If you are considering selling your home you may be considering the idea of selling it yourself without engaging the services of a licensed real estate agent in the hope of saving money or perhaps simply because you don't see the value or benefit of an agent. While this may sound good on the surface, especially the saving money part, if you take the time to dig in a little deeper to the process you will find that selling a home as a FSBO (For Sale By Owner), without being represented by a real estate agent, is not a good idea and will subject you to risks and potential for problems that, if you were fully informed would have prevented you from even considering doing a FSBO.
Our purpose here is not to scare you into using an agent but instead to help shed light on some of the landmines that await sellers that attempt to sell their home as a FSBO as well as give you some "inside information" on the process so that you can see being represented by a professional real estate agent in the sale of your home definitely brings you value and is worth every dime you will spend.
The problem is that everyone wants the commission. The primary motivating factor for a home buyer to seek out a FSBO is a desire to save the "commission", the same motivation you have for wanting to sell the home on your own. However, you and the buyer can't both have the savings.
Many homeowners not only don't see the flaws that others may see in their homes, but many times can "justify-away" deficiencies or negative aspects of their homes. This is understandable as, to many of us, our houses are much more than just a house, they are a home. We have many wonderful memories of family and friends in the home, and may have a hard time taking an objective look at our home's condition to determine what needs to be done to prepare their home for sale. This is another area where an objective opinion would be a big help. Get someone that is not emotionally attached to your home (and has the guts to tell you to your face what they really think) to walk through your home in the shoes of a prospective buyer and tell you what repairs or improvements you need to make prior to placing your home on the market for sale.
Many FSBO's buy a generic "for-sale" sign, put it in their yard, and wait for the buyers to call. Unfortunately, there is much more involved in getting your home sold than this. While a for-sale sign is one of the better ways of exposing your home to potential buyers, it only exposes your home to your neighbors and those potential buyers that may be driving the area. It is imperative, especially in today's market, that homes for sale are published in the REALTORS® MLS, national real estate sites such as Realor.com as well as other local sites, through social media, etc. When you list your home with MORE, not only is your home listed in the MLS and all the major national real estate sites but also on our Connecting St Louis network of sites and St Louis' favorite local site, StLouisRealEstateSearch.com.
How frustrating is it when, in spite of the fact your for-sale sign says "by appointment only", that, just as you are sitting down to dinner, the door bell rings and you answer to find a prospective buyer wanting to see your home? While most prospective buyers would not normally consider knocking on the door of a home with a real estate company for-sale sign in the yard, the for-sale by owner sign seems to be an invitation to do so. Many sellers find this uncomfortable and inconvenient and may be quick to "shoo" the potential buyer away or tell them to call later. Unfortunately this will most likely result in never seeing the buyer again. As unfair as it may seem to you the seller, buyers today want everything "now" and on their terms...quite frankly there are plenty of homes available for sale so it probably won't be hard for them to find an accommodating seller. When professional agents are involved, this type of situation is avoided and appointments to show your home are properly scheduled which makes it not only more convenient for you but safer too.
If you list your home with a good real estate agent, the agent will advise you that, during showings, you need to not be at home. This is done to make prospective buyers feel comfortable and give them the freedom to look around at your house without feeling like they are being intrusive. If you do a FSBO this is basically impossible so you will need to be present during showings. Even if you would want to give the buyer some privacy, you may be hesitant to give a buyer unfettered access to your house without supervision.
When it comes time to negotiate with an interested purchaser many sellers blow it when doing it on their own. The seller and the buyer are looking at the same "deal" quite differently. The seller sees their home as the palace they are offering at a great price in great condition and the buyer sees it as a house that is not decorated the way they like, needs some improvement and is over-priced. This is why no seller ever lists their home at the price that is the absolute minimum they will accept and why a buyer rarely offers the full price, particularly in challenging markets.
