ARE YOU CONSIDERING SELLING YOUR HOME PRIVATELY?

In the past few years, many potential home sellers have contemplated selling their home themselves to maximize their profits. This may seem like a practical option in today’s vibrant market. However, the pros and cons of this process should be evaluated carefully before deciding on the best course of action.

The primary benefit of selling your home without a realtor is the broker or agent fees that are averted. Depending on the fee structure and price of the home, this could translate into significant dollars. This certainly can be an attractive option. However, selling your home is not as simple of a process as it may appear.

Last year, approximately fifty percent of the for sale by owners (FSBOs) said they would hire a professional next time, and thirty percent said they were unhappy with the results they achieved! Why?

Many FSBOs felt that the time involvement, the paperwork and the everyday responsibilities were not worth the real estate commissions saved. Many others felt that the financial savings were also a disappointment, as the many up front fees eroded their perceived profits. These fees included monies paid to consultants, inspectors, appraisers and marketing/advertising costs.

Interestingly, studies demonstrate that many potential buyers wanted the commission saving to be passed on to them. In essence, the real estate fees savings in these instances were not retained by the seller.
It is important to recognize that selling a home requires a very comprehensive understanding of the real estate market. As I have discussed in many previous articles, if the property is priced too high it becomes a “stale” listing and actively will be limited. If it is priced too low the seller runs the risk of costing themselves significant money. In many instances, underpricing the property can cost the seller more than the commissions saved by selling privately.

Some potential questions you may want to ask before embarking on a private sale include:

a) Do I have the knowledge, energy and time to effectively market the sale of my home?

b) Am I prepared to deal with the numerous buyers who perceive FSBOs to be a target for low ball offers?

c) Do I have a comprehensive awareness of the legal ramifications of selling a home? (Many private sales have fallen through due to inaccurate and incomplete paperwork)

d) Am I able to deal with offers, counter-offers, etc. and negotiate a favourable deal? (Many deals have been lost because of a misinterpretation of what was negotiated)

e) Do I have a competent team of professionals (lawyers, home inspectors, etc.) ready to see the process to completion?


In summary, selling your home has obvious dollar saving advantages and if you have the ability and know-how it may be a viable option to consider. However, it is important not to underestimate the responsibilities involved in taking on a project of this magnitude.