So…you’ve heard it’s super easy to sell your home without an agent right now…and you’re wondering if that’s a good idea?? Well, maybe. And in this video, I’ll tackle how to handle for sale by owner homes in Madison, MS and what the benefits of hiring a Real Estate agent are!
Everyone knows we’re in a seller’s market, but what does that actually mean? Long story, short, it means there is a supply and demand imbalance…there are more buyers than sellers. And the buyers that I’m working with right now have heard me preach…if you want to get that house that you get emailed to you every morning at 7am on my listing alerts, we have to go see it SAME Day! We cannot wait until the weekend, or sometimes even that night. But, let’s say you’re checking out one of those 3rd party apps that shows homes that are for sale by owner…and you’re already working with an agent…what should you do? I tell my buyers…just send me the address and let me call the seller. I call them and ask them if they are ok working with a buyer’s agent. 9 times out of 10, they are ok with it. And then, if they aren’t, I tell my buyer that. Most buyers are NOT ok going into the largest purchase of their life without representation. And now, I’m going to get on my soapbox for a minute about why you shouldn’t buy a home without an agent! There are 3 BIG reasons why you NEED an agent on your side when buying:
1. Your agent acts as the middleman (ahem woman) throughout the entire contract to closing process. Your agent negotiates on your behalf which can be awkward and difficult when times get tough. And it’s not just agreeing on price. There are 2 other crucial steps after you are under contract that you’ll likely need to negotiate again. That’s the home inspection phase and the appraisal phase. Let’s tackle that first one…so after you get the inspection and that LONG list of repairs that need to be done…now what? Well, that’s where a good seasoned agent can help. I have a list of contractors that can give me a price to fix the issues on the list. I usually make a spreadsheet (this is where being an accountant for years before I became a real estate broker helps) so you (and the seller) know how much money we’re talking about before we negotiate. Letting me be the middleman (and sometimes the bad guy) keeps the transaction moving forward. I can explain to the seller why the items you’ve requested need to be fixed! Then what happens when the house doesn’t appraise? Again, that’s where an experienced agent can help! A lot of folks listing their home, don’t understand how to price it. And if you’re getting a loan for the house, and it doesn’t appraise, that’s when YOU THE BUYER must pony up the cash to make up that difference (assuming you still want the house). Well, if you have a good agent on your side, they already pulled the CLOSED comps and made sure you made an offer that we feel confident will appraise. But, if it doesn’t, your agent can help! Here’s another hint that a lot of you might not know? Have you ever noticed that in Mississippi, you can’t see what a house actually sold for on those 3rd party apps? That’s because MS is a NON DISLCOSURE state. We are one of twelve states that don’t disclose the CLOSED price to the public. The only ones that have access to that info are agents with access to our MLS. So, I can show the seller what other homes in the neighborhood have sold for. Remember, it doesn’t matter what other people are currently ASKING for their home. We only care about what someone actually paid for it!
2. We agents are experts in our area! And if you’re new to an area, you especially need the help of an agent. We can help answer questions about HOA, taxes, expansive clay, schools, insurance….the list goes on and on. I try to get to know my buyers so that I know what areas they will like and which ones they won’t. Then I try to match them to an area that I know fits a lot of what they want. You’ll waste a LOT of time trying to figure this out on your own if you’re not working with an agent from the start!
3. You might miss something crucial! Unless you’ve bought and sold many homes in your lifetime, there are so many things to be on the lookout for when buying. A good agent can help you spot things in the house that need attention. Many buyers are so fixated on the shiny objects when they walk thru a home looking at all they things they like, while a good agent is looking at all the CRUCIAL things like signs of foundation problems, plumbing problems and other things that are costly to fix. Like the ROOF! So many inexperienced buyers forget to look at the roof! Have you bought a roof lately? Let me tell you, they are expensive!!! Then there are steps along the way involving lots of paperwork and financial transactions, that your agent can help you with to make sure they don’t get overlooked! A real estate contract is jam packed full of things that MUST be done by one party or the other, and your agent will keep things on track, so nothing gets missed. A typical home purchased with a mortgage in today’s world takes about 45 days from contract day to closing day. There’s a lot of things that need to be done during that time. So, relax and let your agent do the work!
OK! So what about the seller? Should they list their home FSBO? Well, maybe. It can be very tempting in a seller’s market for the homeowner to want to save money on commissions. And since it’s usually the seller that pays the agents’ commissions, it could make sense. I’ll give you a few things to consider. As the seller, you will have to do all the work for arranging showings (which is easy if you’re home all day), you’ll need to try to keep cool during negotiating, and help navigate the repair phase. And don’t forget, you still need to make sure you’re abiding by local laws….just because you don’t have an agent working for you, doesn’t mean you can skip the home disclosure process. You still must let the buyers know of any known material defects with the home. And keep in mind, you might have a buyers agents call you for permission to show their home. Don’t be too quick to turn a buyer’s agent away, many buyers (for all the reasons I mentioned above), will not feel comfortable without representation. And remember, as the seller, you get to decide how much to pay an agent. So talk to their agent and decide on a percentage or fixed amount and write that into the contract. You’ll likely have a smoother transaction if there’s a real estate agent working in the transaction. Another thing to consider when selling FSBO, is that you don’t have access to the closed comps. Especially in a non-disclosure state like MS, you might be leaving money on the table. Many homes today are selling for over asking. So, let’s say your neighbor has the exact same home as you and they were asking $300k. Without a real estate agent knowing what it sold for, you decide to list your home for $300k as well. If their home is like a lot of homes in this crazy market, it quite possibly sold for $10-$20,000 over asking, which could’ve paid the buyer’s agent and still netted you several thousand more. There have been many studies done that show FSBO’s sell for less than homes on MLS. Part of that reason might be because FSBO’s attract people who are tempted to low ball because they know you don’t have an agent (this happens a lot in a buyers market). And it should go without saying, but if you’re wanting to sell your home quickly, allowing a real estate agent that already has a network built in with other agents and the use of our MLS, there’s no quicker way to get your home in front of buyers.
So, if you want to check the inventory quickly, check out my website www.taylorgroupms.com which is updated to our local MLS every 10 minutes. If you sign up for daily email updates, you will also get a link each morning that shows how fast homes are going to pending status. This is crucial if you’re considering listing your home by owner. You can set up a listing search for your homes price range and area and start to get a feel how fast things are going under contract (and therefore back into which homes are sitting on the market). After all, an over priced home is the biggest mistake most home owners make!
Taylor Realty Group
601-613-9100
