For some homeowners, the allure of selling their home privately is very appealing. We've all heard that selling your house or condo yourself can bring huge savings. Saving $25,000 on a $500,000 sale could mean more money in your pocket and possibly more buying power. What you might think is a savings might actually be costing you a loss or even less potential earnings.
Think about this for a second.
By selling your home on your own, you’re typically thinking about trying to save money on the commission. However, there are many other factors that need to be considered. What if using a real estate expert can bring you a higher sale price and after all calculations you end up with a higher net gain even after paying that “high” commission? I know you would be very happy.
People looking to sell privately are often short sighted and only think of the commission cost or what they consider a potential savings and may not be considering what their gains, their possibilities, or their options could be. Think about it, how many times have you ever sold a house/condo before?
Here’s example. Your roof is leaking. You’re not going to Google roofers, call the first one you see, get a quote and go with them are you? You’re going to get at least two quotes and decide from there. Even if you are referred to a roofing expert from a trusted friend you’re most likely to still get a second quote and find out what you’re best options are.
Should you just patch the roof or should you do the whole roof? You’re not necessarily thinking of the cheapest option, because there is nothing worse than a leaking roof. You’re thinking of what’s the best option. You would get all the info needed to make the right decision. Why wouldn’t you do that when selling your home?
With uncertain economic times, keeping money in our pockets is a priority for just about everyone. Before you slide on the salesman’s hat, let's go through some of the arguments these do-it-yourself real estate companies share with you.
1. The argument: You'll Save Thousands!
They say you'll save thousands because there’s no commission. Taking the agents out of the equation relieves you of 5-6% commission fees! WOW!
Reality: only about 2% of private sales are to a private buyer so you'll still have to deal with an agent and pay some commissions. If you’re not comfortable with negotiating, a buyer’s agent with their abilities may be able to negotiate more than the traditional 2.5% that is typically awarded to the buyer’s side of the transaction.
Selling your home yourself shouldn’t just be looked at as saving money, it’s about making money. It’s an investment remember. When was the last time you told your financial advisor that you want them to save you money. You want them to make you money!
If you can make more money using a professional, than you would doing it yourself, wouldn’t you be better off? Of course you would.
2. The argument: Just Point and Click
There are tons of online real estate search tools and resources. Around 95% of all buyers are using the Internet to look for homes - so it's simple.
Reality: A realtor brings firsthand knowledge of an area with in-depth comparables and unique and trusted insight. Not to mention, they bring objective information about properties. Let’s face it... nothing is as easy as “point and click”. If it was everyone would be doing it...and correctly!
3. The argument: You Can Market Yourself
Use social media, sites like Kijiji, marketing services and websites provided by these companies. It's too easy to mess up.
Reality: Agents have established networks, resources, tactics and knowledge to market your home to the right buyer demographically. They know where to market, how and when. They can also tap into an extensive network of realtors and buyers.
How much is your time worth? $15 an hour, $30, a $100? Most private sellers have no idea how much time and effort goes into marketing and getting your home ready for sale.
Most people are very busy with work and life to dedicate the time to do this properly. Creating online ads, showing the home, taking and returning calls all take up your time. Time that could be used to earn more income or be spent with family. Intangibles rarely get the credit they deserve until after the process.
Stay tuned for Part II later this month. We uncover a few more myths from these do-it-yourselfers and detail the realities of the whole arrangement.
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