Hi, I’m Warren Oberholser. I’m a realtor in the East Bay Tri-Valley area in Northern California. My goal is to help both buyers and sellers get maximum results for one of their biggest investments, their home.
Selling your home without using a realtor, this video is all about the do-it-yourself process of selling your own home. We’ve got a lot to talk about!
Okay, I’m going to start off by addressing the elephant in the room. Can you sell your home without using a realtor? And the answer is Yes-absolutely.
And as a licensed realtor, I’m in the business of helping homeowners sell their residential properties. So that may present a bit of a conflict of interest for this video. However, if you’re that person who’s willing to take it upon themselves to learn and handle all the details involved in the home selling process, then the more power to you.
I need to point out that each county and state has specific rules, laws, and guidelines that must be followed when selling real estate. I am in California and in order to be compliant with state and local counties, there are specific items or details that must be handled appropriately in order to be compliant with your area. (California Association of Realtors Quick Guides). This includes the purchase agreement and seller’s disclosures. So in order to be properly advised, you should consult with an attorney who can best guide you through this process.
Okay? Why would you want to do this? Well, this is simple. You can save on the realtor sales commission. Now, how much is this? Well, back in the day, the customary commission fee was about 6% and usually, this was split equally between the listing and the buyer’s agent. Currently, in this environment, it’s more about 5% and I need to point out that if there is an agent representing the buyer, then it’s split between two agents. Even though the buyer’s agent is getting half, the total fee is paid by the seller. Again, this is an average or what is customary in the field. It can vary from sale to sale and the commissions are negotiable.
For example, if the sales price is 500,000, the 5% commission fee is $25,000. That would be $25,000 in savings if you’re able to handle all the details and the key is to handle all the details correctly and legally. As the expression goes, the devil’s in the details and there are a lot of details with selling a home.
Now, unless you’re able to find the buyer, in other words, if the buyer is represented by a real estate agent, then you will still pay for the buyer’s commission, which is generally 2.5% of the total sales price of your home and this brings me to the topic, do-it-yourself for selling your own home. In this video, I’m going to go over some of the most essential details that must be handled appropriately in order to have a successful sale.
Number One – Home Evaluation
There are two critical aspects of every home sale; the presentation. This is how your home is presented to potential buyers and the list price. Do you know how the market value of your home is determined? And if so, where will you get the data required to figure out how much your home is worth? Many homeowners mistakenly turned large online real estate portals, which can be a mistake. Sites like Zillow and Trulia don’t have access to all the MLS listings. Instead, they rely on the use of public records fed into an algorithm that spits out results, that have a medium error rate of about 8%, according to Zillow’s CEO. Now that doesn’t sound too bad, right? Consider this. March median sales price, national wide, was $344,625. Suppose you list your home for that but the real estate portal is telling
your potential home buyers that your home is worth 8% less. That’s more than $27,000. Imagine how many people wouldn’t even look at your home if it’s overpriced or worse, the lowball offers you’ll get because of it. This does happen.
One economist, by the way, found the error rate of Zillow’s Zestimate to be much higher, as much as 20% too high or too low. To determine the current value of your home starts with reviewing the recently sold comps that are near and similar to your home. The MLS has this data and one must be a member to access it.
When a realtor determines the list price, they usually study the comps. There are three components or factors which are active, pending, and sold. The sold area is the only number that is truly relevant for home value. Active and pending are used as possible indicators of any changes in the market. This information and the condition of your home will help them come up with an appropriate list price. The key is to list your property accordingly so it attracts buyers.
Number Two – Marketing
Unless you’ve worked in advertising or marketing, you’ll find to effectively and correctly market your home has several steps when done properly. The first one is the description of your home. This is the verbiage buyers will read that explains your home’s features and any unique, or what I like to call, intangibles. An intangible is something like a great view, large lot, or a super outdoor living area.
The next is the home’s visual display. This covers print items like mailers and postings on the MLS or videos on YouTube. Let’s start with pictures. You have stills and 3D pictures. 3D pictures have to be processed with special software. For videos, you have steady cam walkthrough and stationary tripod videos. Last is aerial drone work. This would include pictures and videos. With these assets, you need to have somebody with the skills and equipment necessary to properly edit and display them, so a buyer can understand and appreciate all the features your home has to offer.
Now, once you put together your marketing package, where will you post them so you get maximum buyer exposure? I’m not talking about Craigslist. I mean on the MLS website. My local MLS Association only allows posted listings from its members. The members do have to be a licensed real estate agents who work under a brokerage. I believe Zillow offers some kind of service for sale by owners to post their properties on their websites. I recommend you research this to see if this is something you’re interested in.
Number Three – A Multitude of Details
This is probably the most difficult area for me to address because there are so many details that must be handled appropriately, correctly, in order to have a successful home sale, and that there is no legal recourse that can come from it.
As I said in the beginning, the devil’s in the details. Let’s start with disclosures. There are several seller disclosures that need to be correctly completed by the seller and made available to the buyer when you’re in contract. The two big ones are the real estate transfer disclosure statement (TDS) and the Seller Property Questionnaire (SPQ).
The second, managing the buyer’s contract. This would include handling a counteroffer, contingency release, buyer requests for repairs, and et cetera. Again, I would recommend consulting with an attorney, so you can be best advised.
If a buyer is financing, do you know how to assess if their offer is sound, especially if the buyer’s offer is contingent on the sale of their home? Another scenario is, what if you need the proceeds from the sale of this home, going towards another home that you’re in contract to purchase. Will you know how to properly structure both contracts?
So to conclude on this subject can have homeowners sell their own home and the answer is yes. Is it easy? Probably not, if this is your first time and given the number of details to accomplish. If you are seriously considering selling your own home by yourself, in other words without using a realtor, then please do your own research. I would do a Google search for sale by owner and read as much as possible, both pros and cons. Here are a couple of articles you may find interesting: Pros and Cons of Selling Your Home on Your Own | Selling Your Home Solo to Save Money? You’ll Actually Make Less Than You Think
I hope you enjoyed this article. Please let me know if you have any questions. Warren
Hello…I work with both buyers and sellers in the Tri-Valley area of Northern California. The Tri-Valley is comprised of 6 cities: Pleasanton, Livermore, Dublin, San Ramon, Danville, and Alamo. To better understand what each city has to offer, I have created a Pros and Cons video and BLOG for each – (Pros & Cons for Pleasanton, Pros & Cons for Livermore, Pros & Cons for Dublin, Pros & Cons for San Ramon, Pros & Cons for Danville and Pros & Cons for Alamo). If you are thinking about purchasing or selling a home, please reach out to me by text, phone, or email. If it is convenient, I can schedule a Zoom chat so we can discuss your home goals. Wishing you all the best on your home journey. Cheers!
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