Las Vegas For Sale By Owner
Are the Risks Worth It?
Most homeowners who attempt to sell without using a real estate agent do so in order to save the commission. In other words, they would like to net more money from the sale and believe they can do so by eliminating the agent commission fees. The irony is that the median price of for-sale-by-owner (FSBO) homes is about 15.4 percent less than the median price for home sales where an agent was involved.
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One risk of selling without an agent is that you sell too low. FSBOs tend to attract buyers who are looking for a bargain. Like FSBO sellers, FSBO buyers want to save money by paying less. The FSBO seller hopes to save the cost of the commission; so does the buyer. Unless the asking price is clearly below market value, a FSBO buyer is likely to think he can negotiate an even lower price because there are no agents that need to be paid.
Another factor contributing to the lower sale price of FSBO properties is that many sell before they even hit the market. The National Association of Realtors reported that about 17 percent of FSBO sellers sold to a relative, friend or neighbor. Nine percent sold to a buyer who contacted the seller directly.
Maximum exposure is the way to ensure that you sell for the best possible price. Multiple offers and higher sale prices are the result of exposing the property to multiple buyers, not simply to a friend or neighbor. A major problem for FSBO sellers is determining what price to ask. If you don't know how much to ask, it's understandable that you might inadvertently leave money on the table by selling too low to the first buyer who expresses serious interest.
HOME SELLER TIP: You may be able to find out what price you should ask by interviewing potential listing agents. However, if you don't expose the property, you'll never know if you could have sold for more on the open market.
There are certainly reasons why you might choose not to openly market a property, even though it means accepting less money at closing. One couple sold to a neighbor in a direct sale that netted them about $50,000 less that they could have received on the open market. But, health and timing considerations made this an acceptable deal. Most sellers, however, won't want to give up a significant profit just to avoid having to pay an agent. In fact, according to the Realtors association, the number of sellers choosing to sell without an agent has decreased in recent years.
FSBO sellers take on other risks. The cost of a commission could be minimal compared to the risk a seller might take for failing to fulfill disclosure and compliance obligations as required by Nevada state law. If you do decide to sell without using an agent, be sure to hire a knowledgeable real estate attorney to help you abide by mandatory disclosure requirements or it could cost you much more than the price of an agent.
Another risk of selling without an agent is that many direct sale transactions never close. Some deals fall apart because the buyers aren't properly qualified for financing before they enter into a purchase contract. A good real estate agent will make sure that you don't accept an offer from a buyer who isn't qualified. Prequalification and preapproval can be accomplished quickly if you know whom to call for assistance and when it's appropriate to do so.
Another reason why many FSBO deals collapse is that there's no one with experience working to move the transaction along and resolve problems when they arise. This often involves negotiations, and it is very hard for buyers and sellers to negotiate directly over sensitive issues without emotional flareups.
And a last, but huge consideration, is: who are you allowing into your home? Not only do you have to make yourself available to show your home at a moment's notice at the convenience of the buyer, but you don't know if that nice looking couple through the peephole are real buyers or thieves looking to target your home by the easy access you are providing. A professional real estate agent has already had their clients vetted through mortgage lenders or by referral, and are bringing over ready, willing and able buyers, not a potential threat.
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