can prepare a market analysis of your house to help you determine the right selling price.  Sometimes a homeowner will have a market analysis prepared by a real estate agent, but will decide they can get more for their house and end up listing it on their own, Maier shared. 

Overpricing your house can cost you marketing time and can cause potential home buyers to overlook your house in their home search.  Maier said on the flip side, some homeowners who sell their house on their own will undervalue their house. They end up selling their house, but they have lost money because they priced their house incorrectly.

Most people who sell their house on their own will have their house listed for an average of 4-6 months on the market before they get an offer to purchase, Elmore informed me.  She said that it is critical in this market for a seller to price their house to sell because of the high inventory of houses on the market that are similar in style.

Kallner shared a story of a home buyer he represented who made an offer to purchase on a For Sale By Owner house. The final negotiation was a few thousand dollars apart and was not accepted by the seller. Kallner received a phone call from the seller a month later.  The seller had accepted an offer for $15,000 less and wanted to break his contract with the home buyer and renegotiate with Kallner's clients.

Marketing your house

Homeowners who list their house For Sale By Owner miss out on marketing tools that agents have at their disposal. Many real estate agents market sellers' properties on multiple Internet sites. Some real estate agents advertise their sellers' listings in highly circulated real estate publications to attract home buyers. 

Real estate agents hold open houses where home buyers can view the house during a certain time of day. They also advertise their listings to other real estate agents in the Multiple Listing Service. They have other agents tour their clients' homes on real estate broker's tours.

If you choose to advertise your house on your own, you need to be flexible and have your house accessible for showings to prospective home buyers. Elmore said that home buyers are looking for houses in pristine condition. They also might perceive that because you are listing the house on your own without the use of a real estate agent, you will be more flexible on pricing.

Research before you make a decision to forgo professional assistance

If you are considering listing your house on your own, you might want to consider the following statistics from the National Association of REALTORS, which state that "...the typical FSBO home sold for $187,200 compared to $247,000 for agent-assisted home sales." 

According to their report, it is difficult for some homeowners to:

• Get the right price for their house.
• Understand the paperwork in the sales process.
• Prepare their house for sale.
• Attract potential home buyers to their house.
• Have enough time to devote to the sale of their house.

If you want to sell your house, contact and interview a few local real estate agents in your area. Be honest about what you feel your house is worth and what your financial needs are. Ask them what they can do to sell your house that you can't do on your own. Be an informed home seller--then make your decision.

Posted by Rebecca D. Levinson