Selling a house can be a challenging and yet a rewarding experience. I understand that there are folks who like to do things themselves, rather than hiring someone to do it. That being said, these days, I really don’t know why anyone would want to sell their home, “For Sale By Owner”.
A few years back, the real estate market wasn’t as sophisticated. You could put a sign in front of the house, and run an ad in the local newspaper. Then you waited for someone to approach you about the house. Financing was fairly straight forward, and maybe you would get lucky and sell it.
These days, so many changes have taken place. The buyers and financing have gotten more sophisticated. This makes it more difficult to successfully sell by yourself. Unless you are willing to invest an inordinate amount of time and effort. Then there is the price. If you price it too high it won’t sell, or even appraise for the mortgage; and of course if too low, you loose money that you could have had in your pocket.
Selling a home without the various tools and options available to me, can be a daunting task. So, as a fsbo (For Sale By Owner) you put a sign in the front yard, maybe a “For Sale By Owner” ad on the internet and screen all the buyers. Most likely you will be canceling personal engagements — in order to meet with buyers, who are on tighter schedules than in the past. Then the buyers, themselves, are more sophisticated. For instance, most likely you are selling “By Owner” in order to save paying the commission. Well, why are the buyers going through the aggravation of working with a “By Owner”? Maybe to save the same commission? By the way, study after study has indicated, that a seller nets more money working with a REALTOR®, than selling by owner.
Generally a “For Sale By Owner” gets more calls about the property from real estate agents who are looking for listings, than they do from buyers. But in the event that you actually do get a buyer, who expresses interest, they will probably try to get you to go even lower than your discounted price — because you are selling “For Sale By Owner”. Okay, so let’s say you’re really lucky and you get past that — the buyer agrees to your price. Then what do you do? Can they really afford to buy the house? How will you know?
Since the financial crash in 2008, and with the enactment of the “Dodd – Frank Act” — which as it has been incrementally rolling out, it has caused continual changes to real estate law and sales practices. As a result many changes have taken place in the real estate market. Somethings that use to be perfectly legal, are no longer legal. Currently, there is going to be a huge change in the mortgage application and processing procedure, TILA-RESPA Integrated Disclosure rule implementation, beginning Oct. 3, 2015. This change is expected to completely alter the way that the mortgage financing process is handled. There are builtin deadlines and resubmitting requirements, delaying the closing 3 days each time an error is found in the mortgage numbers, and could actually trigger a 10 day re-submission process. This is an all encompassing change in the way mortgages are done.
On the surface, it sounds fairly simple. Until you understand the full dynamics of the law. Mortgage companies, have spent billions of dollars creating software and processes, in order to be compliant with the law. Only time will tell how it plays out. But in the mean time, we are being kept apprised of the impending changes through our support vendors, NAR (National Association of REALTORS®), local boards, and our legal team.
Here is a link to give you a better idea of where the buyers are coming from. It’s the 2014 compilation of buyer and seller profiles, published by NAR (National Association of REALTORS®).
In the event that you choose to sell your home “By Owner”, I truly wish you good luck! If you decide to employ a REALTOR®, please consider giving me a call.