Ask a Realtor: Is being a “For Sale By Owner” seller a good idea?
A look at the value realtors bring to real estate transaction deals, even in a sellers market
Dear Jared and Scott,
With the lower interest rates and buyer demand, I am looking to sell my home of 15 years and buy a newer one in the Vail Valley. Given the current seller’s market and the multiple offers on homes I have heard about, several friends have recommended I list my home on my own and tap into the available virtual tools and save the realtor fees. Since this is new territory for me and also realizing this may be more complex than it seems, would appreciate your input on the value realtors bring and any transaction details I should be aware both during the process and at closing.
Dear FSBO Seller,
You make very valid points and ones we get asked regularly, particularly in a seller’s market. We understand and appreciate your desire to make as much money off your investment as possible. That being said, as you note, there are many variables and “behind the scenes” work that realtors do, which most sellers do not realize until they try to do it themselves.
The Internet and sites such as Zillow can be great tools, but effectively marketing your property and finding the right pool of buyers–even in a seller’s market–goes beyond simply putting it on the MLS and waiting for the buyers to come knocking. Good realtors invest a significant amount of money to market, advertise and help sell your property, which includes access to sophisticated and proprietary technology that allows them to pre-qualify buyers who are looking for your type of home, price range and location. They also invest their time and energy in hosting and promoting open houses and handling showings, which are huge personal time savings for you.
While marketing is a very important component of selling your home, it is only one piece of the transaction and often times the real work begins once you have a buyer.
The list of what a good realtor invests in selling your home is long and detailed so we have condensed it to some key areas. These include:
• Help protect you through contract negotiations when you are trying to sell and buy a home at the same time.
• Expedite the amount of time it takes to close by providing fair market value pricing guidance so you price your home based on the current market, which can change daily.
• Provide input on what to do to get the home ready to list. This includes staging and minor improvements, such as landscaping, paint and other small fixes you can make to greatly enhance your home’s appeal.
• Pre-market your home to generate interest while getting the home ready to list. This is how multiple offer situations are created and a significant benefit a good realtor can provide through his/her personal and professional network.
• Minimize your personal investment time. Most sellers underestimate how much time is involved in getting your home ready to sell, marketing it, handling inquiries, showings, follow up questions and offers, even before working on due diligence and closing documents.
• Arrange and take care of professional photography, video tours and Matterport, a 3D and virtual tour platform that allows out of market or COVID-19 sensitive buyers to view your property online.
• Stage the home, turn lights on and open windows or blinds for any showings.
• Vet any potential buyers and offers. There are a lot of important parts to an offer, not just the price.
• Navigate emotionally challenged situations that inherently come up between the seller and buyer and create some “space” between the two parties.
• Negotiate with any offers that come in to get the best terms and price.
Once you have a contract, this is where more specific work begins, with a good realtor assisting and supporting you with the following:
• Help you select the Title Company and discuss any fees associated with the sale based on the offer accepted.
• Review the Title Commitment and help you navigate through any issues that may arise.
• Negotiate any inspection issues that come up and help you to come up with a resolution.
• Navigate the complexities and coordination of a replacement property while going through inspection items and resolution issues.
• Manage the appraisal process. A “Sellers’ Market” can be the most difficult time to get a timely appraisal and staying on top of this can greatly affect – positively or negatively – how quickly you can close.
• Address any issues that may arise with regard to a buyer’s loan and the likely delays that “will” happen as lenders require more and more information to confirm income to debt ratios.
• Prepare and review all the necessary closing documents from lenders, Title Company and any local/county requirements.
• Coordinate the move out, cleaning, final walkthrough and move into your new house. There are a lot of moving parts on closing day.
This is where working with a local realtor should be a no-brainer as there is no fee or commission involved on the buyer’s side. It is only sellers who pay the commission to the realtors involved in the purchase. It’s always helpful if you have done some online research first on the type of property, price range and location preference before you meet with a realtor so they have a good understanding of your needs and interests and if their area of specialty is a good fit.
If you intend to finance your purchase, connecting with a local, reputable mortgage lender and being prequalified can greatly enhance your chances for success. A good realtor is also there to support and handle all the various legal, appraisal and closing document reviews to make sure everything is in order so closing goes as smoothly as possible.
How to Proceed
Before you make any decisions, interview a few local realtors and take a look at their marketing and sales proposal. Select a local realtor you like and get along with and who you believe has your best interests at heart. This process can get very personal as you will likely be speaking with your realtor every day for a few months.
If you still decide to list and sell your home on your own, understand you will likely be responsible for the realtor commission who represents the buyer. So, in fact, you may only be saving a percentage of the commission fee.
Add this fee and the amount of time you will be required to invest, i.e., out of office time, weekend time and evening hours for showings, follow up, managing and negotiating offers, arranging appraisals, finding a title company and researching all the various legal documents required at closing, and you may find a realtor delivers the best value.
-Scott and Jared
Scott Marino and Jared Saul are 20+ year Vail Valley residents bringing 15 and 12 years’ respective realtor experience to their positions as broker associates with locally owned Berkshire Hathaway HomeServices Colorado Properties. Scott is a member of the highly respected Marino Team, which includes his wife Kari, specializing in the down valley market region including Eagle, Eagle-Ranch and Gypsum. Jared, a Vail and resort market specialist, has been recognized as among the top performing broker associates for Berkshire Hathaway HomeServices nationwide from 2018-2020. Scott can be reached at email@example.com or 970-390-7406 and Jared at firstname.lastname@example.org or 970-343-2111.