Selling Your Home on Your Own?

According to the Massachusetts Association of Realtors®, nearly ninety percent of homeowners use a Realtor to sell their home year after year. Furthermore, similar to the national trend, Massachusetts homeowners who hired a real estate agent to sell their home in 2006 garnered a median selling price that was 23.4 percent higher than homes sold by property owners on their own. This article provides additional detail to explain why hiring a professional marketing agent is a smart choice.

The desire to keep all of the proceeds from the sale of one’s home is quite enticing at first glance. After all, there will be a state sales tax, attorney fees, a potential capital gains tax and other miscellaneous closing costs. So, the very idea of “cutting out the middle man” initially sounds like a smart move. Why not save that 4% to 6% or so in Realtor fees when you can do just as good a job selling your home as a professional can? The problem is that you can’t.

It seems once a homeowner puts a “For Sale by Owner” sign in front of their home and places an advertisement in a local newspaper; their home becomes a magnet for unqualified buyers and bargain hunters. After all, these folks already know that you are not paying for professional representation, so they skim that percentage amount right off the asking price before commencing price negotiations.

And what happens if you have priced your home incorrectly in the first place? Many unrepresented sellers over-price their home (thereby helping other homes sell) while others unknowingly under-price it. Many Internet sites give general estimates of a home’s value – but fall short when it comes to knowing local market trends and understanding the uniqueness of each property. When compared to other parts of the country, condos and single family homes in greater-Boston are not “cookie cutter” look-alikes. No amount of Internet research can take the place of an in-person, professional assessment of your home’s positive attributes as well as its challenging flaws – and provide staging/merchandising advice to minimize or eliminate those flaws (please refer to my recent article entitled: Staging Your Home to Sell).

Correct pricing and merchandising are just two aspects of selling your home at a competitive price within your desired timeframe. What about the costs of advertising and marketing (and do you know the difference between the two)? Most buyers (80 to 85 percent) initially turn to the Internet for their home search before contacting a Buyer Agent. It’s simply not enough to hire an agent to put your home in MLS while you do all the rest. Selling a home today requires local, regional and national exposure. Marketing agents have access to a vast array of websites, many of which are inaccessible to the general public. Moreover, a good marketing agent has developed strong relationships with other Realtors to facilitate “getting the word out”.

What about hosting broker and public open houses, and requests for private showings during weekdays? Do you really have the time and patience for these time-consuming activities? Be aware that many buyers don’t feel comfortable “thinking out loud” in the presence of a homeowner, or providing honest feedback directly to a homeowner for fear of hurting their feelings. A professional Realtor, on the other hand, solicits unvarnished feedback from each Buyer Agent. Over time, repeated observations and comments can help you and your Realtor to re-stage a room, fix a flaw, adjust the listing price and/or revise the sales strategy. As an unrepresented seller, you do not have access to this continuous feedback loop to help you modify your selling strategy (if you have one).

Now, fast-forward: once you have a potential buyer, how can you be assured that they are well qualified financially to purchase your home? You will also have to attend the home inspection(s), lender appraisals, track buyer adherence to contingency dates and are responsible for overall project management of both sets of attorneys, the buyer’s lender, and a host of other players to ensure a smooth, on-time closing.

After reading this article, is there any remaining doubt in your mind that paying a Realtor 5% or 6% of the sales price of your home for all these services is money well spent, especially when your home has a good chance of selling for approximately 23% more than it would if you try to go it alone? If so, please feel free to contact me for additional information.