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What are the Pros and Cons of Listing Your Home for Sale by Owner?

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We live in a “Do-It-Yourself” culture. With the internet and its vast resources, people can teach themselves to do just about everything on their own now and save thousands of dollars while doing so. You can use the internet to self-publish your novel, completely redo your entire kitchen, or list your home for sale.

For Sale By Owner, is a growing phenomenon in real estate, and it is the top choice of many people looking to sell their home.

What Does “For Sale by Owner” Mean?

When someone lists a house as “For Sale by Owner,’ it simply means that the homeowner is listing the house without any assistance from a real estate agency. Instead, the home is being directly listed and sold by the owner of the home. This means that everything in the process that would previously go through an agency including but not limited to, inspections, negotiations, open houses, and showings, will instead be handled by the owner of the home.

Like most business strategies, there are both pros and cons to choosing to sell a home For Sale by Owner.

Pros

  1. Opportunity to Save on Costs– The number one reason many sellers choose to sell their homes themselves, rather than include a real estate agent in the transaction, is to save on costs and get more money out of the sale. In most real estate transactions, the real estate agent is paid for their work by collecting a percentage of the total sale. Without a real estate agent conducting the sale, the sellers will not need to pay a commission.
  2. More Control of the Sale and Negotiations– When an offer is accepted on a home, and the inspection is conducted, a new game of “back and forth” begins as the buyer and seller negotiate until they agree to a deal that both believe to be fair. In some cases, this can be settled in a matter of two emails in a couple of hours. However, in many cases, this back and forth can go on for weeks before both parties come to an agreement. When a real estate agent is involved, this correspondence will go through them before it reaches the seller. Sellers sometimes see the “middle-man” as an extra barrier to the negotiation process. Many people find a more direct approach to negotiations to be a benefit of selling a home without an agent.
  3. May Be More Appealing to Buyers– Just as the above points may appeal to sellers, they may also appeal to the buyers as they are often hoping to purchase, close on, and move into their new home as soon as possible. As a seller, your For Sale by Owner home may appear more attractive to a buyer who is also looking to cut out the extra person in the transaction, and speed up the process.

Cons

  1. May Not Appeal to All Buyers– While some buyers may see a For Sale By Owner home to be an easier process, others may want the guidance of a seller’s agent to help guide the transaction. If this is the case, some buyers may eliminate your home as an option before they even have time to view it. By using a real estate agent, your home will be listed on the Multiple Listing Services (MLS), allowing a vast majority of Buyers the ability to view your home.
  2. Ease of Showing Your Home to Attract more Buyers: When using an agent, the agent will schedule showing and do their best to attract potential buyers to view your home to encourage more traction that will result in an offer.
  3. Higher Risk of Contract Complications– When you use an agent, you will likely be going through the process a professional who has walked through the steps countless times before. Unless you deal with contracts and home negotiations every day, you may not have a clear idea about what specifics to look for, and what loopholes to avoid. Many times, without professional or legal help, you could agree to something you did not intend to.
  4. Could Cost More in Time and Money– While cutting a real estate agent out of the transaction may end up saving you the extra closing costs, it might not always end up saving you money in the end. Many times a real estate agent can advise you through the process, and help you to avoid extra or unnecessary costs. If you are not familiar with the process or the logistics behind it, you could end up spending more money than you save.

Five Steps to Take If you are Thinking About Listing Your Home “For Sale By Owner.”

  1. Research and Understand the Market– First and foremost, you must remember that you will be dealing with experts in the field, and to get the most out of the endeavor, it is essential to make yourself a sort of expert as well. Before you list your home, be sure to research both the market and the process. Be sure to cover all your bases to leave no room for error.
  2. Clean and Organize the Home– Most real estate agents have an eye for the details that need to be changed, fixed, or decorated in a home to appeal to the buyer. They know how to display the home and capture the listings in a way that will generate more interest. Without an agent, this responsibility will fall on you as the seller. Be sure to take the time to present your home in a way that captures the best aspects and appeals to your target.
  3. Look for Platforms to List and Market Your Home– One of the most important aspects of selling a home, with or without an agent, is marketing. Real estate agents have access and experience with all of the most effective marketing and selling platforms for homes. When selling a house as For Sale By Owner, it is important that you do your research and ensure that your house is listed on all of the necessary channels to get it seen.
  4. Consult with a Legal Real Estate Expert– As mentioned before, no matter how much you research the process, it is hard to compete with experts in the business. To avoid signing into a flawed contract, be sure to get an expert’s opinion on the matter.

