The megahit movie Home Alone featured some hilarious traps for unsuspecting bad guys. Selling a home alone has just as many pitfalls for unprepared good guys - and there's nothing funny about them.
That's why most of us use a professional real estate agent from the begining. Yet experts say about 15 percent of potential sellers first try to save the agent's commission by doing a For Sale By Owner, commonly called a FSBO (pronounced fizz bow).
Some succeed. Carolyn and J.C. Jones, for example, have sold several homes on their own. However, Carolyn , who heads her own advertising agency, concedes that a lot of time and effort is involved long before they put their house up for sale.
"We study the market before we buy, get a choice location, do the remodeling that will give us a return on our investment and strive to have the most attractive looking yard and home in the community," she says. They also analyze home sales methodically, set their price carefully, hire a lawyer who specializes in real estate, and apply all the professional marketing and negotiating skills they've developed over the years.
Could your FSBO be successful? Perhaps, but keep in mind that many of the 15 percent of would-be FSBO sellers invest time and money in the process, then turn to an agent when sales prospects dwindle. Moreover, agent-assisted sales typically put more money into a seller's pocket than a FSBO, according to studies cited by real estate specialists.
How much more? "On average you net 2-3 percent more--after paying the commission--by using an agent," says Michael W. Owen, a REALTOR&reg; with Arvida Realty. "Your REALTOR&reg; earns that commission--and you do come out ahead."
One big reason is the way shoppers approach FSBOs. "Buyers are looking for a steal when they're going to a FSBO," says Kerry Kelly of National Hallmark Realty. "They automatically deduct a sales commission before they start negotiating. The old saying is true: both sides cannot save the same fee."
There are other major financial and even emotional factors to consider before selling your own home. For example, an agent can give you competitive pricing and marketing edges that would require time, money or both to achieve on your own.
"You can't just talk to the neighbors for real estate pricing information," explains Mollie Bryan, a REALTOR&reg; with The Prudential Florida Realty. "They may say that the Smiths got a price they liked, but that doesn't mean they got their asking price." REALTORS&reg; have updated, comprehensive data on actual sale prices of homes in your area. They'll also give your house a broader exposure to the entire market than you can, especially if they're part of the multiple listing service available only to those displaying the REALTOR&reg; symbol.
"Less than 5 percent of houses actually sell from an ad in the newspaper," notes Bryan.
In addition, never forget you're competing against savvy pros, so you should offer at least some of the many services provided by agents:
Yet even all that isn't the hardest part, say agents. The toughest thing for most sellers on their own is not being able to screen prospective buyers.
It usually starts as an annoyance over time-consuming tours by curious neighbors or financially unqualified visitors. It may include concerns about strangers parading through your home. It often escalates into anger as you hear unflattering comments about your house. Ultimately, it can get downright ugly as negotiations become heated.
"I've been in the business 25 years and I wouldn't sell my own home just for reason of emotion,"says Marie Powell , president of Marie Powell and Associates, Better Homes and Gardens. "I feel you need an in-between person to do your negotiating. We all have sentimental values connected with our home that cloud our judgment."
That's an opinion shared by most veteran real estate salespeople. They believe their expertise and efforts in pricing, marketing and negotiating are well worth their commission. Which brings up a simple question: if most pros won't sell their own homes alone, are you sure you really want to?