For Sale By Owner re house?

[Captain Snooze]

Sooner or later we (wife and I) will have to sell the house we're living in. We're living with mum in her house and she's not getting any younger.
I had my first chat with a real estate agent a couple of days ago just to ask some questions; I've never had to sell a property before and I have no idea about selling a house.

I was somewhat surprised at the commission they charge. I didn't ask if the commission was negotiable but something irked me after the chat: I'm suggesting the work to be done is the same regardless if the house is on the market for $500,000 or $1,000,000 and yet given the fee is commission based the agent gets approximately twice as much for selling the more expensive house.

This lead me to For Sale By Owner. Sure, there is more work to be done but it would seem that it is possible to save tens of thousands of dollars. Of course an agent would say they can get a higher price but that is conjecture.

Can anyone give me some tips, thoughts, stories about selling a house?

Thanks.

[soundman98]

@humfrz is a real estate guy in the US. which means that either he's still sleeping (HA!), or he's staying well away from this thread because you're in a different country...

according to google, australian real estate commissions are about the same as american commissions, so while it seems a little crazy, it is a relatively well established pricing scheme.

anyways, my parents did try to sell one of 2 of their rental properties through BuyOwner.com. it was in a less desirable area, and priced above most of the other houses nearby because it was the only one nearby that'd been fully remodeled. it never sold, they're back to renting it currently. cost too much to leave on the market vacant with minimal interest.

their experience with the service for the beginning part was mostly painless. they signed up, buy owner sent out a professional photographer that pictured every room with a 360 degree camera for a virtual walkthrough--i believe there's an option for you to upload your own shots as well to save the fee, but they were trying to show how much nicer the house was from the others.

it doesn't seem like most buy owner listings show up in the typical real estate listings, so it's less obvious to those that might be looking. for the most part, all the fees come out of your(sellers) pocket, so you'll likely still have to deal with a buying agent no matter what. also important is that you somewhat become the agent, so advertising and making sure people know its available falls on you, as well as fielding all the stupid realtor questions. basically, you need a half day free all the time to do it really well...

most buyers(myself included), use agents to sort through all the available listings, because the agents play games where most houses they list aren't publicly viewable on real estate sites until AFTER the first 15 days or something. in my area, offers are usually made and accepted within the first 24 hours a listing goes live to the other agents (but not public online), meaning even looking without an agent dramatically shrinks the available pool of listings to those already picked over and rejected by everyone else.

my parents did just successfully sell a different rental property they had in another town, but with an agent this time. took about a week to the first offer. the situation was very similar, nicely remodeled, less desirable part of town.. they got about half they wanted for it due to all those factors, but it did sell(it was costing more to attempt to rent, and among other factors, it was costing my dad stress with his diabetes as well).

i don't believe that particular agent 'sold' it any better, but getting access to the agent listings did make a huge difference in terms of getting people to see it. overall, i believe they had nearly nearly 20-30 parties walk through the house, where the buy owner house, i don't believe topped 10 parties that even called on it.

so my opinion is that yes, it sucks to pay the agent fees, but at least in the states, there are significant advantages in marketing and hassle, even if i admit that some of those factors are very thinly-veiled legal law manipulations.

[humfrz]

Originally Posted by soundman98

@humfrz is a real estate guy in the US. which means that either he's still sleeping (HA!), or he's staying well away from this thread because you're in a different country...

Yaaaannnnnn…..OK, I'm awake.

Yes, it's Saturday so I slept in. -

As soundman98 eluded to, I'm reluctant to offer any specific advice because I know nothing of your market.

However, this is what I suggest. Interview at least three real estate agents from three different reputable agencies in your area.

Ask them to give you an estimate of what they feel your house would sell for and what the total commission would be.

Pick the agent that you feel most comfortable with.

Yes, I am advising you to sell through real estate company. I was a real estate broker for 10 years and I would NOT consider selling my own house as a FSBO (For Sale By Owner).

Why not? Because their are just too many damn things that can make a sale go sideways, that you are not aware of.




humfrz

[ROFL it's Waffle]

In the states, commission can be negotiated, sort of. We bought our current house in August 2019, the seller was a good friend of the family so we were considerably more trustworthy of the seller. His real-estate agent on the other hand, a little sketchy, but the owner knew her from somewhere (relative of a friend or something). The agent made a deal with the seller, if you can find a buyer (us) who is willing to come in without their own agent, she will only charge the standard 3% commission, since usually both buyer and sellers have agents, and they each get 3% (6% total).


We wanted to buy the house before it went to market. There were other people who out-bid us, but their offers fell through. The realtor got greedy because she thought the house could sell for a lot more, so she guilted the owner into listing the house, doing two open houses (Saturday and Sunday back-to-back). Bunch more offers, but all of them fell through. Owner finally kicked back and said "ROFL and his wife wanted my house from day one as-is, do whatever you have to do to sell it to them."


His realtor was a major PITA. She was always trying to push push push a quick sale. We signed a contract, but then she brought in another buyer in parallel "in case our offer fell through." These other people somehow had their bank assessor come to the house before our bank assessor came to inspect the house (real shady business). His realtor was urgently trying to sell his house to these other people! He was starting to sign the final papers, when he noticed that our names weren't anywhere in the final contract. Needless to say, our bank's lawyers straightened this realtor out real quick. She lost her license after our sale.


So, if you're going to use a realtor, do your homework first. Ad placement is where a realtor is helpful. If you have a beautiful house for sale, I doubt you will need a realtor's help selling it. You will just need real-estate lawyers. This is an unavoidable cost. The lawyers will order a survey of the land, basically making sure what you're selling is actually yours to sell.


