Are you tossing around with the idea of listing your home for-sale-by-owner (FSBO)? Before making the decision to go this route, it is important to know the true costs of time and money that it entails. We will cover what you should know about using an FSBO listing to sell your house in New Jersey
1.) Paying Agent Commissions
Many homeowners think that by cutting out the Realtor, they will save thousands of dollars on commissions. Certainly, who doesn’t want to save thousands on commissions and be able to put upwards of 6% back into your pocket? However, more often than not this is more imaginary than actual reality.
When you list your home FSBO on websites like Zillow.com or Trulia.com, it is likely that you will still be working with a real estate agent representing a buyer. The reason why is because most strong and financially credible buyers are already working with an agent. They would prefer to have their agent work with them throughout the closing process for guidance and help along the way. This means you will still be paying some commissions, typically about 2-2.5%. This is important to consider when using the FSBO listing route to sell your house in New Jersey.
2.) Sale Price
The golden rule of selling your home for top dollar in the least amount of time is making sure your home is priced correctly from the very beginning . Your home has to be priced correctly according to its condition and the competition in order to sell, bottom line. Otherwise, you will fail to make a good first impression on buyers and their agents and they will not even step foot through your door. Your house will sit on the market and will end up selling for a lot less when all is said and done. If you are entirely unsure of what your home is worth, then hiring a competent Realtor will pay off. A good Realtor will not only get you more money for your house, but that extra money will help to cover their commission.
Another option is if you are set on going the FSBO route, then you could hire a professional appraiser who will provide a report of market value. Keep in mind that sometimes appraisal values can be different than market values because not all appraisers are created equal. Some are more diligent than others, and some have a better knowledge of the market than others.
It is very important to keep in mind that pricing your home correctly will be key to selling your home, so whether you implore the help of a Realtor or appraiser, it is important to get this aspect right. If not, selling the FSBO route can actually end up costing you in the long-run.
3.) Expect Repair Requests
Another thing you should know about using a FSBO listing to sell your house in New Jersey is buyers will have repair requests and may even ask for credits. More than likely, your attorney’s would be handling these negotiations. Do not be surprised if you find it more difficult to come to terms because the buyers will know that you are saving money on commissions. With that in the back of their mind, they may be more demanding in their requests.
4.) Time Commitments
It is important to keep in mind the necessary time commitment needed to act as your own Realtor. Will you be available to show your house with 24-hour notice, or less? Also, since you will not have an agent working on your behalf to field phone calls, will you be prepared to handle all the marketing calls? These are viable questions to ask yourself if you want to have success selling your home fast at a good price.
Having to vet serious buyers and schedule showings for walkthroughs can be extremely stressful and time-consuming, especially if you already have a full-time job or have family obligations. Making certain you meet any pending deadlines throughout the transaction can also bring added pressure. The paperwork takes time as well, so it’s important to be aware that all of these time-eating responsibilities come along with using an FSBO listing to sell your house in New Jersey
5.) Lost Deals
Buyers using traditional financing can end up wasting your time by failing to qualify for their loan after going through all of the previous steps in a real estate transaction. You have to vet the buyers to make sure they have spoken with a mortgage broker and have obtained a pre-approval. You may also want to vet the mortgage broker to make sure they are credible and can actually close the loan. This qualification process is typically handled by an agent who would refer their client to a competent mortgage professional. However, if agents are not in the picture, then this is another step of the due diligence that you will want to do.
Also, your buyer could have unexpected life changes like a job loss, a change in their credit score, or attempt to take another loan out during the closing process. Honestly, anything can happen during a transaction so be prepared to be flexible and remain calm. One thing you can consider is working with cash-only buyers to avoid having to deal with buyers needing to obtain a mortgage contingency. However, expect that they will try and negotiate a lower price because of the advantages that a cash deal offers.
Using a FSBO listing to sell your house in New Jersey has the potential to be more expensive and time-consuming than expected. Make sure you have done all your homework and be prepared to make a time commitment to the process since you will be acting as your own Realtor. If you would like to investigate a more convenient option such as going the investor route or if you have other questions on using a FSBO listing to sell your home, send us a message or call (908) 547-0404 today!