Do-it-yourself sellers may face unforeseen problems
By Don Kirkland
At first glance, selling your home in today’s overheated real estate market sounds like a no-brainer. Paint the walls navajo white, clean up after the dogs, nuke the kids’ bedroom, hang a sign in the yard, and start packing.
With even modest luck, your foosbo will be gone in a month.
But, hey, wait a minute. Is the for-sale-by-owner approach really that simple? Some longtime pros say dangers lurk at many turns, some of which can cost you far more than you’ll save, not only in terms of emotional stress but cold, hard cash.
True, the people expressing these concerns–Realtors themselves–have a stake in whether you use the services of a professional or go it alone.
But they do, after all, have an open window to the increasingly frequent horror stories of people who sold their homes unassisted or opted for store-front practitioners promising discounted help that, when vital services were added later, cost more and provided less.
“Your home is the biggest investment of your life. Selling it is not something that should be trivialized,” advises area Realtor Dana Hubbell.
Although owners who sell without professional representation may have no difficulty whatsoever, the complexities of today’s market don’t guarantee easy deals or transactions that can withstand the intense scrutiny of a litigious society, according to Hubbell, a Re/Max Realtor working extensively in the Kyrene Corridor.
In fact, she says, the current nine-page standard contract will expand to 12 pages in January, providing even more opportunity for an unhappy buyer to sue the seller if a flaw is discovered, sometimes months after the close of escrow.
Legal issues notwithstanding, there are other reasons to let a professional assist with selling your home, suggests Hubbell.
Randy Goff, an owner of ERA/Lucas Realty Group, agrees.
“Some homesellers believe that selling a home is all about the marketing, but what they don’t understand is that a Realtor starts to earn the commission only when the contract has been accepted.”
It is in the post-contract stage of due diligence where the experience of a Realtor really pays off, and the consumer gets real value, Goff says.
Whether to hire a Realtor, employ discounted help or go it alone is a question that arises more during boom times than in tougher housing markets. But making a decision based solely on the amount of the commission is often short sighted, according to Hubbell.
“The question a seller should ask is not how little can I pay a Realtor but how much more money can the Realtor help me get,” she says.
By utilizing their experience in the local market, by understanding pricing strategy and by recommending ways to present the home’s most appealing features, says Hubbell, a professional often can help a seller get more for a home than the seller might have thought possible.
As to steering clear of legal complications, Hubbell recommends that sellers verify a prospective buyer’s financing before accepting an offer and taking the home out of active MLS status.
“We are seeing buyers, particularly investors, who are claiming theirs will be a cash deal, when they really have to borrow money or use a line of credit just like most other buyers,” Hubbell said.
If the buyer doesn’t qualify, the seller has lost valuable time and money, and can be confronted with starting all over again.
Changes in state law involving homeowner associations also have created potential trouble spots for sellers, as have policies that affect a buyer’s ability to get insurance.
“Realtors are in the business to know these things,” says Hubbell. “What a Realtor can do is more than just hang up the sign and put the listing in MLS. Unfortunately, some sellers don’t think about the subtleties until they’ve had a bad experience.”
Lucas Realty’s Goff offers similar advice.
“It’s unfortunate if the (unrepresented) seller relies only on the latest comps (prices of nearby homes that have sold recently) to establish an asking price,” says Goff.
“Comps are a starting place, but we’re in a crazy market and you can see large jumps. It used to be that you’d see increases of $2,000 or $4,000. Now it can jump $5,000 to $20,000,” he says.
“That’s something the seller needs to know.”
Like Hubbell, Goff acknowledges the potential dangers of selling without representation.
“Things like mold issues or excessive previous insurance claims may not come to light until the new owner learns that the underwriter won’t issue a policy,” he says. This is why experienced Realtors will order a CLUE (Comprehensive Loss Underwriting Exchange) report and follow other standard procedures before the close of escrow, he says.
Additionally, says Goff, a Realtor can generally gauge, based on condition and price, whether your home will sell quickly or not.
“If it will sell quickly, you may have the option of not having to make a contingent offer on your next home—a huge advantage in his market,” he says.
In addition to providing counsel to home sellers, Goff says, most Realtors have the ability to offer properties for viewing on the Internet, through such advances as virtual tours.“We estimate that three of every four buyers today start their search on the Web. That speeds up the process and is consistent with the tremendous velocity we’re seeing in the marketplace. It’s just an incredible pace.”