FSBO - Your Advantages and Disadvantages - Why Shouldn't I Try to Sell My Home by Myself?

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Many homeowners think about selling their home on their own by very few actually attempt it, and you have probably asked yourself, "Why is that?"
The reason why is that it is an extremely time-consuming and often exhausting process, especially if you are also working a full-time job. It's my job to take that burden off your back. I am not discouraging you for attempting to sell it yourself, in fact, in some instances I’ll even recommend it to sellers, but before you do it, I want to encourage you to be sure you understand the advantages and disadvantages of each side.

The main advantage is that you do not have to pay a commission to a realtor and you will have complete control of the transaction.

The disadvantages are that it is a tremendous amount of work and having complete control of the costly and delicate transaction process can result in a deal that falls through or costs you a considerable amount of lost time and money.  Yes, you can get a purchase agreement from the title company and go it alone, however remember this, the title company does not represent you and isn’t responsible for guiding you through the process.  Have you ever wondered why their purchase agreement is only three pages long and ours is eight?  Give me a call and I’ll explain to you why, but before I leave you, consider this news…

Founder and former CEO of ForSalebyOwner.com, Colby Sambrotto listed his 2,000 square foot New York condominium on his own through online classified ads and FSBO sites, but after six months, he opted to hire New York broker Jesse Buckler who immediately advised a price change as the listing was not attracting the right buyer.

After giving up on the DIY route, Sambrotto’s decision to hire a broker led to attracting multiple offers, closing for $150,000 over the original asking price. The Wall Street Journal reports the listing sold for $2.15 million including a 6% commission.

Below are the advantages and disadvantages of FSBOs. Read it carefully and then make your decision!

Advantages of Selling Your Own Home

Of course, the biggest advantage a FSBO is that there's no commission to be paid to a Realtor. You get all the proceeds from the sale, minus any marketing costs you incur.

A second advantage is that you have complete control of the transaction. You don't have to rely on anyone else. You're totally independent.

A third advantage concerns your equity. If it's low, you have the possibility of selling your home without having to write a check.

A fourth advantage is that you don't have to rely on a realtor to schedule showings, answer inquiries, etc.

Disadvantages of Selling Your Own Home

Perhaps the greatest disadvantage is the tremendous amount of time you have to put into the sale.

It's a time-consuming process to do all the paperwork, the marketing and advertising, the showings, etc. by yourself - not to mention the hours it takes to get acquainted with all the legal, financial, and other issues. You must be prepared for this.

A second disadvantage is the costs in terms of marketing and advertising. If you don't exactly what you're doing, this can be very expensive! We spend an enormous amount of research and marketing dollars to invest in the latest technologies that are not available to the average homeowner.

A third disadvantage is that you won't have access to the Multiple Listing Service (MLS). The Multiple Listing Service is only available to licensed Realtors who are MLS board members.  Without access to the MLS, you’re left with few options that will actually get a significant amount of potential buyer traffic and can lead to a very inefficient, ineffective, and frustrating process. 
The fourth disadvantage relates to your knowledge of the market. If you're not knowledgeable about it, you may not price your house correctly.

That is, you may underprice it or overprice it. If you underprice your home, you lose money. If you overprice it, you lose buyers. By the same token, if you do find a buyer and you're not experienced at contract negotiations, you could be taken advantage of.
In Fairbanks, there are many pitfalls throughout the transaction process that can spell disaster for real estate transactions: home inspection requirements and repairs, specific lending requirements, challenging appraisal processes, well and septic inspections, etc.

A fifth disadvantage relates to a belief of some buyers. They believe that since you're selling the house by yourself and not paying a commission, then they're the ones who should get the savings instead of you! There is also a perception that if you’re not using a real estate professional, you may be hiding something with the home and that’s not the perception you’d want to convey. 

My Advice: Do your homework before considering selling your home by yourself! And, if you do decide to go the FSBO route, be fully prepared in all aspects of home sales!
If you'd like more information and advice on selling your own home as well as my real estate services, contact me.

Energy Conservation In Your Home This Winter – Protecting the Environment AND Your Wallet

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One of the most significant money mongers is the heating bill in a home – especially during the coldest winter months.  And one of the best ways to address the heating efficiency in your home is to take a few measures that will ensure efficient running, ending up in less waste and more money in your pocket.  We’ve put together some tips to help get you started this year on the winterizing energy kick you and your house can benefit from:

Seal Gaps In Doors, Windows and Access Points

Many people underestimate the power of proper seals in windows and doors and how keeping a bit of draft out can make all the difference in keeping the home warmer all winter long.  For a few dollars, you can buy a caulking gun and some caulk to re-caulk the draft spaces – plus you can replace door seals if they are corroded. You will be surprised at how much of a difference this change makes.  This is something that should be checked every year, though it may not be necessary to do it each year. The savings can add up to several hundred dollars year-round and also positively affects cooling efficiency during the warmer months.

Get An Energy Audit Performed

Depending on where you live, you can request a free energy audit from agencies that come out and perform a thorough check on your home and its energy use. If you are in the Fairbanks area contact the Golden Valley Electrical Association or GVEA or follow that link for the GVEA's Home$ense Program. You will also benefit with a pack of energy saver light bulbs (usually up to $100 worth of bulbs).  You can find a list of reputable agencies to perform free energy audits here.  All in all, the savings can pile up quickly when you take a few steps to actively reduce energy use in your home.

Have Regular Maintenance and Service Checks Done

By having the major heating and cooling appliances in your home regularly checked and serviced, not only can you prevent major expenses from occurring by catching problems before they surface but you can also preempt any issues from developing.  Keeping your appliances in good working order will result in them running better, producing better results and spending less energy to accomplish these results.

There are many functional and financial advantages to getting energy efficiency upgrades for your furnace system as well.  Minor changes can have a major impact on the amount of money it costs to heat (and cool) your home since fuel costs are significantly reduced.

Harness the Sun’s Energy

Since grade school we have learned about the power of the sun’s energy and this could not be truer in practical life.  A lot of homeowners have no idea of how much warmth they can generate in their home just from the heat from the sun’s rays.  Depending on the position of your home, you can heat up a room quite a bit by keeping the shades open.  Skylights also have a good deal of impact on the heat (and light) of a room.

Cut Back on Excessive Energy Usage

When possible, turn extra lights off, use electrical appliances only when necessary, turn the TV off when it is not being viewed, and set your thermostat on an automatic timed schedule.  These measures and other similar things will reduce the expenditure of energy in your home and you will notice a sizable reduction in your electric and heating bill.  For even more success, get the entire household involved so that it is a collective effort.
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There are myriad ways to conserve on energy.  On the Internet you can find many resources for tips and tricks on how to make adjustments that end up helping to save money while protecting our environment as well.