Expert: Karyn Foley - 5/24/2005

Question
Hello Ms Foley

We have a "For Sale By Owner" question - as in, should we do it?  The problem is, if we hire a realtor to market and sell our home, the sales commission will take a large enough chunk of our home sale profit that we won't have a sufficient downpayment for our next home.

We've looked into some of the 'flat-rate' services like Assist-2-Sell and Help-U-Sell, but we're worried about marketing coverage for a still hefty fee of around $3000.  Their websites are well developed, but will enough potential buyers know where to look?

Is it possible for the lay homeowner to sell themselves and get a home listed on the MLS?

Any advice and direction you can provide is welcome and sincerely appreciated!  We look forward to hearing from you.

Mason & Anne Marie Cannon  

Answer
Dear Mason and Anne Marie:
 Usually an agent can obtain the highest possible price for a property, based upon their years of professional experience.  Plus,they pay for all of the marketing tools and the extensive advertising costs.  They also have a better knowledge of the market, what has sold for what price and the reasons that the price was what it was.  They also, through the multiple listing service, can reach many more thousands of buyers from all over than you can reach through your own efforts.  Plus, when a buyer goes to a home sale through the owner, they usually mentally deduct the sales commission off the top before they even approach making an offer!
 I will make a suggestion I usually would not consider, and that is for you to continue to investigate those companies that do limited service for a reduced commission.  They do not usually do any marketing or advertising in behalf of their clients, but they do put the listing in the multiple listing service in your area.  They usually do not do any negotiating for their clients, but they may provide you with all of the necessary documents necessary to do a sale and the requisite disclosure forms and such.  If you do interview such a company, be certain to get their program provided for you so you know what it is exactly that they will do and what they will not do.  Your accountability and liability may be greater, but the trade off is for you to decided.  After you finish the limited service interviews, see if these fees are not that much under what you would pay for a full service agent or company.

And then, interview three prominent agents from your neighborhood and have them provide a market analysis.  Your equity may be greater than you think.  Also, look into the many loan programs that are available for you.  There are interest only loans, and loans that do not require any money for a down payment:  100% loans.  When you make an offer on a new home, you may request the seller to give you credit back for your non-recurring closing costs as well.
 Have you spoken with your tax advisor?  This input is paramount as well.  Perhaps you can take this direction, or you may even learn that this is not the appropriate time to make the move.
 Good advise from professionals can give you confidence and support.  You will learn a lot which will help make your decisions good ones.  Agents do not charge for their pre-listing appointments, nor would a lender.  The only cost you may have up front is from an accountant.
 If, after you go into all of the above research and interviews, you are still determined to do it yourself, put yourself in touch with a good real estate attorney and ask what the attorney will charge you to quarterback yur transaction, making certain everything is done right, all the proper disclosures handled, and keep you out of trouble after the sale.  This may be a reasonable cost in comparison to a full fledged representative in the real estate field.
 Read as many newspapers, periodicals, and book about real estate so that you become as educated as possible.  Your buyer is probably very sophisticated, and you do not wish to be taken advantage of.
 As you progress in your sale, I may be able to help with general questions, but laws and requirements differ from region to region, state to state, and you may need some one with more local exptertise.
 I wish you good luck, and let me know what happens!
KARYN FOLEY