In difficult times, many homeowners who must relocate look to save money by selling their own home, avoiding the Realtor costs. (These costs are typically 5%-6% of the sale price of the home) The purpose of this article is to provide some practical steps to any person attempting to sell their own home. It is important to understand that in order to save money on the Realtor’s fee, an owner attempting to sell their own home must incur other fees and devote a great deal of their time in order to compensate for the services that they are not receiving from a Realtor.
First two steps in selling your own home:
Before you can sell your home, it is important to determine what you will net from the sale. Obviously you must determine if the move is feasible in the first place. Your relocation options will depend on how much money you receive from the proceeds of the sale.
Step One: Determine the Value of Your Home
This is a critical step and most Realtors will tell you it is 80% of their job as a listing agent, i.e. pricing the home correctly is what they are primarily paid to do. In the absence of Realtor guidance, Sellers often look to their city or town's assessor's office to see what value the city or town is basing the property taxes. This figure can be off by tens of thousands of dollars and is not an accurate guide to the current market value. Usually, the assessed value is based upon selling prices in a prior year not the current market selling price.
There are many on-line websites such as Trulia and others that do an automated "Market Analysis". These values may also fluctuate wildly.
The bottom line is that your best bet is to have the property professionally appraised. Such appraisals cost between $200 and $400 and are worth every dime. BONUS: You can hand out the appraisal to potential buyers and use the appraisal for information for your own advertising. (Gary Oakley an appraiser from Western Massachusetts indicated that he would provide an appraisal for $200 - ph. (413) 788-7880, email geoakley@hotmail.com)
Dangers of mis-pricing your home: Saving $10,000 on a Realtor’s commission only to undervalue your property by $20,000 does not make economic sense. Getting a professional appraisal will help you avoid this mistake.
A more common mistake, however is to overprice the home. Over the past five years, the values of homes in some areas have decreased dramatically. However, many Owners today believe that their homes are worth far more than their actual current market value. This misperception leads to overpricing in the current buyer’s market.
The dangers of overpricing the home are three-fold:
1. An overpriced home will sit on the market for a long period of time. If you are relocating, this could result in an Owner carrying two properties - new house and old house - for a long time at substantial costs.
2. Even if the price is adjusted down, some buyers will only look at homes that have come on the market recently. Your pool of Buyers may be reduced to bargain hunters.
3. A property that sits for a long time may create the perception that there is some defect in the home or that the Owner is desperate to sell the home. In both cases this will attract "low-ball" offers.
Ultimately overpricing may cause an Owner to sell the home for below market value and at additional costs. GET AN APPRAISAL.
Nyles Courchesne is an attorney specializing in real estate for the past 15 years. He is a partner with the law offices of Peskin, Courchesne & Allen, P.C., located at 101 State Street, Suite 301, Springfield, MA 01103 - ph. 413.734.1002 - fax 413.734.1002 email: nlc@pcalaw.net and on the web: www.pcalaw.net
Disclaimer: In accordance with rules established by the Supreme Judicial Court of Massachusetts, this blog posting must be labeled as "advertising." It is designed to provide general information for clients, prospective clients and friends of mine and my law firm and should not be construed as legal advice, or legal opinion on any specific facts or circumstances. This blog posting is designed for general information only. The information presented in this blog posting should not be construed to be formal legal advice nor the formation of a lawyer/ client relationship.
1 comment:
Excellent advice. As the company that brought for sale by owner concept to Western MA in 2002 with the introduction of Picket Fence Preview magazine, Massachusetts 4 Sale By Owner (http://www.ma4salebyowner.com) has helped educate consumers for years about how to be successful selling "by owner".
Pricing is a critical component and our most successful advertisers have obtained a professional appraisal and used that information to negotiate from a position of strength.
We do recommend that sellers use the services of a good real estate attorney to protect their legal interests and to contact an attorney early in the process.
Exposure is also key and today's savvy seller is harnessing social networking in addition to advertising to a wide pool of buyers, both locally and regionally. With the ability to use the MLS and traditional FSBO websites, sellers put themselves directly in front of buyers and determine the amount of commission, if any, they are willing to give to a buyer's agent.
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