If you’re considering going the for sale by owner route, you’ll be happy to learn that selling your home yourself is easy and will save you tons of money.
You just need to know what you’re doing. And you need to be willing to spend a bit of money marketing the home and getting professional photos taken. That’s why we’ve prepared this guide to walk you through the process.
Save Big Bucks
One of the biggest reasons to sell your home yourself is the savings you’ll get by not having to pay a commission to a listing agent. For example, if you sell a $700,000 home, you’ll be paying a whopping $42,000 in commission fees to real estate agents. You could buy yourself a new Audi or Mercedes for that and still have money left over.
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Not many homes sell for that in New York City, of course. The median price of a co-op and condo in Manhattan just dipped slightly below $1 million to $999,000. That means the broker/agent commission is a whopping $60,000. If you were to divide that by the hours an agent actually works on selling a home, their compensation probably exceeds $1,000 an hour, so selling your home yourself can be enticing.
What Do You Need to Do to Sell Your Home by Owner?
Not as much as you might think. All you really need is proper marketing. In most cases, this means getting on the major listing sites like Zillow, Realtor, PropertyClub, and Streeteasy, as well as getting listed on the MLS (although you cannot always do that without a broker).
You might also want to hold a few open house events and maybe put the listing in local newspapers. Also, if you’re unable to get on the MLS, you can pay a flat-fee agent or broker to list your home there. Typically the cost is a few hundred bucks and is money well spent as exposure is what brings buyers and sells homes.
Presentation and Great Real Estate Photos Are Key
It’s important to remember that besides getting your home out there, you’ll want to present it in its best light. That’s why you should plan on hiring a professional photographer. A great photographer will compose pictures that attract more buyers and help your home sell faster, which is important in a market as competitive as New York City.
And best of all, real estate photography in NYC is relatively affordable, with prices starting as low as $125. Paying for professional photos will be well worth it and could lead to your home selling for thousands more.
Nowadays, with the covid-19 pandemic changing the way buyers view homes in NYC, you should also consider getting a virtual tour or video of the home as well.
Don’t Overprice the Home
One of the fatal mistakes many FSBO sellers make is overpricing the home. This typically happens when they set a price based on emotion and not reason. The proper way to price your home is to have a CMA (Competitive Market Analysis) done. This usually involves a licensed agent coming in, examining the home, and then surveying the market to determine what homes like it sold for recently. In NYC, you can do quite a bit of research yourself by searching closed sales and also looking at other similar listings on the market.
University Study Notes That Brokers Often Sell a Home for Less Than Its Worth
A study done at the University of Chicago, and featured in the New York Times, revealed something very concerning to home sellers who use a broker. In some cases, the study noted, real estate agents sold homes too quickly and for less money than they could have gotten had they left the home on the market for a longer period of time.
The reason for this was because the additional commission income generated from securing a slightly higher price is often negligible. It’s therefore in the interest of the agent to sell the home as quickly as possible to lock down the price – and their commission – even if that price could have been higher.
The study looked at thousands of homes sold by agents on behalf of others and thousands they owned and sold themselves. The homes sold on behalf of others were sold more quickly and for less money than the homes they owned and sold themselves.
If this isn’t a reason to think twice about selling through a broker, I don’t know what is.
Get Some Help but Don’t List With a Broker
It’s a good idea to get some help, particularly when it comes to handling the closing and paperwork. You can pay a broker to be posted on the MLS/RLS and get someone to put your home on StreetEasy, PropertyClub, and the New York Times. You can even hire someone to run an open house if you are too busy to do it yourself. Just make sure you pay for each task and not via commission.
The bottom line is that using a broker to sell your home is like pouring lighter fluid on a stack of hundred-dollar bills. It’s not only a fire hazard, it’s a costly way of losing money that could otherwise be spent on a new car.