With the growth of online tools, companies are quickly building products to serve the real estate community. After all, it’s a lucrative industry, home buying and selling will always be a thing - even if it does slow down, and companies around the world are diving in to make as much money off consumers as possible.
Selling your home without hiring a real estate agent could mean thousands of dollars back in your pocket, which sounds tempting, especially as housing prices rise. But is it the best move?
There are many websites that allow you to skip the listing agent and offer your home as “for sale by owner” — or FSBO (pronounced FIZZ-bo).
But FSBO sellers should be prepared to do a lot of legwork to manage the sales process, with no guarantee of a final sale. Remember the process of finding a home you could afford and getting a mortgage? Selling a home on your own can be far trickier.
Here are five questions you should ask before selling a home on your own.
5 questions to ask
- Do I know the value of my home in today’s market?
- Am I ready to work with a buyer’s agent?
- Will I take charge of sales and marketing responsibilities?
- Can I bear criticism of my home?
- Am I willing to screen potential buyers?
1. Do I know the value of my home today?
A common mistake FSBO sellers make is pricing their home too high, leaving the property to languish on the market.
“When a home sits for a long while, buyers start to wonder what is wrong with it,” says Piper Nichole, author of “The For Sale By Owner Handbook.” “The best option is to come out of the gate priced right.”
To market a home competitively, sellers should research the final sale prices of similar properties in their community.
Real estate websites typically offer local sales trend information, selling prices for comparable homes (“comps”) in the community and the average length of time on the market. But these websites do not have all the data that a real estate agent has access to, so it might be worth asking a Realtor to perform a market analysis or hiring an appraiser.
Many real estate websites offering a quick estimate “are not doing a market analysis, they’re just writing an algorithm,” says Michael Seward, broker and owner of Michael Seward Real Estate.
2. Can I work with a buyer’s agent?
In a typical real estate transaction, you would hire an agent to list your home and you would pay a fee, traditionally about 6 percent of the purchase price, Nichole says. The buyer’s agent and seller’s agent often split the commission in half.
But if you’re selling on your own, sometimes you can offer a commission to the buyer’s agent to incentivize them to show your home. The commission is about 3 percent of the sales price. A buyer’s agent typically expects this, so not paying a commission could shrink your pool of potential buyers.
However, you should first learn about your state’s real estate laws so you don’t overpay the buyer’s agent or get stuck in a transaction that’s more harmful for you.
“It’s been my experience that a lot of real estate agents don’t know the laws or the code of ethics,” Seward says. “If you offer a commission to a buyer’s agent, familiarize self with state and local laws first.”
3. Can I handle sales and marketing duties?
Some FSBO sellers underestimate the amount of effort it takes to market their house. You need to keep the home clean, clutter-free and “show ready” at all times.
Other important steps include:
- Taking good, professional photos of the property and writing effective sales descriptions.
- Buying and installing a “for sale” yard sign with promotional flyers that include contact information.
- Listing the property on several classified advertising and real estate websites.
You’ll also want the home placed in the Multiple Listing Service, or MLS, a real estate brokers’ database of properties for sale.
FSBO sellers can’t submit to an MLS, but some companies have brokers who will list a seller’s home in the MLS for a flat fee, typically a few hundred dollars.
In addition to marketing their own property, FSBO sellers often need to find and hire people to help them complete the sale. These professionals include real estate attorneys (to review contracts and offer advice), appraisers and contractors (to make any necessary home repairs).
4. Can I bear criticism of my home?
The emotional aspect of selling a home is often overlooked, but it’s an important part of the selling process. Owners will probably hear a lot about their home’s shortcomings from buyers trying to negotiate a lower price.
Or worse, they may not receive any interest in their home, especially if the price is too high.
It can be easier to sell a home as a FSBO if you don’t have an emotional attachment to it and can take an objective view of its value.
5. Am I willing to screen potential buyers?
If you’re going to be a FSBO seller, you must be willing to screen the buyers.
Before you sign a contract with a buyer, make sure the purchaser will be able to come up with the money.
“You don’t want to take your house off the market to negotiate with someone who was never qualified for the home in the first place,” says Dale Robyn Siegel, president and mortgage loan originator at Circle Mortgage Group.
Before accepting an offer, ask for a current mortgage preapproval letter from a reputable lender. The letter should show that the buyer spoke to the lender and has been preapproved for the purchase price of the home.
Have you been scratching your head, wondering what your next great home renovation project should be? If you are like most homeowners, you have many areas that could use a little attention. Let’s explore three reasons why installing solar panels should be high on your list of home improvement projects for 2018.
The ROI On Solar Is Getting Better
It might seem counterintuitive to think about spending money to save money, but with solar panels, that’s precisely what you are doing. Solar is an up-front investment that returns money to your bank account over time. As you are generating your own electricity, you will spend less on utilities each month. Depending on your setup, you may even be able to sell surplus electricity back to the grid, lowering your monthly bills even further.
