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.

How to Choose a For Sale By Owner Real Estate Service

Maybe you don't have a lot of equity built up in your home and the thought of having to pay high real estate commissions to a broker just isn't possible. Or maybe you just like saving money when you can. What ever your reason for looking at for sale by owner real estate options you're not alone.

More and more people every year are looking for alternatives to full service real estate firms in order sell their homes. So what are you really giving up if you choose to sell your own house versus using a realtor? and what should you watch out for when choosing a company to list your home on your own? We'll answer these two questions in this article.

What Are You Losing by Going For Sale By Owner

The long and short of it is you need to handle everything when you're selling your own home. A good for sale by owner brokerage will get your house listed on MLS so that other buyers and potential buying agents can see find the house, however after that it's all you.

Where a full service selling agent would field phone calls, emails etc. from prospective buyers and agents that will fall on your shoulders. Arranging showings and negotiating a deal with a buyer will also be something you'll need to deal with when you do find a buyer.

What to Look For in a Company

The key to having a successful for sale by owner transaction is getting your home on the multiple listings service (MLS) in your province.

MLS is still the most used website by individuals when searching homes for sale and is the only site that licensed realtors use when seeking homes for their buying clients. In a nutshell if your home isn't listed on MLS then the majority of people searching for homes in your area isn't going to find it. So ensure that the company you choose includes a listing on MLS in your province.

Second, get a yard sign. People driving through neighborhoods they like will often see a sign and then note the address to search on MLS later. If you don't have a yard sign then people won't know your home is for sale.

Now these final points aren't a must but can be of great assistance.

If the brokerage you deal with offers assistance with the sales transaction for a fee that can be worth it. Selling can be tedious and making sure you cross your t's and dot your i's is essential.

Also having the option to flip to full service real estate probably isn't a bad thing either. Of course you always hope that your home sells using the sell your own home model, in some instances you might need the help of a full service agent to find a buyer.

For Sale By Owner

The "for sale by owner "terminology involves a process in real estate dealings where the property transaction is done by the buyer and the seller without any middle man. Usually, real estate deals whether outright sales or for rental purposes invariably have the middle man or the real estate agent or broker and it is he or she who swings the deal for a commission payout.

This payout could be either from the seller or from the buyer or from both. The commission structure and terms do vary from country to country and even within countries as the real estate market is not something that is highly regulated in most countries.

In the US, this commission can be as high as 6% of the selling price and that is quite a big amount. People therefore want to avoid incurring this expense and that is where the "for sale by owner" principle comes into play.

In a "for sale by owner" transaction, the seller typically makes use of a marketing company to do the marketing of the property and with the help of a lawyer; he ensures that the legal angle is well addressed.

Now we have talked about this arrangement from the seller's perspective. If a particular buyer who has engaged a real estate agent to help him wishes to take the "for sale by owner" route, the agent may still request the seller to pay him his commission. The seller though is under no obligation to make any commission to him and he has to do with what the buyer would pay him.

As an owner, if you want to take the "for sale by owner" approach, then you have to be prepared to do everything on your own. The advantages you get by selling your property yourself though is substantial as you get to keep the proceeds and you also get to deal directly with the buyer. There are many buyers who too are interested in taking the "for sale by owner" approach and therefore it is entirely up to you on how you want to sell your property.

The "for sale by owner" real estate transaction is definitely a good one if you and the buyer take the time and effort to get acquainted with yourselves with all the legal aspects and are willing to take on the responsibilities that are usually handled by real estate middlemen.