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For Sale by Owner frustration

In today’s market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers.

Here are five reasons:

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

2. Exposure to Prospective Purchasers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

3. Results Come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspaper

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t mean that an agent can get $27,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

 

Resources: NAR, Keeping Current Matters

House paint choices

Choosing the wrong paint color can be a big turn-off to potential home buyers.

1. Painting a ceiling a flat white color. “I never paint a ceiling dead white because all white paint has a bit of gray in it, and it takes the room down,” designer Athalie Derse told House Beautiful. Instead, she suggests choosing a cream shade.

2. Too many colors from room to room. Some home owners may opt for a different color scheme for each room. “Even when I don’t use the same colors everywhere, I still like the rooms to feel connected,” designer Mona Ross Berman says. “The bedroom should never feel like it’s in a completely different house than the living room. The whole house has to make sense as one.”

3. Using the same color palette for the entire house. On the flip side, home owners who only stick to one color palette may be making the home too bland. “A two-color scheme can be great, but there has to be some relief, or it comes across as too pat and makes everything seem stiff,” says designer Tom Scheerer.

4. Matching too much. “You never want to match your walls to a color in one of your fabrics,” designer Sallie Giordano says. “It will be too strong. Find a grayed-out version of the color.”

5. Use neutrals to balance out color. Some home owners may be tempted to go overboard with one color. “The biggest mistake people make when they’re trying to be colorful and exciting is to forget that you need to balance it with neutrals,” says designer Todd Klein. He adds that architectural elements in white or even a few gray throws can give visitors’ eyes a place to rest.

Source: “The 9 Paint Color Mistakes You Should Never Make,” House Beautiful (August 2015)

Lease agreement

We often promote homeownership over renting when a family is ready, willing and able to purchase. There are both financial and non-financial benefits to owning a home of your own. Based on the headlines below, many news outlets agreed with us after they reviewed a recent report from the Harvard Joint Center for Housing Studies and Enterprise Community Partners.

The study states that the number of households spending 50% or more of their income on rent is expected to rise by over ten percent in the next decade. They concluded:

“Overall, this white paper projects a fairly bleak picture of severe renter burdens across the US for the coming decade.”

What do other experts think of the report? You can tell by the headlines they chose to introduce their stories:

“Renters, get ready to take it on the chin” – CNBC

“The Rent Crisis Is About to Get a Lot Worse” – Bloomberg Business

“Renters Will Continue to Struggle for the Next Decade” – World Street Journal

“Why the renting crisis could be about to get a lot worse” – Fortune Magazine

“Soaring rents are a problem that will only get worse” – Business Insider

“High rents are here to stay” – The Real Deal

Bottom Line

If you are thinking about buying a home and are financially positioned to do so, now may be better than later.

You can download the entire white paper here:

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