If you are looking to sell a house For Sale By Owner, but you are looking for a legal eye to review any contracts or documents contact Tannehill Law for legal expertise to assist you in the process every step of the way.

 

Five Reasons Your Chicago House Buying or Selling Experience is Hotter when the Weather is Cold

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The city of Chicago comes alive during the warmer months. People flood to the beach or Wrigley for a day in the sun.

This excitement seems to step down a notch during the winter months. Suddenly, people are rushing from one building to the other to escape the wind. They are curling into their blankets, and only leaving the house when they absolutely have to.

Winter in Chicago isn’t exactly the time that anyone wants to do much of anything, and that includes house searching.

Real Estate simply has more curb appeal in the spring, when the grass starts to get green again and the front foliage begins to fill out, however, what many people don’t acknowledge when looking to buy or sell a house, is all of the benefits they can experience if they choose to pursue the marketing in the winter.

Here are just a few reasons why buying or selling real estate during Chicago’s winter months can be more beneficial than entering the process in the spring/summer months:

Less Competition

Whether buying or selling, winter months become a less desirable time for people to move. As a result the inventory and demand is very low as most buyers and sellers tend to wait out the cold and start the buying and selling process in the springtime.  Less competition in the home search means far less negotiating required of both buyers and sellers. This helps to ensure a much smoother process for all involved.

More Pressure on Both Sellers and Buyers

In most cases, if someone is buying or selling their home during winter months, there is an urgency to move quickly. They may need to relocate, or they may be looking to upgrade to a home that better accommodates a growing family. Regardless of the reasoning, the combination of the need to sell or buy and less demand on the market puts the buyer and seller in a position to move quickly. Transactions with motivated buyers and sellers will often be a little more lenient on price and post-inspection demands. Sellers listing their homes during winter months are likely motivated to sell quickly.  Alternatively, Buyers who are motivated to move during winter months are typically more serious and ready to make reasonable offers.

More Year-Round View of the Home

During the summer months, there is one thing that an inspector can’t determine, and that is how well the house can handle the cold Chicago winters. If you buy a home during the winter, you will know when viewing the house just how well it can handle cold weather. You will be able to see the way the house looks without the disguise of foliage. You will be able to see how well the heater works, and most of all, you will be able to tell very quickly if there are any flaws in the insulation. Many summer buyers face a hard reality, not to mention a large utility bill, in the winter when they find that their new home can’t quite manage in the cold weather the way they did in the summer.

Buying in the winter can help to save you some cold nights and an outrageous bill to fix the heater or flaws in the insulation.

In addition, when selling a house in the summer, your buyer may require more expensive tests to investigate how “winterized” the house may be. This addition in the inspection could end up costing you money, even if the house is insulated and ready for the long winter ahead. When you sell your home in the winter, the buyer will be able to see for themselves just how well the home can handle the harsher weather, and may spare you the extra steps and negotiations in the inspection.

Year-End Bonuses and Taxes

Many find the end of the year, or tax season, to be the best time financially for them to purchase or sell real estate. Many people receive year-end bonuses or are eligible for tax incentives. This money can help with the many financial factors involved in buying a home, from the down payment to any renovations needed before or upon moving into a new home.

This money can also benefit the seller who may be facing real-estate fees, closing costs, or a down payment on a new home.

Start Fresh When Spring Hits

A house is rarely exactly how you want it when you first move in. When you move in during the winter months, it allows you to start fresh in the beginning of spring with landscaping and other yard work and renovations rather than spending your whole summer on these projects. This allows you to have more time to enjoy your new home and yard before the winter returns.

If you are looking to sell your home in the winter, you can benefit from the flip side of this. You will not have to worry about spending money to landscape the home to increase curb appeal for the sale. Most people looking in the wintertime will be looking more at the home itself rather than the money spent on landscaping and foliage.

Buying or selling real estate, no matter the season, is a big decision and can be huge investment for the future. If you are looking to buy or sell real estate but want to ensure that you are getting the fairest deal you can, hire an attorney to review the contract, assist with negotiations, and guide you throughout the process.

Contact Us today, and let us help you with your home-buying process.