By PETER ROSENTHAL, President
V.I.P. Trust Deed Company
I am often asked about the wisdom of selling one’s real estate without a broker. Obviously, commissions on a hypothetical $200,000 property can be $10,000-$12,000 or more and that, theoretically, is a lot of money to waste. The question is, is it really wasted? As I am a real estate professional with over 25 years in the business, you have a right to be suspicious. You figure, “Of course he will say you need a broker.” Actually, the yes or no is far, far more complex than saving money. I really know both sides of the issue, because I sold several properties with and without brokers before I ever had a license. Let’s take a closer look.
Properly marketing a property really takes a variety of skills. If you possess most of these skills or have a friendly Realtor or attorney who can handle missing skills, you have solved most of the problem IF you are lucky enough to put your property on the market at a time when there are more buyers than sellers (seller’s market). The biggest question is, “Are you in a hurry?” Here are some of the factors involved.
Are you a “salesperson type?” Can you converse amicably with a prospective buyer on the phone? Can you “price” your property OBJECTIVELY? The worst problem we all have is thinking that our property is worth more than the one that just sold across the street. Can you expose the property to the market as well as most brokers? This means professional signs, multiple listing service, open houses and–most important–advertising. Is the MLS critical? Perhaps not if you plan to advertise heavily in the local paper and a newspaper of wider coverage. Is somebody available to take the phone inquiries in a professional manner or at least do you have a good answering machine with a well thought out tape? Just imagine a prospective buyer patiently trying to leave a message with your 12 year old child. I don’t know about you, but when my children were 12 years old they were not good message takers. Or what about a prospective buyer hearing an answering machine message that plays loud music and says, “You know what this is and you know what to do.” That is a clever message, but won’t sell your house.
Let me take a break here. I have personally tried to get information from FISBO’s over the last quarter of a century and run into all of the above. First the sign may have been faded and hand written, with a small telephone number. Then I have called the number with no-one home or one of the above two scenarios. How much effort do you really think a buyer wants to go through to get just simple information like how many bedroom, how many bathrooms and how much money?
I know you may think that brokers make huge amounts of money for doing little work. Hopefully I have already given you some pointers. Now let’s continue. Let’s assume for the sake of this discussion that you are in a seller’s market and you have followed all of the above advice with professional signs, good advertising, open houses, REALISTIC pricing and cheerful telephone response. Are you ready to handle all of the technical questions? Hopefully you have prepared a nice flyer for your open houses, listing bedrooms, bathrooms, square footage, lot size, etc. Are you prepared for questions about real estate taxes (buyer’s), school systems, building permits, etc.?
So far you are on a roll. Now comes the offer. This process of offer and counter offer can be totally traumatic for a seller and without professional guidance (attorney or broker), you can get yourself in a very, very bad legal pickle. It would be suicide to sign an offer, even full price, without reviewing the offer and your needs with a REAL ESTATE attorney or real estate professional. Many knowledgeable real estate brokers will offer to assist you for, perhaps, 1-1.5% of the sales price. A real estate broker may also agree to shepherd you right through the escrow period. In any event, it would be absolute suicide for a novice to enter into contractual obligations without professional help. This, of course, assumes that you are a novice in legal and real estate matters. There is only one thing worse than a novice FISBO trying to negotiate a real estate contract with a novice buyer. In this case you have, in effect, the blind leading the blind with all sorts of room for very expensive errors. What is worse than this? Simple. A knowledgeable buyer dealing with a novice seller. Without legal help it would be a cinch for a slick buyer to “tie up” the property of a novice seller. Imagine a seller “stuck” in a contract and trying to cancel it–again, without legal help. The buyer would like nothing better than to tie the property up for six months to a year or more and then force the seller into selling 1-2 years later at the original price.
I am running out of room with this column and haven’t even started on all of the disclosures that MUST be furnished (by law) to the buyer. Failure to comply with the myriad of disclosures, especially the seller’s real property disclosure statement, can cost FAR MORE than a simple commission.
I had intended to answer “yes” to the question of selling it yourself, but as I finish this column it looks more like broker propaganda for “use a Realtor.” Honestly, I didn’t intend it that way and you really can market the property yourself IF you really possess the above referenced skills AND it is a good seller’s market AND you are not in a hurry to sell the property. If you have time and the above qualifications it would never hurt to try it for a while and “see what happens.”
Peter Rosenthal
VIP Trust Deed Company