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'For Sale by Owner' -- Risks You Need to Know

Wednesday, August 16, 2017   /   by Brooke Cole

'For Sale by Owner' -- Risks You Need to Know

You've heard it before and you will hear it again! There are risks to selling your own property!
Of course, as REALTORs we want you to work with us, but we also care about the people in our community. We want to make sure you are protected.

Some things to consider before you put up that FSBO sign....

Are you really saving any time on your FSBO?
Do you know who to call if you have a question?
Are you available at any time for showings? How mad will you be when you find out they aren't even serious buyers? Did you know they weren't pre-approved for a mortgage?
Do you have time to plan your marketing strategy?
How long can you wait for it to sell?

According to Zillow, "An attorney not familiar with real estate processes and closing procedures could cost you hundreds of dollars and delay the closing."

Are you really saving money on your FSBO?
Want to price it right? Appraisals can cost hundreds of dollars.
Want someone to review the legal documents? Lawyers ain't cheap. God forbid -- Lawsuits ain't cheap either.
Want to spruce the place up? Sure, some updates add value, but how much? Do you know when to draw the line? When is the house over-improved?

According to the National Association of REALTORs, in 2015, FSBOs sold for about 16 percent less of the sales price, for a median sales price of $210,000. Meanwhile, agent-assisted homes sold for $249,000. 
To make matters worse --
In the same REPORT, NAR said, If the FSBO seller sold to someone he or she knew, the median price dropped to $151,900.
Let's just compare $249k to $151,900. That's more than a $97,000 difference!

Not as many people will see your listing. Yes, there will be drive-by inquiries and neighbors calling. However, is that enough? Maybe you plan to market it on social media a little. That will help, but consider the groups you are in on Facebook. Don't you turn off the notifications? There's a chance many of those group members never see your post. Now consider how many people will see the listing when a brokerage posts the listing on Facebook. The office likely has followers and has the ability to run ads to drastically improve the number of views. Of course there is the obvious -- Multiple Listings Service (MLS), which REALTORs have access to. When added there, all local REALTORs have the ability to send it to their buyers. It also will appear on numerous other sites like Realtor.com, Zillow, Trulia, and the list goes on and on. Plus, The Cole Team creates flyers for our snazzy office lighting display, runs advertisements for our seller listings in several, popular local magazines, and sends the property information out to our database of nearly 6,000 buyers.
Also consider how much you are willing to spend to advertise. The Cole Team pays for those ads. We also pay for a professional photographer to take photos of your house, condo, duplex (whatever it may be). This ensures potential buyers will see your property in the best possible light. Cell phone photos won't cut it. Buyers want to see those beautiful drone pictures by our photographer!

What about legal trouble?
Would you know if you did something outside of the law?
What are you obligated to disclose?
Do you know about disclosure requirements? Seller Property Disclosure? Defective Drywall Disclosure? Lead-Based Paint Disclosure? And so on...
Are there any nearby environmental safety hazards? How sure are you about that?
What's your responsibility? Can you prepare the proper paperwork, legal forms, etc. Do you know what to do with the buyer's earnest money?
Do you know title and deed requirements?

Data from NAR survey shows that less than 10 percent of sales are FSBOs.

What you may see at the end...
Have you seen the net sheet? Do you know how it all works?
Owner's Title Insurance
Settlement/Closing Fee
Title Search
Examination Fee
Taxes Proration
Copy, Courier, and Express Fees
Attorney's Fees
Doc Stamps Tax on Deed
Recording Satisfaction of Mortgage
Home Warranty
HOA Fee Prorations
Repair Contingency

What's your estimated net?

How comfortable are you with the items on that list?
It's totally understandable not to want to have to dish out the commission fee when it comes time for closing.
Just consider, REALTORs went to school for this, became licensed in this! The Cole Team believes in continuing education to keep you safe!

Ultimately, the question to ask yourself is how quickly do you want to sell your property? And what risks are you willing to take to do it?
The Cole Team's goal is to help you sell it as quickly as possible, for what it's worth, with the least amount of inconvenience to you!

Hopefully I've sparked some inspiration!
Call The Cole Team today at 239-841-HOME(4663) or 239-542-3332
If you are interested in a free Comparative Market Analysis on YOUR home, continue the process here.
In case we haven't mentioned it, The Cole Team has nearly 50 years of experience here in SWFL!

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