Real Estate, Sell It Yourself?
Now that the overheated US housing market is finally cooling off, it’s no surprise that everyone is looking for a deal. But buyers aren’t the only ones. Sellers are in the market to save money too and a number of homeowners are trying to do it by not hiring realtors.
Last year, about 12% of all American home sales were so called “FSBOs” or “for sale by owners.” That figure is actually down somewhat from the nationwide peak, which occurred in 1987, when some 20% of all homes in the U.S. were sold by their owners.
When is it a good idea to try selling your home without a realtor? According to the National Association of Realtors, never! They insist that you need the expertise and savvy that a real estate professional brings into what likely will be the most costly transaction of your life. On the other hand, when you’re talking about saving potentially tens of thousands of dollars that would go to a realtor, many people opt to go it alone.
There is some academic evidence to support the FSBO route. Economists looking at the Madison, Wisconsin housing market found homes sold by owner on a local website went for about the same amount as those sold by realtors. But the same study also found that realtors did sell homes faster. And according to a National Association of Realtors survey of home sellers in 2005 using a real estate broker brought a 16% increase in the sales price.
So here’s what to consider if you’re thinking about selling your home by yourself:
1) Can you negotiate the best price for your home? Do you have the time and ability to figure out the comparable prices of homes recently sold in your neighborhood to decide how to price your home?
2) Do you have the time to arrange property showings and host open houses on the weekends?
3) Think about advertising costs. There are a large number of websites that list FSBOs but the costs can add up if your house doesn’t sell right away.
4) Don’t forget the legal fine print. During the closing phase of the sale, you’ll need to deal with inspections, appraisals and contract terms. If the closing requirements are not done right, you could expose yourself to legal liability. Real estate brokers say that is yet another reason to have a professional by your side.
In Los Angeles, where the housing market is in a 14 year sales slump, it might not be the best time to try selling yourself, especially if you don’t have a lot of time to wait. But in other markets like Atlanta, Georgia, where forsalebyowner.com says FSBO sales are on the upswing, it may be worth the effort.
Sandra Hughes is a CBS News correspondent based in Los Angeles.