For sale by owner: Things to consider before you try to sell your own home

For sale by owner: Things to consider before you try to sell your own home

TOLEDO, OH (WTOL) - If you've been in the market to buy a house lately, you know it's a race to snatch up a home. In some cases, houses go under contract in a matter of days.

In a hot seller's market, you may want to save some cash on commission and sell it yourself, but does "For Sale by Owner" really save you money?

The Behams are settling into their new home in Sylvania. Buying the home was half the battle, as they also had to sell their old home.

"You hear a lot of stories, right? So everybody says, 'hey, I sold my house in three days.' Had multiples offers, and the market was kinda hot at the time so I figured it was worth the chance to see what would happen," says homeowner Wes Beham.

Wes says he had legal and real estate advisers, so he thought he'd try his hand at "For Sale By Owner," but he says it didn't really work out the way those stories did.

"No offers. No. A lot of interest. A lot of 'hey, don't flip it to a realtor until I tell you,' a lot of those types of things, but no actual offers," says Wes.

Wes says he got enough interest that he'd stay on the hook to see how each showing would pan out and before he knew it, a month had gone by.

He says it was a lot of effort and time spent going back and forth between houses. Money was also spent on drone video and high-end pictures, all to make his home appealing to a potential buyer.

Plus, he dealt with the stigma of a home listed as "For Sale By Owner."

"I got a lot of questions of, 'well, you're not doing it with a real estate agent, so how would this work?' I don't necessarily have that answer because I have a lot of people who would help me," Wes says.

Dan McQuillen with the Danberry company says while that was an issue for Wes, exposure was another challenge. His home may have been listed on Zillow, but without access to the MLS, he missed out on potential offers.

"Having their listing in the MLS, it's going to get syndicated to tons of other websites so you're going to get a lot more exposure, hopefully more looks, hopefully a lot more offers, higher price," says McQuillen.

Speaking of price, McQuillen says another advantage to listing with an agent is that they're experts in pricing strategy. He says many times, buyers know sellers are saving on commission, so they come in with a lower offer.

In fact, he says in 2016, the average For Sale By Owner home went for $65,000 less than those sold with realtors.

McQuillen says the average realtor commission is between 5 and 7 percent and when it's all said and done, there are a number of factors that could result in a "For Sale By Owner" not keeping those savings.

"For example, do you know which way to pro-rate the taxes? Because that could be a big charge that you're unaware of. Who pays for the title work? That's another big charge. Those are big expenses that if you don't know what you're doing, if it's not negotiated properly, it can cost you more than what the commission does," says McQuillen.

McQuillen says there have also been contracts that fall through because the seller didn't quite know what he or she was doing, which is why he says it's highly recommended to hire an attorney, which comes at a cost.

"What do you do if you have multiple offers? There's a lot of legal pitfalls too. How do you work through that? What if someone has an escalation clause? What if someone wants you to pay buyer's closing costs? There are a lot of things to consider," says McQuillen.

Wes did end up going with a realtor and sold his home in a few weeks.

"So it worked out really well in the end. It worked out," Wes says. He says he probably could have stuck it out, but he just didn't know how long it would take and paying two mortgages isn't fun.

Wes says if you're thinking of doing it, meet with advisers ahead of time and have a plan for how you'll handle offers. He says you have to be prepared to be aggressive.

"The social media, bugging your friends, those types of things. You have to be comfortable with doing that, because one thing I found out is just putting it on Zillow is not enough to get a lot of traffic," says Wes.

If you do plan to list on your own, McQuillen says to be careful of websites like Zillow to get your pricing. He says Zillow doesn't know what the inside of your house looks like, so it can't factor in whether or not you may have an updated kitchen, or other features.

McQuillen also says to not base sale prices off of the tax value listed with the Auditor's Office. He says tax price is not the same as sale price and in fact, you can likely sell your home for much more than the value listed with the Auditor's Office.

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