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The Washington Post: The Pitfalls to Selling a Home Without an Agent

January 21st, 2015

Selling a home without an agent can save money — but there are pitfalls
By: Adam Vogt (The Washington Post, January 21, 2015)

In real estate as in life, we are all looking for a deal. Sellers want the highest possible price for the sale of their properties and buyers want the best possible deal on a new home or investment property.

Unfortunately, as anyone who has sought a free lunch knows, that meal, discount, or bargain is often not quite what it seems. This is particularly applicable in the case of for-sale-by-owner properties, also knows as FSBOs.

As an example, I recently met with a friend (who happens to be a financial adviser) who told me that he had bought and sold enough properties in his life that he was going to sell a rental property he owns this spring. Dumbfounded, I wondered at what point he would try out for the Washington Nationals having thrown a baseball on many occasions. That is not to say that there aren’t certain situations in which an individual can successfully represent himself or herself, but there is a reason we hire professionals to represent us.

Here are the key reasons to hire an agent when selling a property:

• An agent will ensure that the widest possible audience will know about the listing and be able to tour the property. The mere act of trying to tour a FSBO is often a complicated task. Typically, a buyer’s agent has to call the owner, who then has to meet the agent and any potential buyers at the property at an agreed upon time.

By coordinating these logistics, a seller may be drastically limiting the pool of potential buyers. Indeed, many agents prefer not to bring their clients to FSBOs because of the many hassles with showing the place, negotiating a commission and completing a sale. That is not to mention the fact that many FSBOs don’t even show up on the major real estate search Web sites, further limiting the pool of potential buyers.

• A seller’s time is valuable. Unless you are retired, who has the time to host open houses, arrange showings, follow up with potential buyers and review offers? How many non-agents have the expertise to ensure that a contract complies with local and federal regulations? When contracts were four pages in the 1970s, it was undoubtedly much easier. However, today’s contracts are typically 40-plus pages.

• Impartial advice is essential. Have you ever gone to a friend’s home who was a real dog lover? Have you noticed that some dog lovers seem to have lost their sense of smell? Well, it’s important to have an agent who is willing to help a seller not shoot himself or herself in the proverbial foot.

Homes are personal spaces that often need a few touches by an impartial adviser to help them appeal to as wide an audience as possible. An agent should be brought in and empowered to recommend staging or sprucing up a place in different ways that can dramatically boost the property’s value. Lastly, as a seller is working through the negotiating process, having a less emotional adviser is key to moving forward. Even if the outcome is not quite what a seller desires, it is helpful to have the involvement of a party who is less emotionally attached to the outcome.

• The market is always right. A property will only sell at a price that a buyer is willing to pay. So, if a buyer knows that the seller is not paying a commission to a listing agent, he or she is going to want the sale price reduced accordingly. And if the buyer is not using an agent, he or she will want the price to be reduced even further.

Nonetheless, if a seller wants to take on the task of selling a home directly, here are the steps involved:

• Before you go on the market, bring in a friend or family member with an eye for interior and exterior design and listen to him or her.

• Make the place as accessible as possible by using a combination lock box and setting lengthy showing hours, especially during the first week on the market.

• Ensure that a qualified title attorney reviews any agreed-upon contracts to make sure you are not left vulnerable by any provisions.

Doing it yourself can be quite enjoyable when it comes to certain activities. If you choose to do it with selling real estate, be very careful and make sure that you don’t take actions that hurt your chances of selling for the best possible price.

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