I got a call from a very old friend a while back to let me know that he was going to be selling his home without the help of a REALTOR®. The fact that he called to let me know was appreciated as I usually found out the hard way.
The hard way being just sitting down with a cup of coffee, pulling up Facebook and scrolling through the morning friend update. Wedged in between the birthday wishes and Mannequin Challenge videos is a post from one of my friends announcing the sale of their home, without an agent.
Of course I go through the appropriate 5 stages of grief.
- Denial: This isn’t happening!
- Anger: How could they do this?
- Bargaining: If I had only talked to them a few weeks ago, everything could have been different.
- Depression: Multiple visits to Krispy Kreme
- Acceptance: I’m sure it will all work out for them.
And yes, sometimes it does. 500,000 people sell homes themselves every year. The results of those sales however may vary.
My long time friend was convinced that he had everything he needed thanks to the internet and as much as he loved and respected what I do for a living he was all set. I told him that I would be happy to accept his decision if he gave me the opportunity to present some key points to consider.
As friends will do there was a wager involved, mainly involving the release of some very embarrassing information to my wife. Safe to say a lot was on the line. I put my REALTOR® hat on and went to work.
1. Pricing
This is where the journey begins and it could not be important. The price you set for your home sets the tone for the entire transaction. When you are selling your own home you have the unfortunate bias and emotional connection to what is being valued. This can cloud your judgement (surprise, surprise) on what your home is truly worth.
A REALTOR® will take a more strategic approach to coming to your home’s value. Study recent sales and using more comprehensive metrics on how those homes compare to yours requires experience and courage to be done right. This is something good agents do every day and with that comes applied knowledge that they take to every property they evaluate.
This is even more crucial when a more unique home is the subject. Yes, a tract home is going to have a ‘model match’ that has sold recently to give you some solid ground to stand on. However, when taking a stab at figuring the value of a custom built home, maybe one on some land, that can be a lot more complicated and if done wrong could leave a lot of money, your money, on the table and in the pocket of your buyer happy to buy it at ‘your price’.
2. Marketing
The internet has definitely revolutionized the real estate industry. It has brought a world of information to the fingertips of would-be-sellers. This information can be powerful, but can lead to overload and get lost in translation. It is very easy to get seduced with tools like Zillow, Trulia, Craigslist and think that with a simple post of your home on these sites with pictures shot with your iPhone straight up and down that you can find the perfect buyer for your home.
In some cases it can be this simple and it does happen, however if you’ve not priced your home well (see reason 1 above) or have a home that requires a more aggressive or targeted marketing approach to find your buyer you might be selling your home short.
In my experience it requires a comprehensive marketing strategy that includes leveraging social media, networking with other agents, professional photography and videography, and sometimes very creative ideas to get a home sold to the right buyer for top dollar. These services are at no extra cost the seller, but come at an incredible value to attract potential buyers. Marketing being one of my specialities I treat every home I represent as its own storefront that needs to stand out from the competition and build a strategy unique to it. Putting your home online might get you a lot of looks, but not a lot of bites.
3. Negotiating
There are many tense moments in the life of a real estate transaction, none tenser than when it comes time to negotiate. Whether it be find a sales price to agree on, haggling over repairs, and the feared appraisal not coming in at value (see Turn 7 on my post about the home buying process).
One of the first rules of negotiation is to free yourself from emotion. If you have too much invested in the outcome it can cloud your judgement and get in the way of you reaching a beneficial compromise. When the buyer starts using your choice of granite countertops or your patchy electrical work as a reason to pay less for the house you can see how that discussion might not be free from emotion. The truth of the matter is that you might not really like your buyer personally, but they are the ones who want to buy your home and trying to find a way to bury those negative feelings during a high energy negotiation might not bring the best result.
Working to keep all parties calm, focused, and with their best interests at heart is what skilled agents do every day. It is very easy for a deal to go from good to yelling match in the driveway with a single word. Aside from that, sellers might be so focused on just closing the sale that they might not stand up for themselves at the right time and regret doing so when they get their closing check. It helps to have someone on your side, negotiation skills in hand, that will keep your stress level low and your closing check high.
4. Escrow/Closing
This is the scary part. The legal ramifications of a sale going wrong in a legal sense are terrifying. It is why, every few months, the series of forms that we use for transactions get longer and full of more legalese because of the many lawsuits that transpire every year.
As a seller there is a legal responsibility to fully disclose everything you know about the property. If this is not done correctly or to the appropriate detail a buyer has the grounds to sue you and without the proper documentation to protect you, you will lose. This could sound like the opening to a twisted Stephen King novel involving a clown who likes to invest in real estate and terrify his victims with baseless lawsuits, but unfortunately this happens more often than not.
My closing team consists of a transaction coordinator and two full-time compliance officers. They work with me to review every single document for accuracy during the course of the transaction. I can’t stress how important these additional sets of eyes are. We know the steps and guide our clients, providing protections from the clowns out there. This careful review can be the difference between selling your home successfully and a gavel dropping not in your favor. A risk that only you can decide if worth taking.
Hire A Professional (Always)
When presented with the above 4 reasons my friend thankfully reconsidered and sold his home in record time at a great price. During the transaction he even mentioned a few of these points, thanking me profusely for saving him from the potential pitfalls.
When it comes to my taxes, a business contract, or even my haircut I’m very happy to hire a professional to make sure it is done right. The consequences can hurt your pocketbook, reputation, and your ego. Even if it isn’t me, make sure you hire a REALTOR to sell your home. You won’t regret it.
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