Common Myths about Selling Your Own Home or Using a Discount Brokerage Firm
Today, sellers can find a number of “For Sale by Owner” limited services on the web. Such firms tout the benefits to owners of selling a home on their own, but can also contain a lot of incomplete and/or missing information that may lead buyers down the wrong path.
For most people, buying or selling a home is an important life event—one with long-term implications on finances and family happiness. With so much on the line, sellers need to be able to separate myth from reality so they can make a choice that is right for them.
Myth: “For Sale by Owner” sales mean less stress for owners because there is more flexibility.
Reality: Selling your own home may offer more flexibility when it comes to scheduling showings, but that doesn’t necessarily equate to less stress.
Sellers still need to schedule showings, clean their homes, and prepare for showings—regardless of who is actually showing the property. Additionally, since showing the home may not even be the most stressful part of the process, going the “For Sale by Owner” route may actually be even more stressful.
Myth: Selling your own home is easy for everyone.
Reality: Selling a home can be easy for someone who understands the process, the real estate business, and the legal implications of selling property.
The average seller does not realize the intricacies of the process because experienced professionals make it look easy. But there are many logistical and legal decisions a “For Sale by Owner” seller will have to make on his/her own.
- Logistically, how will you determine if a buyer is legitimate and can get the financing needed? How will you schedule and successfully advertise open houses? How will you advertise your home? Do you know which sites get the most traffic? Can you design and/or post a video?
- Legally, what are you obligated to do as the seller in a real estate transaction? What paperwork needs to be completed? How will you successfully negotiate not only the price but also the details and terms of the contract, including who is going to pay for closing costs and inspections? Who orders and pays for title insurance?
Almost 80% of people who try to sell their home on their own eventually turn to a professional real estate agent for help. Dealing with a home sale and moving are challenging enough, without having to understand the process and make logistic and legal decisions all on your own.
Myth: You’re the ideal agent to show and sell your own home. You know it best.
Reality: While you do know your house and may love to show it to potential buyers, that isn’t the best way to entice offers.
Potential buyers do NOT like having homeowners present during viewings. Buyers feel uncomfortable discussing the pros and cons of the house in front of the owners, so they tend not to look as much.
Most homeowners are also often biased about the home’s condition and value, which can lead to difficult negotiations. REALTORS® know the market, are trained negotiators, and can successfully remain unemotional even while advocating for the seller during the negotiation process.
Myth: You lose control when you hire a REALTOR®.
Reality: Sellers maintain control no matter what, but a REALTOR® can offer additional experience and expertise.
Discount brokers know that many people want to be in charge of their own transactions, so they use that desire to tempt sellers with the “For Sale by Owner” strategy. The truth is, though, that a seller is in charge either way.
When you hire a professional REALTOR®, you have final say in what your home is priced at, when your house is shown, what you are willing to accept in an offer, as well as all other aspects of the home sale process. The difference is that a REALTOR® has the means and expertise to properly guide you in those decisions and is a great help in marketing the home.
Myth: The “For Sale by Owner” strategy will save sellers thousands.
Reality: Studies have shown that REALTORS® quite often net sellers more than if they sold a home on their own. REALTORS® are industry experts and know how to price, market, and negotiate in ways that will maximize results for sellers.
Discount brokers may advertise that if you sell your own home, you won’t have to pay commission to a REALTOR®. However, sellers often don’t realize that the majority of the time, a REALTOR® brings the buyer to the table.
If a buyer’s agent submits an offer on behalf of a client, the agent will request to be paid. In a normal transaction, sellers pay a percent of the sale, and that amount is divided between the listing broker/REALTOR® and the buyer’s broker/REALTOR®. If you decide to sell your home without using a REALTOR®, a buyer’s broker/REALTOR® will still need to be paid. In fact, discount brokers who charge a fee to put you on the local multiple listing service know that to be on the site, you are required to offer compensation to a buyer’s broker/agent.
Agencies that advertise “For Sale by Owner” will save sellers thousands of dollars may not be conveying the whole truth.
Myth: REALTORS® earn commission just to “show a home.”
Reality: To say that REALTORS® do nothing more than “show a home” minimizes the work that they do and discounts the expertise they bring to the table.
Discount brokerage firms often minimize the value of using a REALTOR®. For instance, a firm may suggest that owners should calculate six percent of what they think is the value of their property, and then ask themselves if it is worth that six percent to pay someone to show the home.
However, REALTORS® are trained professionals who bring a lot of value to the process. They have a limited right to practice law. They represent sellers and protect their interests, making sure their clients get the best price and terms, while also minimizing the chance of any liability or legal issues that may arise from the transaction.
REALTORS® also work very hard. They give up nights and weekends to accommodate showings and open houses. They have significant expenses, including marketing, insurance, education, licensing, and association fees. As professionals, they deserve to be paid accordingly. Would you ever go to court without a lawyer if there was $100,000 or more at stake? Probably not. Then why would you sell your home without proper representation?
Myth: Anyone can market their own home thanks to the internet.
Reality: REALTORS® pay for programs that maximize the number of sites on which a home can be listed, and have the expertise to produce videos and other marketing tools to best sell a home.
Part of the value that comes with using a REALTOR® is access to marketing tools and expertise that those outside of the industry do not have. REALTORS® can post listings more quickly and onto more sites than a regular homeowner. Some REALTORS® also create videos of your home and market it on YouTube and other video sites. Buyers are seeking out videos as a search tool more than ever, and YouTube is overwhelmingly the main source.
Brokers’ own sites are also high-traffic tools for local buyers. Most of them are mobile friendly so that the growing number of people who use their mobile devices to search are accommodated. Basically, brokers and REALTORS® have the tools to properly market your home.
Every owner is different, and it is up to each individual to choose the right way to sell his/her home. As a potential seller, you may have the training, skills, or background required to complete this kind of transaction successfully—or, you may already know someone who wants to purchase your home, making the need for marketing or negotiating skills unnecessary.
If you decide to use the “For Sale by Owner” method, don’t get taken in by the myths. Please do your research to make sure you are following state laws and using appropriate forms. If you try and it doesn’t work out, it is never too late to call a professional REALTOR® to assist you.
