Hello, and a happy December to everyone.
Charles McShan with Century 21 Universal in Chicago, Illinois. You see the photo above. Please read this question. Should I try to sell my home as a For Sale By Owner or FSBO? Answer! No, you should not. Why do I say that? I will detail that subject in this blog post so you can make an informed decision. No matter what the transaction, everyone wants to save a dollar. That is life in this world, but selling a home is not like selling a bicycle, car, or truck. Many homeowners who wish to go FSBOs do it because they believe they will save on paying a Real Estate Agent/ Broker their commission. But some FSBOs have come out on the wrong end of the deal. So let’s get into this subject
Article Guide
1:Just what does a Real Estate Agent do?
Some FSBOs think all Real Estate Agents stick a sign on the lawn, do an open house, and sit inside an office on the telephone. Thus, they conclude they do a better job selling their own home. I wrote a blog post on what realtors do for their clients. Unfortunately, we did not get our license out of a cracker-jack box. We must undergo extensive training and continuing education to stay updated on the constantly changing laws, rules and regulations.
Realtors have to work hard to bring knowledge to the table. Some people view us as salespersons, but we give professional and expert advice. We work and coordinate between the other Agents, lawyers, loan officers, home inspectors, repairers, appraisers, and the title company employees at the closing table. Remember the old saying that a lawyer representing himself in a court trial has a fool for an attorney? The same rule applies to FSBOs. If you wish to read that blog post about what Realtors do for their clients, please click here
2:Why do FSBOs not want to use the service of Real Estate Agents?
It’s simple. Do you remember that O’Jay song of the past? It simply said money, money, money, money- money. FSBOs say they can sell their own home, so why pay a Broker? We will keep that money in our pockets. Then there is the homebuyer who says since they do not have a Realtor representing them am going to lowball them. That is a documented fact.
If you Google the 2021 National Association of Realtors Profile of Home Buyers and Sellers, scroll downwards a long way to page 143 and read paragraph 3. I will give you the condensed version here. It says plainly, “FSBOs typically sell for less than the selling price of other homes. FSBO homes sold at a median of $260.000 in 2021. Agent-assisted homes sold for a median price of $318.000. Homebuyers will try to take advantage of FSBOs and lowball them with the price, but an experience license Agent will make sure the home seller gets fair market value for their property.
3:Networking!
Back in the day, you would place an ad in your local newspaper, put flyers on lamp poles and bulletin boards throughout your local area and mail out postcards. While in some cases you might still use bulletin boards but social media has replaced your local newspaper real estate section.FSBOs typically advertise in some magazines and are also on some social media outlets.
Still, a License professional Real Estate Broker/Agent will place your home on hundreds of internet sites, not only locally but internationally. We also network with hundreds of Real Estate Agents throughout the area and the world to get the information that your home is on the Market and is ready to be sold. Bring your buyers.
There is always someone looking to move into your local area, and that interested person could be thousands of miles away, but with the internet, it is like they are just right next door. So while FSBOs can advertise locally, they do not have the network to attract large pools of buyers with the click of a button. We do. No brag, just fact.
4:Guesswork
A; Overpricing a home which will cost you buyers who will not come back for a second look causing you to lose a sale.
B: Underpricing a home causes you to lose money
In this time of High-interest rates combined with inflation, no one knows what tomorrow will bring. One housing expert says this, and another housing says that. You have to keep in tune with what the Market is doing today. Forget the summer of 2022. That hot-selling Market is gone. It is behind us. It is cold outside in more ways than one. Everyone from the home seller to home buyers will have to make adjustments. Do not go it alone. Have an expert on your side. Hire that Realtor
5:Experience of the Realtor!
A: Realtors will make sure only pre-qualified severe buyers are allowed in your home. This rule does not apply to who will come to your open houses.
B: The Realtor will negotiate and handle objections on your best behalf. Keep this point in mind; you being the homeowner have your emotions in the game; after all, this is your home. You cannot be objective. If a homebuyer says something negative about something in your home, you will take offense. In contrast, the Realtor is a third party. We are unemotional about the house, and we can impress the homebuyer with the value of your home in a way that the buyer might distrust coming from you.
C: The Realtor and your Real estate attorney will fully understand the Real Estate contract and Real Estate law.
6:Do you have time to show your home?
Think about it, FSBOs.Homebuyers want to see your home in their time frame and not yours. That is why you need the services of a Realtor.FSBOs, like home sellers, for the most part, work either a full-time or a part-time job. FSBOs do not have the time, nor are they trained to conduct open houses, private showings, and marketing. But on the other hand, these are everyday duties real estate agents perform for their clients.
Summary!
So when you add it all up, the above six reasons should convince FSBOs not to try and sell their homes by themselves. Sure, you can do it, and some FSBOs did sell their homes. Others employed the services of a discount broker only to be disappointed because of the limited discount services, marketing, and exposure. Remember the old saying. ” You get what you pay for.”We Realtors work hard for our commissions, and many former FSBOs leave the closing room happy when they receive their check for the sale of their home.
The Market as it stands now and heading is going into 2023!
The cold Fall/winter market has replaced the red-hot summer market, and no one has a crystal ball to foretell the future. We can only take it a day at a time. Every Market and every neighborhood is different. Some people are waiting for interest rates to go down when they can continue to escalate into double digits. Some new homeowners who bought a home without using a home inspector are seeing the errors of their ways. Homeowners wishing to sell now, please price your home accordingly and not based on what happened last summer.
Many homebuyers feel that they are now priced out of the Market. It might not be until 2024 that interest rates drop considerably. In all honestly, all local governments had to do with fewer resources coming in during the coronavirus pandemic, so expect property taxes to rise. Cook county has some of the highest property taxes in the nation. For renters, you will soon feel it. Years ago, you could afford to pay rent and live in New york city, San Francisco, and Los Angeles. Those days are gone. Give it two more years; you will not find too much affordable rent anywhere in Chicago. So it is coming. To counteract that change, if you can find the right home, then purchase that home with the plans to refinance later. You might have to reconsider your choice of location, be it a city or the suburbs. Single-family homes are more expensive than a condominium. December thru April will be an excellent time to buy a home.
And one more thing. Things never work the way you wish. In a perfect world, if you are a renter, you would like to purchase a home as close as possible to the end of your lease. But with inflation and interest rates being what they are, if you find that dream home in March/April but your rental ease does not end until June or the end of September, you will have the decision to make. If your landlord does not let you out of your lease, then you must make a decision. First, wait until your lease expires; the interest rate could have gone up, or the home you want will be gone. Also, the Spring and Summer rush kicks in after April, and low inventory could force home prices back up. So you might have to plan to pay your new home mortgage along with the apartment lease payment simultaneously. If so, prepare for that situation as a last resort.
That concludes this blog post. My next post will deal with interest rates, and I will publish that in January. My office is located at 7300 N.Western Ave in the West Ridge neighborhood of the city of Chicago. So you FSBOs in the Chicagoland area, please read this blog post and call me. If you live outside the Chicagoland area, contact your local Real Estate agent. We can and will get the job done for you. As a gift for reading this post, please download a free home seller and a free homebuyer guide below. So, should I sell my home for sale by the owner? After reading this blog post, your answer should be no. Why? Because I want to put the sign in the photo below in your front yard. I will see you in 2023. Take care and be safe.
Charles McShan
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Winter 2023 homebuyer’s guide, click here
Winter Homeseller’s 2023 guide, click here
