Demand is up, supply is down, Spokane is a seller’s market and the time’s right for homeowners who want to sell. That may inspire some to hitch up their shirtsleeves and pound that “For Sale By Owner” sign into their lawns.
Selling your home without the help of a real estate agent may not seem like a bad idea, especially considering they typically take 5% to 7% of the sale price as a fee. With the median home sale price hovering around $250,000, that can equate to $12,500 to $17,500.
Jim Grapes, who owns Lilac City Real Estate with his daughter, Hannah Kotsala, said there are some potential benefits to selling a home on your own. But as a Realtor, he doesn’t recommend it.
“Most Realtors have years of experience, knowing the markets, knowing the neighborhoods,” said Grape, adding that people who sell on their own make mistakes that a real estate agent would easily avoid. “They pinch pennies and they often lose money. They price it too high, and oftentimes the house gets stale and then it’s harder to sell it. You may save a little on commission and lose a lot on the sale price.”
Still, the option is out there. As Grape noted on his company’s website in the article “Should You Sell Your Home By Yourself Or Use A Realtor,” selling your own home takes time and patience, and may not be worth the effort for most people. But done well, it could save some money.
Here are five steps to selling a home without a real estate agent.
Find the right price. Homeowners may have invested blood, sweat and tears, and plowed an immeasurable amount of sentimental value into their houses, but none of that matters. What does matter is the comparable homes sales in the neighborhood. How are homes in your neighborhood selling? How do those homes compare to yours?
Listing the home at a competitive price is very important, but it’s tough to find that Goldilocks dollar figure. Overpricing a home by $10,000 can make it sit on the market for too long and ultimately make it sell for less than you originally wanted. Too low, and you’ve cheated yourself out of profit. The goal is to sell, so be realistic.
List the house online. If you can, get your home on the Multiple Listing Service. Access to this service is available only to licensed Realtors, but there is a way to get your home on it for a few hundred dollars. It’s called a “flat fee MLS listing.” Basically, you’ll pay a real estate broker a one-time fee to put your house on the listing, which will then populate other, public real estate websites like Zillow, Redfin and Realtor.com and get it in front of numerous buyers.
Market the house. Put up “For Sale” signs in the front yard. Put it on Craigslist and in newspaper classifieds. Create professional-looking brochures, which can be done with simple word-processing software such as Microsoft Word or Pages, or with user-friendly desktop publishing software such as Lucidpress or Canva. Grab a few brochures to emulate and be sure to include pertinent information about the house, like house size, lot size, tax data, the year it was built and the number of bedrooms and bathrooms. If you’re really ambitious, build a website on Squarespace or GoDaddy.
Consider hiring a professional photographer to take photos for your marketing materials. A 2013 Redfin study found that homes listed with professional DSLR photos sold for $3,400 to $11,200 above those that had pictures taken by amateurs.
Hold an open house. Give your house a deep clean and hide all your keepsakes and personal items. Buyers can be picky and will look for reasons to make a low offer. Don’t let your knickknacks be that reason. On the morning of the open house, put signs around the neighborhood letting everyone know where the home is and the hours of the showing. Have food and drink to share, put out brochures and be ready to answer questions.
Some home sellers can go beyond the open house and allow real estate agents to show their home to their clients. Put a spare key in a lock box and be ready to confirm the identities of real estate agents who call and want to show the house.
Wait for an offer and be ready to negotiate. Typically, a correctly priced home will take 30 to 45 days to sell. Accepting an offer is done through contract. Without a real estate agent, a real estate attorney will likely be necessary to take care of the legal details and fine print in the contract and other paperwork. You’ll also likely need to hire an escrow or title company to take care of the closing process.
It’s a hefty list, and easier said than done. The process is complex with a steep learning curve. As noted by Grape, with Lilac City Real Estate, the savings from avoiding a real estate agent’s fee is quickly chipped away. So is a seller’s peace of mind.
“There are still a lot of expenses. Excise tax, escrow fees. Sales tax on the title insurance,” he said. “Stuff you can’t escape from.”
He also said there are strict rules on what home sellers must disclose to buyers – rules that Realtors know well, thanks to the aid of their local and state associations and the lawyers who work for them. Failure to comply with these rules is often enforced by way of a lawsuit.
“If you’re not worried about a lawsuit and you trust people, you won’t think a Realtor is worth their money,” Grape said. “If you’re an expert marketer, and you’re a ‘For Sale by Owner,’ and you can get it all over the internet and do all of the things that Realtors do in the marketing, then good for you.”
Otherwise, hiring a professional to do the heavy lifting is worth the thousands of dollars, Grape said, adding that people selling on their own do have one thing going for them.
“That’s the only advantage that a person would have: there’s more buyers than there are sellers willing to sell,” he said. “If there’s any advantage, that’s it.”
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