This is why negotiating is a big part of any real estate transaction. This is another area where, if it can be handled by an objective third-party it goes much smoother but FSBO's are usually forced to deal directly with the buyer, or worse-yet, the buyers agent directly (this is worse because they are represented by a professional and the seller is not which puts them at a disadvantage). Sellers tend to take the buyer's offer's, and their justification for an offer at less than asking price, personal and often let emotions blow up the negotiations.
There was a time when a simple handshake sealed a deal, and today there are many transactions still done in that manner, but when it comes to real estate that is not the way to go. For a variety of reasons, all aspects of the sale of a house should be handled in writing and this includes the negotiations. Too frequently FSBO sellers will negotiate the sale of their homes verbally and think they have reached "an agreement" only to find the deal blows up when it is reduced to writing because of terms or conditions in the contract that either are new, or were not discussed during negotiations. Not to mention if you want a legally-binding contract that you sue the buyer to enforce it must be in writing according to the Statute of Frauds.
You will find a variety of sources for pre-printed sale contracts online that you can consider using or you can hire an attorney to prepare the documents but, in either event, the buyer is probably going to have concerns about using your documents, particularly if your attorney prepared them. If your home was listed with a REALTOR® then you transaction would be handled utilizing forms prepared by the St. Louis Association of REALTORS® which are revised and updated regularly to keep up with changing laws and practices, are fair and are trusted by thousands of home buyers and sellers each and every year.
Sellers are rarely aware of the existence of an EPA rule which requires ALL sellers of homes built before 1978 to disclose the existence of lead-based paint in existence in the structure as well as other requirements. Or, if seller's are aware of the law they don't think it applies to them when they are selling their own home but that is not correct. Failure to comply with this rule can be costly also with civil penalties of up to $11,0000 plus three times the actual damages a person suffered as a result of the violation.
The requirements include (for homes built prior to 1978):
It's exciting when, trying to sell your home, someone comes forward and says they want to buy it. It's even more exciting when you have been able successfully negotiate the terms of the deal and reach an agreement with the buyer. What next? Well, unless the buyer is paying cash (which is highly unlikely) the buyer is going to need a loan to complete the purchase of your home.
Seller's can waste weeks, sometimes even months, waiting for an un-qualified, or maybe un-prepared, buyer to get their financing. Many times, particularly when a buyer is working with an agent, the buyer will visit a lender first and get "pre-approved" for their financing. While this is an excellent practice and Seller's should not enter into a contract to sell their home without some assurance the buyer is qualified and can get financing, many "pre-approvals" literally are not worth the paper they are written on. Read the letter and see what the conditions the approval is subject to and then you will have a much better idea of how thoroughly the lender evaluated the buyer. For example, it's not uncommon to see that the letter is subject to "verification of income and debts, buyer's credit meeting normal underwriting guidelines, verification of employment, etc.". What this tells you is the buyer has a long way to go before actually being approved for a loan.
If your home was listed by us, we would take steps to assure that the buyer is a qualified and able buyer so you don't waste your time.
Why not? Because the Federal Fair Housing Laws say so! Granted, homeowners are not typically real estate professionals and therefore may not be aware of the laws that affect the sale of a home, but if a Seller is going to act like a real estate agent by selling their own home, then they need to educate themselves on laws that affect how they sell their home. This includes Federal Fair Housing laws. It is actually faily easy to violate the law pretty innocently but when it comes to Fair Housing Laws "good intentions" or "ignorance of the law" doesn't get you very far. The most common violation of Fair Housing Laws by FSBO's is probably in their ads. Seller's may not give a thought to such statements in ads as "great for empty nesters", "In St. Thomas Parish", "nice yard for kids", "executive home" etc. but these could all be violations of the fair housing laws.
We know selling your home sounds like a daunting task, particularly in this market, but if you will allow us, our professionals at MORE, REALTORS can show you just how easy we can make it for you from start to finish! We know the St. Louis market, we know the real estate business and have some of the most knowledgeable and experienced brokers and agents in St. Louis in our firm.