The Perils of Selling a Home by Owner

Selling your home by yourself can be a costly and dangerous proposition.

.

Strangers in your house?

A person doesn’t need much of an imagination to consider what danger awaits them on the porch when opening their front door to strangers. Do you generally just open your doors to anyone that knocks? Criminals have ways to make you do just that, willingly.

Thieves and thugs know who to prey on and for-sale-by-owner (FSBO) listings offer an easy target. They make a quick phone call; it might go something like this. “Hi, my name is Dave,” the excited voice begins, “and your home is just what we’ve been looking for. Can my wife Mary and I come over and take a look at it?” You, anxious to sell, agree to meet them say, oh around 7:30. After all, you have their names and their phone number is on caller ID. But are you safe?

The caller could use a prepaid phone, and prepaid phones are very hard to trace; criminals know that and use them frequently. Here’s an article from Crime Time on the subject. There are plenty more articles about prepaid phones if you search for them. Nowadays it means nothing just because you have their phone number.

“Dave” may show up with a friend, or a few friends, none of which are his wife Mary. Once they’re inside your home, there’s no turning back.

Your chances of being a victim of serious violent crime isn’t as great as say losing jewelry or other valuables, being tied up, beaten and robbed, but the possibility of something far more serious is obvious. Add to that exposing your family, children, grandchildren to strangers in your house. Is it worth it?

Pricing your home.

Many people believe they know the value of their home. There’s a lot of information on the internet about home values, known as an AVM. A person just needs to Google their address and voilà, there’s your price. But is it accurate?

An AVM uses what’s known as an algorithm. It pulls public information from county property appraisers, recently sold homes in your area regardless if they were foreclosures, short sales or other distressed properties and other automatic methods. The problem is, the algorithm is only as good as the information it finds. No one from these websites have ever been to your home, or any for that matter, and only display a “best guess” based on the available information. What does that mean for you?

The most important part of pricing a home correctly involves actually visiting it, researching added upgrades, neighborhood condition such as recently paved streets, utility upgrades, etc. If you recently added a pool, the algorithm doesn’t know about it because it doesn’t search permits. The same is true for any upgrades you may have added. Algorithm’s can’t see how nice your yard is or what the neighbor’s house looks like.

The real estate industry views AVM’s as entertainment for the most part. Many websites want you to believe it’s accurate, but that’s far from the truth. You could lose thousands of dollars if you price your home too low, or never get a “bite” if the AVM is way too high.

Real Estate Laws.

Many states, including Florida, have strict laws regarding the sale of real property. What you disclose to a potential buyer, or more importantly, what you don’t disclose can lead to expensive litigation and hefty fines if the court finds you guilty of misrepresentation of facts that affect the value or safety of the home. Consumer protection laws have minimized Caveat Emptor, “let the buyer beware,”  replacing it with Caveat Venditor, “let the seller beware.”

Marketing.

Marketing your home properly is vital if you want to sell quickly for the best price. Oh sure, there are websites you can advertise on for free, some claiming they get millions of “hits” each month. Here’s the truth. About five million properties sell in the U.S. each year, or about four-hundred thousand a month. According to a recent study by the National Association of Realtors, about 9% of homes sold were for sale by owner, which equates to about 700 each month per state. 44% of those were sold to someone they knew, leaving less than 400 homes sold by other means. As for millions of website hits? Well, they don’t mean much do they.

Buyer’s ability to purchase.

If you get an offer to purchase, what type of financing will you accept? FHA, VA and conventional all have specific guidelines and criteria. What happens if your home doesn’t appraise or the buyer backs out for some reason. Who keeps the deposit, or did you even secure a deposit? What about closing costs? Who’s paying for what?

There are so many variables that can kill a deal or end up in court as well as plenty of laws that protect consumers. If these laws aren’t followed or are violated, you could end up paying a buyer large sums of money and not sell your home.

In conclusion. 

There’s no doubt people sell their homes themselves successfully each month, but is it right for you? Only you know the answer to that question and I urge you to give it a lot of thought before proceeding as a FSBO.

Feel free to contact the Warm Realty Team of Sun Realty, serving Sarasota & Charlotte County, Florida for information about listing your home through us. Contact Us today

Here’s a short video for you to watch.

 

 

Submit a Comment

Translate »