When you know it’s time to sell your home you may consider selling it by yourself instead of bringing in a support team. Once the tough decision is behind you to move, thoughts often quickly turn to bottom lines. What money will you have after this sale to purchase your next home? Will it be enough to make the move? Will you have to compromise? You might decide that the easiest way to save money is to do it yourself. While this may be true it usually doesn’t turn out that way. You might find out that you really didn’t understand the full cost of the selling process. Take a little more time up front to appreciate what you are heading into and make an informed decision about the true costs of selling your home.
I have always enjoyed real estate and was fortunate to find a property that I could afford in my 20s. When it was obvious that it was time to move I decided to sell it myself. Honestly I had no idea what it cost to hire a realtor or any professional at that point. I had purchased the land, about five years prior, so like many young adults I assumed I knew the process. At that point in our lives we were also our own auto mechanics and plumbers and about anything else we needed. We definitely weren’t experts at any of the tasks. But we were young, inexperienced, low on financial resources and we didn’t have too much to lose.
Now, several decades later, I know that we might have had more to lose but we didn’t know what we were missing. True costs are often hidden and not apparent. I suppose if you don’t know what you don’t have, does it really matter? It certainly can make a difference in the long run. The important factor is your bottom line and how to maximize that. Here’s an example.
Someone I knew wanted to sell their home by themselves in the hopes of saving money. They cleaned their home, placed some ads in the paper and put a sign in the front yard with their phone number written on it. Soon they received some calls from prospective buyers. Soon after they called me. I always know when I pick up the phone and someone says they have a quick question, that while the question may be short, the answer will probably take a while. Real estate questions are usually not simple. These sellers found out, there was a lot more time involved and even more unknown costs than they were aware of. What also became rapidly apparent was that most buyers today have representatives.
What happened was that a buyer wanted to see their home and they had a real estate agent that was working with them. Buyer’s agents are what the name implies. They represent a buyer purchasing a property. Sellers often pay the costs for buyer’s representatives either directly or indirectly. Either way, this agent only represents the buyer. The seller has no representation unless they hire someone else. If a seller is well versed in the selling process, they may do OK. A seller can find themselves at a disadvantage when it comes to negotiations and tracking the process which involves costs along the way. It is similar to doing your taxes on April 14 without the advantage of a qualified accountant. Or perhaps like trying to fix your car when the engine light comes on. At that point we all wish we had gone in for a visit about two months earlier. And we realize that we need a lot more training because we couldn’t anticipate things we didn’t know about.
Commonly in trying to sell a home on their own, owners will say that they’ll try it first and if it doesn’t work, they’ll go to a professional. This approach may work out in some situations but in real estate, there are true costs involved in trying it on their own. Sellers have to understand advertising and pay for expensive ads. Signs are necessary to alert buyers that their home is for sale. Once the phone starts ringing, an entire litany of questions, answers and conversations will ensue. Quickly a seller learns that huge amounts of time involve discussions about owner financing, lease to purchase, occupying prior to sale, discount points and appraisals. That will be just the beginning. Prospective buyers, callers and representatives will call along with advertisers, lenders and the all famous “looky loos.” If a seller is retired, enjoys a wide range of dialogues and doesn’t become frustrated quickly, they may get to the next step.
Sellers typically have a terrible time of separating their personal feelings about their home and the business of selling. Sellers feel insulted when offers finally come in and they are low. Sellers read inspection reports concerning the home and get defensive. Negotiations become cumbersome when the buyer has a representative and the seller none. It can get even tougher when contracts need to be drawn up and the seller doesn’t know how to move forward. When I was in my 20s and selling my home, the purchase contract was only one page long. The world has become a much more complicated place since then. Costs can pile on quickly when considering paying for a buyer's agent, advertising, time away from work, time on market, missing out on a good deal while trying to sell, poor negotiations without representation, and misunderstanding fees and closing costs. Sometimes, even worse, after closing the buyer may find something about the sale or home they are discontent about. This could eventually lead to a lawsuit that the seller will have to deal with for a long time with considerable expenses and no insurance to protect them.
Quite often, after this initial effort, the seller decides it’s time to hire a professional. They chalk up the loss in time and expenses to an effort that might have paid off but didn’t. Buyers and their agents watch the market closely. A property loses its excitement and first time appeal if it’s already been for sale. Buyers want to be the first ones to see a home. Serious buyers probably moved on to another property. They may suspect something is wrong if it’s been lingering on the market for a long period. As time marches on, the price won’t look as attractive. Statistics show that the home will probably sell for less in the long run if handled in this manner.
There are times that we all wish we could go back and change a decision or course of action. It’s not too hard or a catastrophic if you try to sell your car. You may spend a lot of time and in the end sell for less because you feel sorry for a young, cash poor couple. The loss may not feel as bad and you can rationalize the loss that way. But a home is the largest sale that most of us will ever make. There are twists and turns along the way that can cost big money. You may be content with the bottom line and a bit tired from your efforts, after working on your own. Whether you are selling on your own or using a professional understand all your true costs and then move forward with the approach that suits you best.
Joy Earls is a Real Estate Broker/Owner of Joy Earls Real Estate. She truly enjoys your stories, calls and emails: You can find her at: firstname.lastname@example.org or 406-531-9811.