Now that the market in Southern California is improving and there are a good number of equity (normal) sales in inventory, I’ve noticed a surge in the number of For Sale by Owners (FSBO’s) and discount brokerage listings. Since prices are still down, these equity sellers are trying to squeeze every dollar they can out of their homes, which is totally understandable. I’ve got absolutely nothing against anyone who wants to save money. I love to save money. The truth of the matter is, going with a discount,MLS entry-only broker or FSBO can cost a seller thousands of dollars! “But I’m saving thousands of dollars by not hiring a full service agent to sell my home…right?” WRONG! No offense to anyone, but unless you’ve sold dozens of homes recently, you don’t know what you are doing.

Little things you don’t think about will cost you money. I recently sold a FSBO property to a buyer client of mine and we got the property for $25,000 less than we should have been able to because the owner didn’t know what they were doing. They were the nicest people in the world, but they had no clue how to sell a home. “But I’m getting free advice from a family member who’s got a real estate licence…” So what! If your family member doesn’t live and work in the area where you are selling, they don’t know how to properly price your home.

Improper pricing is the biggest mistake FSBO’s make. They usually go to high and wind up chasing  down the market, but sometimes they go too low and could sell for much more. These sellers think they’ve done a great job because they sold quickly and at full price. But, in reality, they could have sold higher if they had had good advise on pricing and negotiation.

So, let’s crunch the numbers. A $500,000 house that is listed FSBO will cost the seller only 2.5-3.0% of the purchase price to pay the buyer’s agent. So, they save the listing agent’s commission… right? WRONG! If a good agent who knows how to market the property and negotiate the deal can get you $525,000 or $535,000 for the property you’ve actually lost $10,000 – $20,000 by selling yourself. The same goes for discount brokers. Discount listings are viewed by the public as discount properties and sell for less!

The moral of the story is; if you are thinking of selling, or wondering what your home is worth, do yourself a huge favor and talk to a real, full-time, professional Realtor. If you think one Realtor is giving you the run around, then talk to more than one. There are plenty of agents to choose from. Don’t approach selling your home with a discount mentality. How would your teeth feel or look if you approached dentistry with a discount mentality. If you have a bad experience with a Realtor, then fire them and hire another. You’ve invested years in your home. Isn’t it worth an extra couple of hours to know you are getting the most out of it when you sell?

Eric Edelman – Century 21 Award Realty

San Diego CA.

http://www.edelmans.com