Stories and Education From Roby Robertson - Realtor - Broker Owner Carolina Living Real Estate
There are many benefits to working with a real estate professional when selling your house. During challenging times, like what we face today, it becomes even more important to have an expert you trust to help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale by Owner (FSBO), it’s critical to consider the following:
Your family’s safety should always come first, and that’s more crucial than ever given the current health situation in our country. When you FSBO, it is incredibly difficult to control entry into your home. A real estate professional will have the proper protocols in place to protect not only your belongings but your family’s health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization during and after a showing, and even facilitating virtual tours for buyers, real estate professionals are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) to help protect you and your family.
Recent studies from NAR have shown that, even before COVID-19, the first step 44% of all buyers took when looking for a home was to search online. Throughout the process, that number jumps to 93%. Today, those numbers have grown exponentially. Most real estate agents have developed a strong Internet and social media strategy to promote the sale of your house. Have you?
Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:
As part of their training, agents are taught how to negotiate every aspect of the real estate transaction and how to mediate the emotions felt by buyers looking to make what is probably the largest purchase of their lives.
Having a buyer who wants to purchase your house is the first step. Making sure they can afford to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage process of your buyer. A real estate professional is trained to ask the appropriate questions and, in most cases, will be intimately aware of the progress being made toward a purchaser’s mortgage commitment.
Further complicating the situation is how the current mortgage market is rapidly evolving because of the number of families out of work and in mortgage forbearance. A loan program that was available yesterday could be gone tomorrow. You need someone who is working with lenders every day to guarantee your buyer makes it to the closing table.
The documentation involved in the selling process has increased dramatically as more and more disclosures and regulations have become mandatory. In an increasingly litigious society, the agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
Many homeowners believe they’ll save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save on the commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”
The more buyers that view a home, the greater the chance a bidding war will take place.
Listing on your own leaves you to manage the entire transaction by yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.
Had an interesting scenario recently that I felt I should share. As you know our NC contracts come with a due diligence period. This is intended to allow the buyer to do inspections, complete loan process etc. One aspect of negotiations is the due diligence period and the amount of time the seller allows the buyer to essentially take the property off the market. Here is why:
Say Buyer Smith enters into a contract and both parties agree to a 30 day due diligence period. Buyer gives the seller $500 for due diligence fee and $5000 for earnest money deposit. ( this is not a good contract for seller by the way ). Things go along and on the 29th day the buyer sends a termination of contract and return earnest money deposit to the seller. As you can imagine, the seller is none too happy and refuses to sign.
However, while the seller may be trying to hold up the buyer getting his earnest money deposit the contract he/her signed has already implied an agreement to allow termination by agreeing to the due diligence period. It really does not matter if they sign the termination. The buyer will get his/her funds back. The attorneys with the Real Estate Commission have confirmed this to us as we recently dealt with this situation.
If you have any questions about this or other subjects, please email Roby
“May you see sunshine where others see shadows, and opportunities where others see obstacles.”
– Unknown
I showed this buyer (we will call him Joey) and his family numerous homes on Lake Norman. This went on for a few months. I won't get into the details of these showings but it was eventful! Ultimately Joey decided he needed to find a waterfront lot so he could built what he wanted.
After viewing and evaluating numerous pieced of property, we finally found the right one. Like many lots on Lake Norman at this time, there was an old home that would ultimately need to be take down to replace with a new one. The good news is that you could hire the fire department to do a control burn of the home if it fit the right criteria and you could get some sort of tax credit for allowing this to happen. (more on that later).
We found out the property was now owned by a 73 year old man that had just lost his brother and inherited it. Interestingly as I came to find out, my client low balls everything so it took numerous attempts to get this under contract. The brother now owning the property would not negotiate because he was smart and his explanation (which I thought was classic) "THEY ARE NOT BUILDING ANY MORE LAND ON THIS LAKE!!!"
Ultimately my client was in the first phase of angry because he had to pay the sellers price!!
So the process began. The buyer did 2 things but I told him in the wrong order or actually should have delayed one of them. He applied for a loan which prompted an appraisal. While he waited he paid an engineer to mark the septic tank and repair area to ensure he could build the home he wanted. He paid this person somewhere in the range of $500 to $1000 to do this. This engineer marked all the sites with different color markers in the yard. Low and behold the appraisal came back and did not appraise to the purchase price. The seller refused to lower the price ( see explanation above).
Now we enter phase two of buyers anger level. He cancelled the contract in a fit of rage and subsequently went to the lot and started pulling up all the septic markers at the house. While doing this 2 new buyers came to look at the lot and he basically scared them away by ranting about the seller and the appraisal.
Now the buyer really wanted this lot because it was awesome with deep water so he ultimately agreed to pay the sellers price and make up the difference with cash. He was not hurting for money!!
So once the loan is approved we go to closing. The buyer is still SO angry at the seller that the closing attorney has to separate buyer and seller in different rooms ( remember seller is 73 years old). When Joey enters the conference room, he THROWS the contract at me and states the seller is in breach of contract because the property was not in the same condition as when he bought it. NOTE: the complaint was that he had not mowed the grass!!! I said to Joey, aren't you having a control burn tomorrow which will result in firetrucks being all over the yard with lots of water!!! He ignored this because the man was in a rage. His wife and daughter would not make eye contact with embarrassment.
This story ends with me getting up from my seat and going to the waiting area to talk to the attorney. I told him that I had enough of this guy and gave him my card. I told him if he needed anything from me to get this done, I will fulfill my obligation and assist but I would not spend another minute with that $##$@. Thankfully I have never seen or heard from him again.
Moral of the story: Be kind to one another and remember anger is just a waste of time!
