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Posted: 6:00 a.m. Wednesday, May 28, 2014

The Pros And Cons Of For Sale By Owner

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By Clark Howard

ClarkHoward.com


With all the technology out there for home buyers and sellers, do real estate agents really matter anymore?

For buyers, the research you can do online and with your phone is amazing. Apps like Redfin and HomeSnap will let you drive down a street, pull out your smartphone, aim it a house and snap a picture. Based on your GPS coordinates, the apps will tell you almost everything about that property. You don't even need to know which street you're on!

So the information revolution is empowering people who are looking for a home. At the same time, a Choice Home Warranty survey found that more than two-thirds of Americans don't trust real estate agents.

Real estate agents are salespeople. They try to get the deal done. Sometimes an agent has to be part shrink and part salesperson to shepherd a deal across the finish line. Maybe times you may feel like an agent is not there for you because they try to get the deal done.

Here's a look at the pros and cons of FSBOs

So time and time again, I get the question: With all the technology out there to help you and get you listed on the MLS, should you do a FSBO (for sale by owner)?

My answer depends. If you have the personality of a merchant and can embark on a well-planned sales and marketing campaign; if you can drop everything to sell the home; if you can have thick skin when a potential buyer looking at your house disses your decorating or whatever it may be, then maybe you're OK to try to sell your home yourself.

But selling your home yourself is more than just getting a "HOME FOR SALE" sign in the yard. You need to have a sales plan. And be smart about it: Even if you're trying to cut the commission out, always put 'Agents Protected' on your sign.

If you're going to go the strict FSBO route, you can list your property on the MLS free of charge and get more info on sites like Owners.com and FSBOGuide.com.

A compromise might be other alternatives out there like the hybrid services from RedFin and YourIgloo.com (a flat-fee MLS listing service) that allow you to pay fees or much lower commissions for a package of services or for individual services. For example, maybe you're busy and want the agency to do a showing for you, then you pay a fee for that. I think the hybrid methods beat the true FSBO route.

What's the best time of year to list your home?

People often think of listing a home sometime during April, May, or June. The idea is that listing in the spring during prime selling season will get you the highest price.

Yet syndicated financial writer Kenneth Harney says that's actually not true. In city after city, starting a new listing in winter will actually get you a higher amount of money for the sale of your home on average. Every home is different, of course.

The reason is that home prices actually peak in late winter/early spring when the least number of properties are on the market, but people are already out looking.

So you'll make more money by avoiding the common wisdom.

On the other hand, older listings that have sat on the market can be a real deal for buyers once they hit Nov. 1. That's because sellers tend to capitulate particularly if they're still on the market around the holidays. They become 'motivated sellers' in the terminology of the industry.

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