Selling Your Own Home: Big Savings or Big Mistake?
by Ralph Roberts
Much has been made in recent weeks of homeowners taking advantage of a booming real estate market and selling their homes without a broker. With low housing inventory in markets across the county, combined with the relatively low mortgage interest rates, it seems like saving a Realtor's fee is a win-win situation for buyers and sellers -- - or is it?
What many people don't know about selling homes could fill a 4 bedroom home. I'm not worried about competition from homeowners who want to sell on their own, but I am concerned about consumers who may unwittingly put themselves at serious financial risk.
Here's what you should know before you sign a contract:
You could end up with a jail term and/or hefty fines for non-disclosure of certain environmental defects. Lead based paints are the key focus of extensive federal rules and regulations. Make sure you have all the right information and forms. Document everything.
Make sure your buyers are approved for a mortgage before you go to contract - otherwise, you might lose time while other real buyers will consider your house off the market.
Watch out for "weasel clauses" like "subject to attorney approval" or "subject to appraisal." Things in real estate transactions rarely go smoothly - and clauses like these make things a little too slippery!
Closing costs - don't let the buyers convince you to pay their closing costs. There's very little inventory in most markets right now. It would be foolish to pay thousands of dollars when there are so many buyers. You'll lose a lot of money - and your self-respect.
Keep your eyes on the market and interest rates. Be sure that your buyers will be able to buy, even if the Dow takes a tumble or interest rates start to move upwards.
There are also rules on disclosing material defects in the home and property. Make sure to find out what you are legally required to do before signing any contract. This will also help you if your buyer decides to sue you after the home is purchased.
Piggyback loans or second mortgage loans - be very careful. Unless you are a mortgage banker by profession, how much do you know about setting up financing arrangements? Carrying this much financial exposure is very risky. Again, with so many buyers and so little inventory, there's no need to leave yourself open to this situation.
Consider a home warranty. For a few hundred dollars, you can buy a home warranty that provides a full year of coverage for major appliances, plumbing, electrical, heating and air conditioning systems. This makes your home more attractive to buyers, at the same time that it reduces the likelihood of problems down the road.
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Ralph R. Roberts, CRS, GRI is an award-winning and internationally recognized real estate agent, author, coach, and speaker.
Throughout his career, Ralph has proven his commitment to helping other real estate and sales professionals build upon their past and present success, grow and expand their businesses, and provide a rich and rewarding future for themselves, their customers, their employees, and their families.
As president and CEO of Ralph Roberts Realty, Ralph has personally helped thousands of consumers realize their dream of homeownership. While selling over 10,000 homes (and buying and selling over 3,000 investment properties) throughout his 30-year career, Ralph has made the time to mentor and coach hundreds of professionals in real estate, sales, and a host of other fields. Ralph is a recognized authority on Real Estate and Mortgage Fraud; Residential Real Estate; Personal Salesmanship; Sales Force and Office Management, Motivation, Design, and Team Building; and Foreclosure Self-Defense and Loan Modification, fields in which he has demonstrated his commitment to preserving the American Dream of Homeownership.
Ralph's numerous websites, blogs, seminars, and speaking engagements engage, entertain, and educate both consumers and professionals. Ralph is also an accomplished author with several successful titles to his credit, including:
Power Teams: The Complete Guide to Building and Managing a Winning Real Estate Agent Team
Financing Real Estate Investments For Dummies (John Wiley & Sons)
Mortgage Myths: 77 Secrets That Will Save You Thousands on Home Financing (John Wiley & Sons)
Foreclosure Self-Defense For Dummies (John Wiley & Sons)
Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan)
Foreclosure Investing For Dummies (John Wiley & Sons)
Foreclosure Myths: 77 Secrets to Saving Thousands on Distressed Properties (John Wiley & Sons)
Advanced Selling For Dummies (John Wiley & Sons)
Flipping Houses For Dummies
52 Weeks of Sales Success (John Wiley & Sons)
Walk Like a Giant, Sell Like a Madman (John Wiley & Sons)
Cross-Cultural Selling For Dummies (John Wiley & Sons)
To learn more about Ralph, visit AboutRalph.com, check out his daily insights on real estate and mortgage fraud prevention at FlippingFrenzy.com, or visit his latest blog dedicated to helping distressed homeowners fight foreclosure, KeepMyHouse.com.
You can reach Ralph at or by calling (586) 751-0000.
Much has been made in recent weeks of homeowners taking advantage of a booming real estate market and selling their homes without a broker. With low housing inventory in markets across the county, combined with the relatively low mortgage interest rates, it seems like saving a Realtor's fee is a win-win situation for buyers and sellers -- - or is it?
Ralph R. Roberts, CRS, GRI is an award-winning and internationally recognized real estate agent, author, coach, and speaker.