Don’t think about solar panels and installation as sunk costs that will never be recovered. Instead, work with your solar installer to determine what your return-on-investment should be.
Solar Drives Property Values Higher
As you might expect, installing solar panels can also increase the value of your home. Many potential home buyers are searching for modern, efficient, climate-friendly homes that allow for a bit of energy independence. If your home already has these features, it is likely to be more compelling than other houses on the street without them. If you are thinking of selling your home in the future, installing solar is a great way to increase its value.
Protecting Your Local Environment And Community
Finally, let’s not forget that investing in renewable energy means protecting the health of your local community. Every solar panel installation that goes up means one less home relying on power produced by other means. It might not seem like much, but over time a single home’s worth of solar panels can prevent a significant amount of emissions from reaching the sky. You can even take things one step further and invest in an electric car which can be connected to and charged by your solar panels.
These are a few of the many good reasons to consider an investment in solar panels in 2018. If you are interested in going solar, but can’t with your current home, contact us today. Our friendly team of real estate professionals is happy to share some beautiful local home listings that are ready for solar.
Landlord Squeezing You for yet Another Rent Increase? It’s Time to Buy a Starter Home
December 21, 2017 by Amy VanWinkle
Did you recently receive your annual notice that the rent is going up? If so, you’re not alone. Millions of renters are seeing more and more of their income drained away due to higher rents. To make matters worse, every dollar in rent is one that you are not saving, investing or using to build your net worth. If you’re feeling the pinch of higher rents, it might be time to buy your first starter home.
Comparing Rent With A Mortgage
Have you ever done the math to understand how close your monthly rent might be to a mortgage payment? Here’s a quick and easy exercise. Multiply your monthly rent by twelve, and then multiply that number by 25. For example, if your rent is $1000 per month, that is $12,000 per year and $300,000 over 25 years. So if nothing changed from today, you could afford a $300,000 mortgage.
Homes Are More Affordable Than You Think
Many first-time home buyers are convinced that they can’t afford to enter the market, but that is not the case. There are homes available that fit almost every budget or price range. In fact, it is less important to worry about the total cost and more important to worry about location, size and local amenities like schools and parks.
Remember, when you buy a house you aren’t just locking yourself into a rental contract. You are investing in a home and property have the potential to gain in value over time.
A Few Other Considerations
Of course, there are some considerations that you will need to make as you start down the path to homeownership. The first is that your mortgage is unlikely to be your only monthly expense. You will also encounter property and other taxes, utility fees and if you buy a condominium or apartment, homeowners’ association fees. You will also be responsible for maintenance and upkeep since you own the home. But that also means that you are free to customize and renovate as you see fit.
Keep in mind that it is never too late to escape the rental trap. When you’re ready to start building your future by investing in your first home, contact us. Our experienced real estate team is happy to share beautiful local home options that will suit your needs and budget.
NAHB: Builder Confidence Outstrips Pre-Bubble Highs
December 21, 2017 by Amy VanWinkle
Home builders surveyed by the National Association of Home Builders expressed their highest level of confidence in housing markets since 1999. The index reading for housing market conditions in December hit 74, which exceeded November’s reading of 70. Analysts expected a flat reading of 70 for December. Readings over 50 indicate improvement in housing market conditions.
The three component readings used to comprise the Housing Market Index also rose in December. Builder confidence in current market conditions rose four points for a reading of 81; builder confidence in housing market conditions over the next six months rose three points to 79. Most surprising was the jump in builder confidence in buyer traffic levels in new housing developments. Traditionally, this reading rarely exceeded 50, but in November, it achieved the benchmark reading. December’s reading for buyer traffic gained eight points to 58. December’s reading for builder confidence in buyer traffic reached its highest level since 1999.
Home Builder Confidence Reflects Strong Economic Conditions
Strength in jobs markets and overall economic conditions drove builder confidence; home builders also cited potential tax breaks associated with pending tax legislation. Tariffs on Canadian lumber were cited as an obstacle to builder profits and increased prices.
High demand for homes caused by slim supplies of homes for sale continues to boost home prices. Real estate pros have said that increasing construction of single-family homes is the only way to correct the current imbalance between rapidly increasing home prices and challenges for first-time and moderate-income home buyers who cannot compete with cash buyers or afford rapidly rising home prices.
Builder Confidence Expands in All Regions
Builder confidence also rose according to the three-month rolling average for builder confidence in the four regions tracked by NAHB. The Northeastern region reported a one-point increase for a regional reading of 54. Home builder confidence gained six points in the Midwestern region for a reading of 69. Home builders in the South reported a confidence reading of 72, which was three points higher than in November. Builders in the Western region reported a two-point gain in confidence with a reading of 79 in December.