This BLOG On Homes For Sale By Owner Versus Listing With Real Estate Agent Was PUBLISHED On February 20th, 2019: Video By Karry Razik, Illinois Realtor With Remax 1st Class Orland Park, Illinois
The Illinois housing market is hot.
- There is more demand for homebuyers than the
inventoryof available homes
- Many home sellers are seriously thinking about selling their homes for sale by owner versus listing it with a realtor
- Homeowners can try to sell their homes for sale by owner but trying to save a few bucks can sometimes backfire on them
- Real estate agents are professionals in their field and know how to get top dollar on the homes they listed
On this blog, we will cover homes for sale by owner versus listing it with a realtor.
Benefits Of Homes For Sale By Owner In Hot Housing Market
Home prices have been rising nationwide for the past 5 years. FHFA increased conventional loan limits to $484,350 for 2019. This is the third year in a row that The Federal Housing Finance Agency has increased conforming loans limits due to rising home prices. HUD, the parent of FHA, has followed FHFA and increased FHA Loan Limits for 2019 to $314,827. Again, HUD increased FHA Loan Limits three years in a row. Due to appreciation in home prices, many homeowners are thinking of selling their homes. Most realtors charge 6% commission on a real estate sale transaction. 6% is a lot of money indeed and often sellers are exploring with the idea of homes for sale by owner versus listing it with a real estate agent. However, is homes for sale by owner versus realtor a good idea? Will homeowners save thousands of dollars? Will homes for sale by owner sell fast enough for homeowners?
We will be covering these topics on this blog. Top Illinois Realtor Karry Razik issued the following statement:
Selling your home means making dozens (if not hundreds) of decisions, starting with whether to work with a real estate agent. While the vast majority of homeowners hire a listing agent, others brave the world of FSBO – For sale by owner. According to Zillow research, 36 percent of sellers attempt to sell their homes themselves, but challenges along the way lead many of them to eventually hire an agent. In the end, only 11 percent of sellers end up selling their home without a real estate agent. Consider these Homes For Sale By Owner statistics: In addition to the 57 percent of sellers who believe that selling Homes For Sale By Owner will save them money, 36 percent believe it will save them time, and 27 percent don’t hire an agent because they feel they know their home better than any agent could. Homeowners that attempt Homes For Sale By Owner transactions are more likely to be Millennials, city dwellers, and minorities.
Karry Razik believes experienced real estate agents can get an average of 8% higher sales price than those who
Tools To Help Homes For Sale By Owner
When home sellers hire a listing real estate agent, the agent pays for all marketing expenses.
- Whether it is scheduling and launching open houses, sending mass mailers, listing homes in real estate magazines, or newspaper advertising expenses, sellers do not have to spend a dime
- Homeowners listing their homes for sale by owner needs to cover all of these expenses
- There are websites such as Zillow, Redfin, Trulia that home sellers can utilize to help with homes for sale by owner
- These websites have information readily available online
Main Reason Why Homes For Sale By Owner Versus Listing With Realtor Is Becoming Popular
The number one reason why sellers try to sell homes by owner is to save commissions.
- Average real estate commissions are 6%
- On a $200,000 home, that is $12,000
- Many believe that selling their homes without a real estate agent will save them this real estate commission
- Granted, it is a lot of savings
- However, nothing is that easy in life
One thing sellers need to think when selling homes by owner is if savings of fees to have personal professional advice during the home selling process worth it?
Considerations Homes For Sale By Owner Versus Real Estate Agent
Here are some things to consider for sellers who are considering FSBO Versus Listing With Professional Real Estate Agent:
According to our real estate consultant Karry Razik, he issued the following statement on the benefits of hiring a real estate agent versus FSBO:
Real estate agents firmly believe they can get you more money through the art of negotiation, leverage of local knowledge, use of incredible marketing tools, access to a greater marketplace and ability to qualify buyers. The right Realtor(R)* will always command a premium, if there’s a premium to be had. Real estate agents know how to market a home using photographs to maximize value when showing it to prospective buyers. They know it’s an emotional process, and as a third party, can better manage that. A good broker can help get potential buyers excited about a lifestyle that a house can offer. Also, potential buyers don’t always trust the homeowner.
On the flip side, sellers can get the value of their homes by hiring an independent home appraisal. Appraisals cost anywhere between $400 to $500. Coupled this with the information available online, sellers can come up with a list price when it comes to FSBO.
Showing Property To Potential Home Buyers
Real estate agents will pre-qualify potential home buyers before setting up a showing on a property. Most realtors will not show a listed property without a pre-approval letter from the buyers. Many will not entertain a purchase contract without contacting the buyer’s lender.
Here is what Karry Razik of Remax First Class in Orland Park, Illinois says:
Good real estate agents will request financial statements to determine a potential buyer’s credit-worthiness, and, in the case of an all-cash offer, verify the funds. Most sellers would rather not waste time showing their home to not-so-serious buyers. A knowledgeable broker has the foresight and know-how to verify exactly where the funds to purchase the home are coming from (pending home sale, mortgage) so that it’s less likely a deal will break down at the contract stage.
Sellers selling their own homes are up on their own when requesting financial statements from potential buyers. The ForSaleByOwner.com website refers users to an article describing the difference between pre-qualified and pre-approved buyers who will be using a mortgage to buy the home.
Sellers In A Hurry To Sell Their Homes
Home sellers who are in a hurry to sell their homes because they need to purchase another home should take time into consideration. Realtors are professionals who can stage homes, set up home inspections, set up appraisal showings, and qualify potential borrowers.
Home for sale by owner versus hiring real estate agent to list sellers homes is up to the individual sellers. It is often wise for sellers who are very busy to hire a professional realtor. Others who are not in a major hurry to sell their homes may experiment with FSBO. Home sellers should weigh the pros and cons when thinking about selling their homes themselves versus hiring a listing agent.