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The True Cost of Selling Your House on Your Own

Monday, June 26, 2023

by Christie Cannon

The True Cost of Selling Your House on Your Own

Selling your house is no simple task. While some homeowners opt to sell their homes on their own, known as a FSBO (For Sale by Owner), they often encounter various challenges without the guidance of a real estate agent. If you’re currently considering selling your house on your own, here’s what you should know.

The most recent Profile of Home Buyers and Sellers from the National Association of Realtors (NAR) surveyed homeowners who’d recently sold their own homes and asked what difficulties they faced. Those sellers say some of the greatest challenges were prepping their home for sale, pricing it right, and properly managing the required paperwork, just to name a few.

When it comes to selling your most valuable asset, consider the invaluable support that a real estate agent can provide. By partnering with an agent, you can navigate the complexities of the selling process with confidence. Here are just a few of the many ways an agent is essential to your home sale:

1. Marketing and Exposure

Effective marketing is a key piece of attracting qualified buyers to your property. Real estate agents have access to various marketing tools and platforms, including MLS listings, professional photography, virtual tours, and extensive professional networks. They can create a compelling listing that highlights your home's best features and reaches a wider audience.

If you sell on your own, you may struggle to match the reach of agents, resulting in limited exposure and, ultimately, fewer potential buyers.

2. Managing Liability and Legal Considerations

Today, more disclosures and regulations are mandatory when selling a house. And all that paperwork and all the legal aspects of selling a home can be a lot to manage. Selling a house without professional guidance exposes homeowners to potential liability risks and legal complications.

Real estate agents are well-versed in the contracts, disclosures, and regulations necessary during a sale. Their expertise helps minimize the risk of errors or omissions that could lead to legal disputes or delays.

3. Negotiations and Contracts

Negotiating the terms of a home sale can be challenging, especially when emotions are involved. You may find it overwhelming to navigate these negotiations alone. Without an agent, you assume this responsibility on your own. This means you’ll have full accountability for working and negotiating with:

The buyer, who wants the best deal possible.
The buyer’s agent, who will use their expertise to advocate for the buyer.
The home inspection company, who works for the buyer.
The home appraiser, who assesses the property’s value to protect the lender.

Rather than going toe-to-toe with all these parties alone, lean on an expert. Real estate agents act as intermediaries, skillfully negotiating on your behalf and ensuring that your best interests are protected. They have experience in handling tough negotiations, counteroffers, and contingencies. When you sell your house yourself, you’ll need to be prepared to manage these vendors on your own.

4. Pricing and Housing Market Knowledge

Determining the right asking price for your property is crucial. It requires in-depth knowledge of the local real estate market, including recent sales data, neighborhood trends, and the current demand for properties. Real estate agents have access to comprehensive market data and the expertise to analyze it accurately.

When you sell your house on your own without this comprehensive information, you risk overpricing or underpricing your home. This can result in an extended time on the market and also the risk of leaving money on the table - which decreases your future buying power. An agent is a key piece of the pricing puzzle.

Bottom Line

While selling a home on your own might seem appealing at first, the challenges that come with it can quickly become overwhelming. The expertise that a real estate agent brings to the table is vital for a successful sale. Instead of tackling it alone, let’s connect to make sure you have an expert on your side.

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What’s Happening with Home Prices?

Monday, November 15, 2021

by Christie Cannon

What’s Happening with Home Prices?

Many people have questions about home prices right now. How much have prices risen over the past 12 months? What’s happening with home values right now? What’s projected for next year? Here’s a look at the answers to all three of these questions.

How much have home values appreciated over the last 12 months?

According to the latest Home Price Index from CoreLogic, home values have increased by 18.1% compared to this time last year. Additionally, prices have gone up at an accelerated pace for each of the last eight months (see graph below):The increase in the rate of appreciation that’s shown by CoreLogic coincides with data from the other two main home price indices: the FHFA Home Price Index and the S&P Case Shiller Index.

The last year has shown tremendous home price appreciation, which is resulting in a major gain in wealth for homeowners through rising equity.

What’s happening with home prices right now?

All three indices mentioned above also show that while appreciation is in the high double digits right now, that price acceleration is beginning to level off (see graph below):Year-over-year appreciation is still close to 20%, but it’s clearly plateauing at that rate. Many experts believe it will drop below 15% by the end of the year.

Keep in mind, that doesn’t mean home values will depreciate. It means the rate of appreciation will slow, yet stay well above the 25-year average of 5.1%.

What about next year?

The recent surge in prices is the result of heavy buyer demand and a shortage of homes available for sale. Most experts believe that as more housing inventory comes to market (both new construction and existing homes), the supply and demand for housing will come more into balance. That balance will bring a lower rate of appreciation in 2022. Here’s a look at home price forecasts from six major entities, and they all project future appreciation:

While the projected rate of appreciation varies among the experts, due to things like supply chain challenges, virus variants, and more, it’s clear that home values will continue to appreciate next year.

Bottom Line

There have been historic levels of home price appreciation over the last year. That pace will slow as we finish 2021 and enter into 2022. Prices will still rise in value, just at a much more moderate pace, which is good news for the housing market.

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What Does the Future Hold for Home Prices?

Tuesday, October 19, 2021

by Christie Cannon

What Does the Future Hold for Home Prices?

If you’re looking to buy or sell a house, chances are you’ve heard talk about today’s rising home prices. And while this increase in home values is great news for sellers, you may be wondering what the future holds. Will prices continue to rise with time, or should you expect them to fall?

To answer that question, let’s first understand a few terms you may be hearing right now.

Appreciation is an increase in the value of an asset.
Depreciation is a decrease in the value of an asset.
Deceleration is when something happens at a slower pace.

