A running commentary on the Wenatchee real estate market in and around North Central Washington 98801. Hints and tips on buying Wenatchee homes, selling homes and finding the home you want. Real estate sales in Wenatchee to Leavenworth. Home buying? Home selling? Looking for Wenatchee Real Estate? Stop by here.

Sunday, February 12, 2006

For Sale By Owner

We have all run into this type of property. The owner is trying to sell his house by himself because he may be able to "save" money. Believe me I understand money as well as the next person. But lets evaluate this position and some myth around what you save:
1. If the seller is saving a commission and putting money in his/her pocket don't you think the buyer might be aware of that and try and make their offer reflect that the seller now has room to negotiate?
2. Commissions are negotiable... they are anything but fixed. Therefore, they may not cost what you think.
3. A seller that is doing his own sales promotion, showings, etc is limtited to their own availability to meet with and work with a prospective buyer. But Real Estate buyers are looking, usually, when it is a good time for them, not when it is a good time for the seller. So if you are only showing in the evening or on weekends or if you only get phone calls at home and you work a normal shift how many buyers did you miss. Or to look at it another way... On a house with a $200,000 mortgage, if missing only one call delays selling one month you just lost $1,000 in additional interest expense. Add that to the costs of advertising, keeping the house 'showable", delay in finding your house to move into etc., etc., and pretty soon we are talking real money and inconvenience.
4. In our community there are approximately 350 real Estate Agents. That means that you have 350 employees working for you and trying to sell your home whether or not you are available. Good agents will work to find qualified buyers, will present valid offers and will work very hard to be sure a property sells and closes. At 1:30 PM, on a Friday, when you are at work, your agent is talking with the title company or bank ironing out wrinkles that may have come up effecting closing. Often times about details you may never even know about but are deal breakers anyway.

Finally, selling on your own really means you are unrepresented. If the buyer is represented you may find yourself at a disadvantage. But even if they are not, as an unrepresented seller are you knowledgeable about lead paint issues? Did you know that you are subject to large fines for not properly warning a prospective buyer? Did you know that by failing to give your buyer a properly filled out and executed Sellers Disclosure you may have the buyer walk or rescind the transaction leaving you with nothing but putting the house back on the market?

There are lots of other reasons to be represented and to use a REALTOR to sell your property. Even though the enticements of more money in the sellers pocket is great, in the final analysis it usually is not as great as anticipated and usually be way less. It (selling unrepresented) is an option that may work for some but consider it carefully!


Blogger Geordie Romer said...

You make some really good points. We really need to start talking about Unrepresented Sellers. Imagine representing yourself at court and all the money you can save! Or how about DIY surgery?!

What do the recent national statistics say? Unrepresented Sellers sell their homes for an average of 15% less than sellers that use an agent. So much for saving on commission...

12:39 AM

Blogger Perrin said...

Ahhh...but hope springs eternal. And OCCASIONALLY it does work. I just had a client that wanted me to get her access to a property an unrepresented seller was trying to move. Originally offered at $475,000 (six months ago)they are now on their third price change at $425,000. They (the seller) said they could not afford to pay an agent. Further talk revealed they had a mortgage of about 300,000 at 6.5%. So do the math; over the six months they paid about $9,700 in additional interest. Add in advertising costs, additional taxes, and lost opportunity of having the money available (even at 2% or less for a portion...assuming reinvest in a new home) and their total unrecoverable costs are easily in the $12,000 range. Since their commission to an agent might have run (at least to me) approximately $7,900... they have really saved a lot! By the wat this was three weeks ago and today (3/25) the house remains unsold. Now lets talk about all the other issues... market worn, mixed price signals, legal, lack of marketing, etc.

9:49 AM


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