With what appears to be potential rewards to be gained by not having to pay a Brokerage commission, many people wonder why so few home sellers undertake the task of selling their houses on their own. Possibly it has something to do with expertise and other costs, including litigation, when things don’t go right. Many homeowners who do consider selling their own home back off when they see the level of knowledge and commitment that is needed to do an effective job. Whether you decide to sell it yourself, or hire a professional real estate agent you will find the vast
The most successful home sellers are those who take an active role in the process, whether it is as a sale by owner or an agent. If you feel that the best route is to sell your home yourself, then having as much information as possible as crucial. In addition to learning about the financial and legal and marketing process, a complete understanding of the July 1, 1993, Virginia made the Residential Property Condition Disclosure Act is mandatory. The law applies to all non-exempt residential real property consisting of 1-4 dwelling units. Exempt transfers are those pursuant to court order such as estates, foreclosures, bankruptcies, etc. New homes have special requirements. Please consult an attorney if you are unsure about what applies in your case.
The law makes it mandatory that a seller provides either a disclaimer or disclosure statement to a purchaser no later than contract presentation. A disclaimer is a statement that the seller makes no representations or warranties as to the condition of the property, except as otherwise provided in the purchase contract. A disclosure statement discloses defects in the condition of the property actually known by the seller. Should the seller or seller's agent fail to provide one of the above to the buyer before the contract is ratified, then the buyer could cancel the sales contract by sending written notice to the seller right up to the date of settlement. Furthermore, the seller could be held monetarily liable to the buyer for an incorrect answer on the disclosure statement for up to a year after settlement. Compliance with this law can be very tricky when you are selling your own home.
Before providing some helpful hints if you are selling you own home let me talk about the advantages and disadvantages of selling your home on your own.
Advantages:
- There is no Brokerage Fee (commission) to be paid.
- You are in total control of the transaction.
- If mistakes are made, they are your own. There is no one else to make mistakes "for" you.
- If your equity is low, you may be able to sell your house without having to write a check.
- You are always available at the home for showings, answering inquiries, etc.
Disadvantages:
- You must rely on your own experience and knowledge of the real estate process.
- You must pay for all marketing and advertising costs, which can be expensive.
- You will not have access to the MLS (Multiple Listing Service) unless you pay to be included.
- You could under price or overprice your home.
- If you are not skilled in negotiation you may leave money on the table.
- You will either have to do the paperwork or hire an expert to handle the legal forms, etc. I recommend hiring an expert you could make a costly mistake here.
- If you want to give maximum benefit to your efforts, your free time will be somewhat or severely limited.
- Many buyers believe that if you are selling on your own and not paying a commission, it is they (the buyers) who should get the saving--not you.
- As you approach negotiations, you must sever emotional ties with your house or you will place yourself at a disadvantage.
- You must become knowledgeable of legal and financial issues to be most effective.
- Many buyers are uncomfortable negotiating with the homeowner.
Hints to help you sell your house on your own:
- Remember, you will be in competition with house listed by Agents who will coach their sellers on all aspects of preparing their homes. Make sure you are aware of what appeals to buyers and spend the money necessary to attract them.
- Become an expert in advertising and marketing. See my information on the difference between sales and marketing below.
- Become an expert on real estate and finance so that you could comfortable answer questions about down payments, monthly payments and mortgages.
- Be aware of all legal requirements for disclosures in your area. Not disclosing necessary information or not using the correct form could leave you open to legal action from a buyer.
- Familiarize yourself with offers and contracts--don't wait until you have one in your hand.
- Learn about equal housing laws.
The Difference Between Marketing and Selling
There is a difference between selling and marketing a home. When an individual agent locates a buyer, shows your home and writes a contract to purchase it, that person has "sold" your home. Traditionally, homeowners have chosen an agent they felt would "sell" their home, someone with a history of showing and selling homes to individual buyers. Being only one person however, the number of possible buyers with whom they are working is limited. When you choose a real estate agent to market your home, he or she is working to expose your home to every buyer in the market. The most common forms of marketing are:
Marketing Through the MLS
This data is made available to all participating real estate agents in the area. Most MLS systems today are quite sophisticated, containing the information about the majority of listings in a given market area.
Marketing in Printed Media
The value of print advertising is only as good as the knowledge of when and where to place advertisement. If you are selling your own home learn as much as you can about what potential buyers are reading.
Marketing on the Internet
By virtue of the fact that you are on-line reading this page, you are evidence of the growing power of the Internet in providing information to buyers and sellers of various products and services. Each passing day brings massive change to the quantity of data and choices that the general public can access in their search for knowledge.
