Currently, in Southern California’s real estate market, properties are selling quickly and home prices are rising. Many homeowners are seeking to sell their homes to either downsize or to purchase a larger property with their equity. Some homeowners attempt to sell their own home as a For Sale by Owner (FSBO). They think they walk away with more money but may be blindsided by potential problems that may arise. Here are several reasons why this may not be a good option for most sellers.
Most buyers are finding their desired home via the internet – In today’s real estate market, it is crucial to have a strong internet marketing campaign to maximize the exposure of your home. Gone are the days when merely putting up a For Sale sign in front of your house and advertising in your local newspaper brings in a buyer.
A 2015 study by the National Association of Realtors shows the sources buyers used that lead them to the property they eventually purchased:
43% on the internet
33% from a real estate agent
9% from a yard sign or open house sign
6% recommended by a friend, relative, or neighbor
5% from a home builder or builder’s agent
3% directly from the sellers/knew the sellers
1% from a newspaper
1% other
Negotiation is a major part of the transaction process – You must be prepared to negotiate with at least some or all of these people:
The buyer ~ they will definitely want the best deal possible.
The buyer’s agent ~ who is solely representing the best interest of the buyer.
The home inspector ~ if there is a problem with the house you may have to deal with the home inspector. They are there to protect the buyer and will almost always find some problems with the property.
The buyer’s attorney ~ possible in some cases.
The appraiser ~ if there is a question of property value.
There are a lot of important documents that must be filled out correctly – One of the main reasons there is a large drop of FSBO properties on the market these days is due to the paperwork involved in the selling process. It is very difficult to stay up to date on rules, disclosures, and regulations as they are often changing. It is critical to have the latest forms and know how to correctly fill them out to avoid any potential legal issues.
Studies show that when using a real estate agent, sellers will net more money - A typical FSBO property sells for 15% less than a similar property sold using a real estate agent. FSBO listings are most commonly found in markets with lower price points. Most of the potential buyers who will be looking at FSBO homes are bargain hunters. They believe that since the seller is not paying a commission they should be able to offer less for the home. In most cases, sellers end up receiving low ball offers.
Before deciding to take on the challenges of selling a property on your own, visit with a real estate professional in your area and see what they have to offer.
Contact me today! (951) 440-3498
Stephanie Peterson
Allison James Estates & Homes
CalDRE# 02002991
www.cahomesbystephanie.com
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