Risks of Selling a House Without an Agent
By Janet Steinberg
The ranks of Do It Yourselfers are increasing in every aspect of our lives. The Bureau of Labor Statistics anticipates that by 2020, there will be 60M DIY-ers in the workplace as freelancers and independent contractors. EBay claims 25M DIY-ers sellers on its site. And check Home Depot and Lowe’s these days, if you can get in the door.
The real estate industry is no exception. If and when you ever choose to sell your home yourself without an agent, here are some major league risks you might face:
1. Knowledge – An agent’s knowledge is priceless. From knowing every aspect of the selling process, to being able to make sense of online data, to having a network of industry professionals (inspectors, lenders, skilled/trusted repair people, etc.), to regulations, etc., agents know every detail involved with residential transactions.
2. Time – Can the For Sale By Owner (FSBO) make the house accessible on a moment’s notice? Does the FSBO have the time and skill to schedule and manage showing appointments at the convenience of potential buyers and agents?
3. Presentation – There are absolutely no second chance to make a good first impression. The house, photography, video, content marketing, targeting, drone, etc. had better be as close to perfect as possible.
4. Marketing – Content marketing is storytelling to people who might be interested in hearing the story. Without a really great story told to people who want to hear it, no one will even know the house is for sale.
5. Proper Pricing and Buyer Qualifying – FSBOs must have the expertise, data and clear judgment to properly price their home…too high/too low are each problematic. And FSBOs must have expertise, data and clear judgment to make sure that the person who wants to buy your house is qualified to do so.
6. Security – Anyone can walk into any open house, take photographs of its owners’ belongings, security cameras, etc. and come back later when no one’s home and strip all of it.
7. Negotiation Expertise – Issues such as how much, when, terms, conditions, who pays what, etc. are just some of the issues involved in real estate negotiations.
8. Inspections – Which inspections to do, who to do them, who and when to do repairs, who pays, etc. are just a few of the issues related to inspections. Inspections or the lack thereof can be costly on both the front and back end of a transaction and are often where lawsuits begin.
9. Transaction Management – What happens when the appraisal of the property is under its list price? What happens if the buyer’s financing fails to come through?
No point in even listing the legal and financial risks. They and the inherent regulations, contracts, binding business agreements, closing documents, etc involved with selling a house without an agent deserve an entire post all by themselves.
Just as everyone knows the phrase “buyer beware,” FSBOs without an agent ought to beware as well.