Homeowners invest a lot in their properties, not only in money, but in time and energy spent maintaining and upgrading. You naturally want to see the greatest possible return when it comes time to sell. Some homeowners looking to cut out the middle man and eliminate the commission a real estate agent earns opt to go the FSBO, or “for sale by owner” route.
Unfortunately, FSBO properties can pose certain risks, for both sellers and buyers. Homeowners think they’ll see higher profits and buyers could get a steal on a property, but the likelihood of either of these outcomes is actually pretty slim. Here are just a few risks you face with FSBO properties, and why it’s probably better to work with a trained professional when buying or selling a home.
Risks for Sellers:
There are two major problems for sellers who choose to go it alone. First, they won’t have a real estate agent promoting their property. Realtors have access to MLS sites that attract buyers and they’ll put together advertising packets that show your home in the best light.
The second issue is that other realtors may show their buyers only properties that are properly represented by professionals. This could significantly reduce interest in your property and opportunities to make a sale.
One of the most important functions a realtor performs is properly pricing your home, in keeping with comparable sales in your area and with attention to your goals (speedy sale versus maximum profit, for example). As a layman, it’s a good bet you’ll price your property wrong and end up leaving money on the table, or failing to make a sale at all.
Trouble with Finalizing a Sale
As a seller, you could end up facing all kinds of pitfalls, like sellers that back out, that can’t get loan approval, or that make outrageous demands before finalizing a sale. There are also legal issues to watch out for, namely the responsibility for making disclosures. An experienced Sioux Falls realtor can help you to navigate these roadblocks and finalize a favorable and legal sale.
Risks for Buyers:
When two realtors get together to hash out a deal for a home sale, the buying agent tries to get the lowest price and the most concessions for the buyer, while the selling agent tries to get the greatest profit for the seller. These negotiations proceed in a fairly straightforward manner until an agreement is reached. When negotiating with the seller directly, this process can fall apart if the seller gets emotional, if other bids are on the table, or for a number of other reasons, because you’re not dealing with a professional.
Lack of Disclosure
Every state has laws concerning disclosure, and realtors understand and abide by these rules and regulations. The average homeowner may not have a clue, and as a result, you could end up with a home that has all kinds of problems. While you can certainly sue for reparations down the line for known issues that weren’t disclosed, you’re still stuck cleaning up the mess. When both parties work with qualified Sioux Falls realtors, these types of problems shouldn’t occur.