Don't include any of the appliances in the listing, you can use these as bargaining chips if the buyer tries to counter-offer. Are you willing to make repairs if the buyer requests them, or are you willing to lower the selling price? All topics you'll have to think about. Realtor can do that for you... but, if you value 3% of (let's say $1M), are you worth 3%? That's like a brand new BRZ!

[why?]

Realtors are good because they can have a handful of clients looking for your house, so they can make a sale fast for a reasonable amount of money. They can also help you stage your home correctly so you can get a little more money. They aren't going to try to get the absolute most money, because an extra $20k isn't much to them when they are only getting 3% or so.


Also see if you can find someone separate to give you an idea of your houses value, and if you can find a good home inspector to make sure there is nothing wrong with your house, so you know if someone says something needs fixing you know if they are truthful or lying assholes.


Humfrz has the correct idea. Check out realtors web pages to make sure they are selling houses similar to yours as well. You don't want someone selling starter homes or mansions trying to sell your house if it isn't one of those.

[Silvermk2]

Problem is a lot of house buyers have a realtor helping them to find a house and no realtor will even mention your place since there is no commission in it for them. In a hot market it could be not that bad though.

[why?]

Originally Posted by Silvermk2

Problem is a lot of house buyers have a realtor helping them to find a house and no realtor will even mention your place since there is no commission in it for them. In a hot market it could be not that bad though.

They always get a commission. If you don't have a realtor but the buyer does than the buyer's realtor will get at minimum half the usual commission, but usually since the buyer is paying anyways they will take it all.

[NoHaveMSG]

If you are selling and the buyer is using a bank loan, just go with a realtor for all the reasons @humfrz has mentioned. They know the in's and out's of the process.

We have bought a lot of investment properties without a realtor, but they have all been land sales contract, no bank involved. But you are opening up to quite a bit of liability doing that.

[JoeC]

Originally Posted by humfrz

Because their are just too many damn things that can make a sale go sideways, that you are not aware of.
humfrz

I've always been so curious about this. Let's simplify the equation as much as possible and pretend my house is fully paid for and I have the deed in hand. I have a buyer who wants the house and we agree on a price. We meet at my bank to facilitate the fund transfer and sign over the deed ( I don't actually know how the deed transfer works but guess I could hire a real estate attorney for an hour to handle that).

To me it seems so simple. What could go wrong?

[NoHaveMSG]

Originally Posted by JoeC

I've always been so curious about this. Let's simplify the equation as much as possible and pretend my house is fully paid for and I have the deed in hand. I have a buyer who wants the house and we agree on a price. We meet at my bank to facilitate the fund transfer and sign over the deed ( I don't actually know how the deed transfer works but guess I could hire a real estate attorney for an hour to handle that).

To me it seems so simple. What could go wrong?

How is the buyer paying in this scenario?

[soundman98]

Originally Posted by why?

and if you can find a good home inspector to make sure there is nothing wrong with your house, so you know if someone says something needs fixing you know if they are truthful or lying assholes.

my experience with home inspectors is that all of them will always find something. some of those things are to justify their position.

if you know any general contractors, try asking them to come by to take a look at the house. they'll generally be more knowledgeable with the current codes and requirements

[humfrz]

Originally Posted by JoeC

I've always been so curious about this. Let's simplify the equation as much as possible and pretend my house is fully paid for and I have the deed in hand. I have a buyer who wants the house and we agree on a price. We meet at my bank to facilitate the fund transfer and sign over the deed ( I don't actually know how the deed transfer works but guess I could hire a real estate attorney for an hour to handle that).

To me it seems so simple. What could go wrong?

That would be a unusually straightforward real estate transaction.

So, you the seller, have the deed to the property. How is the buyer to be certain that the deed (the title) is free and clear (no encumbrances or liens on the property) without a title search by a title company?

Without an home inspection by a certified home inspector, how is the buyer to be certain that safety issues or code violations do not exist on the property?

If the buyer hasn't received a "property disclosure" form from the seller, there my be hidden material defects in the property that aren't readily apparent.

How can the buyer be sure that their are no back taxes due?

Who will handle the utilities transfers?

If earnest money is involved, who will hold the earnest money.

OK, now, you as the seller.

IF ….. ?? ... the buyer is going to pay cash, do you have "proof of funds" that the buyer actually has the cash?

When do you actually "sign over" the title and give it to the buyer, during the funding/funds verification process?

The property won't transfer until the title is filed with the county (in most places in the US), who and when will that be done?

Now, mr seller, IF the buyer is going to finance the property, THAT opens up a whole new set of things that could go wrong with your example of a simplified transaction.

Too many for me to go into here. -

Oh yes, I could tell real estate transfer horror stories all night long -

Wanna hear about the time this kid pulled a gun on me, when I was representing FHLMC, repossessing a property he was using as a meth lab?

Oh, I will always recommend the services of a real estate attorney or a licensed real estate broker/agent to represent you in buying or selling properties.


humfrz - retired

[soundman98]

TLDR: could it be done?

yes.

are all of us retired and have way too much time on our hands to deal with it?

no.

[Captain Snooze]

My thoughts so far.

A solicitor is mandatory.

In the state where I live if one is selling a house then it is a requirement that Building, Pest and Energy Rating inspection is carried out.

A Real Estate Agency can not legally give a valuation. They can only give appraisals. One has to used a certified valuer to get a valuation.

I have been given a name who is a one person real estate agent whose fees are supposedly march less than big names in town. I am yet to have a chat.

This website is the largest FSBO site in Australia. I am yet to have a chat with them.
https://www.forsalebyowner.com.au/
From their website 1174 for sale, 672 sold over the preceding 12 months.

And yeah, I will have plenty of time on my hands.

I am still pondering the situation. I suspect I will not be able to make a completely rational decision. The thing that irks me the most is the real estate agent getting more money for selling more expensive houses when the work they do is the same regardless of sell price.