It’s important to note home prices have increased, or appreciated, for 114 straight months. To find out if that trend may continue, look to the experts. Pulsenomics surveyed over 100 economists, investment strategists, and housing market analysts asking for their five-year projections. In terms of what lies ahead, experts say the market may see some slight deceleration, but not depreciation.

Here’s the forecast for the next few years:As the graph above shows, prices are expected to continue to rise, just not at the same pace we’ve seen over the last year. Over 100 experts agree, there is no expectation for price depreciation. As the arrows indicate, each number is an increase, which means prices will rise each year.

Bill McBride, author of the blog Calculated Risk, also expects deceleration, but not depreciation:

“My sense is the Case-Shiller National annual growth rate of 19.7% is probably close to a peak, and that year-over-year price increases will slow later this year.”

Ivy Zelman of Zelman & Associates agrees, saying:

“. . . home price appreciation is on the cusp of flipping to a decelerating trend.”

A recent article from realtor.com indicates you should expect:

“. . . annual price increases will slow to a more normal level, . . .”

What Does This Deceleration Mean for You?

What experts are projecting for the years ahead is more in line with the historical norm for appreciation. According to data from Black Knight, the average annual appreciation from 1995-2020 is 4.1%. As you can see from the chart above, the expert forecasts are closer to that pace, which means you should see appreciation at a level that’s aligned with a more normal year.

If you’re a buyer, don’t expect a sudden or drastic drop in home prices – experts say it won’t happen. Instead, think about your homeownership goals and consider purchasing a home before prices rise further.

If you’re a seller, the continued home price appreciation is good news for the value of your house. Work with an agent to list your house for the right price based on market conditions.

Bottom Line

Experts expect price deceleration, not price depreciation over the coming years. Let’s connect to talk through what’s happening in the housing market today, where things are headed, and what it means for you.

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In Today’s Market, Listing Prices Are Like an Auction’s Reserve Price

Wednesday, June 9, 2021

by Christie Cannon

In Today’s Market, Listing Prices Are Like an Auction’s Reserve Price

For generations, the process of buying and selling a home never really changed. A homeowner would try to estimate the market value of their house, then tack on a little extra to give themselves some negotiating room. That figure would become the listing price. Buyers would then try to determine how much less than the full price they could offer and still get the home. As a result, the listing price was generally the ceiling of the negotiation. The actual sales price would almost always be somewhat lower than what was listed. It was unthinkable to pay more than what the seller was asking.

Today is different.

The record-low supply of homes for sale coupled with very strong buyer demand is leading to a rise in bidding wars on many homes. Because of this, homes today often sell for more than the list price. In some cases, they sell for a lot more.

According to Lawrence Yun, Chief Economist at the National Association of Realtors (NAR):

“For every listing there are 5.1 offers. Half of the homes are being sold above list price.”

You may need to change the way you look at the asking price of a home.

In this market, you likely can’t shop for a home with the former approach of negotiating to a lower price.

Due to the low supply of houses for sale, many homes are now being offered in an auction-like atmosphere in which the highest bidder wins the home. In an actual auction, the seller of an item agrees to take the highest bid, and many sellers set a reserve price on the item they’re selling. A reserve price is the minimum amount a seller will accept as the winning bid.

When navigating a competitive housing market, think of the list price of the house as the reserve price at an auction. It’s the minimum the seller will accept in many cases. Today, the asking price is often becoming the floor of the negotiation rather than the ceiling. Therefore, if you really love a home, know that it may ultimately sell for more than the sellers are asking. So, as you’re navigating the homebuying process, make sure you know your budget, know what you can afford, and work with a trusted advisor who can help you make all the right moves as you buy a home.

Bottom Line

Someone who’s more familiar with the housing market of the past than that of today may think it’s foolish to offer more for a home than the listing price. However, frequent and competitive bidding wars are creating an auction-like atmosphere in many real estate transactions right now. Let’s connect today so you have a trusted real estate professional on your side to provide the best advice on how to make a competitive offer on a home.

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How Pricing Your Home Right Makes a Big Difference

Monday, February 10, 2020

by Christie Cannon

How Pricing Your Home Right Makes a Big Difference

Even though there’s a big buyer demand for homes in today’s low inventory market, it doesn’t mean you should price your home as high as the sky when you’re ready to sell. Here’s why making sure you price it right is key to driving the best price for the sale.

If you’ve ever watched the show “The Price Is Right,” you know the only way to win the game is to be the one to correctly guess the price of the item up for bid without going over. That means your guess must be just slightly under the retail price.

When it comes to pricing your home, setting it at or slightly below market value will increase the visibility of your listing and drive more buyers your way. This strategy actually increases the number of buyers who will see your home in their search process. Why? When potential buyers look at your listing and see a great price for a fantastic home, they’re probably going to want to take a closer look. This means more buyers are going to be excited about your house and more apt to make an offer.

When this happens, you’re more likely to set up a scenario with multiple offers, potential bidding wars, and the ability to drive a higher final sale price. At the end of the day, even when inventory is tight, pricing it right – or pricing it to sell immediately – makes a big difference.

Here’s the other thing: homeowners who make the mistake of overpricing their homes will eventually have to lower the prices anyway after they sit on the market for an extended period of time. This leaves buyers wondering if the price drops were caused by something wrong with these homes when in reality, nothing was wrong, the initial prices were just too high.

Bottom Line

If you’re thinking about selling your home this year, let’s get together so you have a professional on your side to help you properly price your home and maximize demand from the start.

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Displaying blog entries 1-5 of 5

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The True Cost of Selling Your House on Your Own