You’ve probably heard all of the negatives about trying to sell your home without the help of an agent. In the interest of disclosure, according to NAR 87% of buyers use a real estate agent to buy a home. This has actually increased significantly in the internet age, contrary to concerns that the industry was going to go the way of the travel agent with the advent of The Web.
Having said all that…let’s get started! You might be able to save some or all of your commissions, you might have to earn it though.
First, I would consider partnering with a real estate agent. Interview them, choose one and have a candid conversation with them. Tell them that you are going to try to sell your home on your own and see what they can offer you. Many agents are happy to help with advice, documents, maybe even follow up with people that have seen your home. Tell them that if you aren’t able to do it on your own, you will hire them.
One of your biggest challenges is going to be getting honest feedback from the showings that you do get. Most buyers don’t want to offend you and will say something like “Oh, Yeah! We really like it. I need to talk to my mortgage person, parents, uncle, boss, pet rock, etc and we’ll get back to you straight away.” They walk out the door and never think another thought about your house all the while you think you have a live one. It could have been something small about the house, like the paint color in the bathrooms, it could have been the price, it could have been that they incorrectly think they saw water stains in the basement…You’ll never know. Having an agent in your corner to call them on your behalf and get honest feedback can be a great tool at your disposal. This can benefit them also. If the people that viewed your home aren’t interested in buying it and your Real Estate agent partner gets honest feedback to relay back to you, they can take them on as a buyer for another property.
You should be able to get plenty of exposure through By Owner websites on the internet. People being aware of your house is a challenge, but its not your biggest one. Be ready to show your house at a moments notice. Keep in mind you have no idea who these people are or whether or not they are qualified, but you really don’t have much of a choice. “No, I cant do it right now, Wednesday at 5:30 is better,” is a great way to never hear from a prospective buyer again.
Get used to the fact that almost all of your potential buyers are working with a Real Estate agent that they trust and probably listen to more than you might think. Be prepared to have an agent call you saying that they have a buyer that is interested in your home. This can be a bit tricky, but they may very well be telling the truth. Tell them to email you a 1 party listing agreement with their customers name on it (They can use first names and last initial if it makes them more comfortable) and tell them that you will pay a co-op commission. I would suggest an offering of 2%-3% to be competitive. A common going rate for a co-op sale on professionally marketed listings in Metro Detroit is 3%. It’s not always this number, but often. What you have going for you though is that their buyers probably asked them about your house and they have to agree to your commission in order to get their buyers through and still have a deal. Another advantage for you is that the agent will handle all paperwork, inspections and close the deal.
OMG! The amount of Agents! You are going to get far more agents than buyers knocking on your door, Each one claiming to be the best that ever lived. First off, if they’re so not busy as to be knocking on a stranger’s door who they know is being inundated by Agents, how good can they actually be? Brokers and managers encourage agents, especially new ones or ones that don’t have any business, to work FSBO’s. This is unavoidable. Tell every agent that comes to your door that you offer a commission with a One Party Listing Agreement that only applies to the one party that they may bring through the home. Beyond that, tell them you’ve already selected an agent to list the home if it comes to that.
You’re probably going to have problems with inspection contingencies, interpreting pre-approvals and financing options that come along with buyers, seller concessions and how to negotiate them and especially offers that are contingent on the sale of the buyers’ current home. This is another reason to have a real estate agent partner throughout this process.
I’ve seen people of all education levels, backgrounds, IQ’s and stations in life make the same types of mistakes when trying to sell their home without representation. There is a reason that the Real Estate Agent profession endures. It creates a market, a channel of distribution and attempts to make uniform a process that is anything but. It does this through a simple set of procedures and a collection of documents. That’s it! That’s all the Real Estate Industry is.
The documents you’re going to need are: (The following are links to documents)
Lead Based Paint Disclosure
Addendum to offer to purchase
Finally, secure a title company in advance and have them start the pre-title process and give them a signed payoff authorization that allows them to order a payoff statement from your current lender before closing.