Selling Your Condo Privately: Consider These Risks of For Sale by Owner

Are you thinking of selling your condo yourself to save money on a real estate broker's commission? I admit, saving money is a good idea. But not if doing so puts you at risk. There are multiple reasons you should not try to sell your condo on your own.

For one thing, you will likely not save much money. Condos for sale by their owners are known to attract low-ball offers from predatory investors. Even honest buyers will calculate the commission you would have paid a realtor at your current asking price, and will expect you to drop your price by that much. Plus, a 1992 study showed that real estate agents can get 9 1/2% more for a similar home in the same neighborhood than a For Sale by Owner.

Then there is the difficulty of attracting buyers. If your property is not listing on the Multiple Listing Service, the majority of people hunting for a condo like yours will never know it is for sale. Attracting buyers costs money and involves expertise. You must spend money advertising your property where buyers are looking (the MLS, local newspaper classifieds, real estate magazines, and more). And you must write your advertisement using the same level of skill that realtors take years to master. Not easy.

Another problem you face is screening buyers. When you do not have a realtor working for you, protecting your interests, you feel obliged to show your condo to every buyer who shows an interest. This is a huge waste of your time. Not all apparent buyers want to buy. Some tour open houses for a hobby. Not all buyers are qualified. Plenty of them either have not met with their banker, lack a down payment, have too many other debts to carry a mortgage on your property, have insufficient income to afford the monthly mortgage payments, property taxes and condo fees, or in other ways are not qualified to buy your unit. Competent realtors screen buyers before they show them any properties.

You may also put yourself at considerable legal risk by selling your condominium on your own. For example, a buyer may present an offer on your property using a home-made agreement of purchase and sale. This contract may contain terms and clauses that are against your interests. Terms and clauses that deal with such vital matters as who takes title, when the existing mortgage is paid in full, and who is liable for repairs after the sale closes can be worded in such a way that they leave you at risk, are unenforceable, favour the buyer rather than you, or render the contract void or voidable.

Finally, there is the matter of your personal safety. Selling your condo yourself requires you to open your home to strangers. That leaves you vulnerable to theft, burglary and home invasion. Even realtors have been attacked and murdered while showing homes. Identity theft is another risk, especially if you publish your name, address, phone number and email address in your advertisements.

My advice to you is to retain the services of a professional real estate agent to sell your condo. You will likely sell it faster, for more money, and with fewer headaches and hassles, than going it alone.