When selling a home, what usually matters to most sellers is the bottom line… how much money they will have in hand after the sale is closed and all expenses are paid. Many sellers make a misguided connection between commission and the bottom line. For Sale by owners, in particular, usually feel that they can save the commission and end up with more money in hand. But rarely does that happen. And here is why:

1. You are missing the market. Very few buyers and even fewer agents go to For Sale by Owner websites looking for homes for sale. Almost all agents and almost all buyers search the Multiple Listing Service, either directly or indirectly, when looking for homes. There are some exceptions, of course, but they are few and far between. Whenever buyers are on any of the most popular home searching websites, such as Realtor.com, YahooRealEstate.com, MLSListings.com, ColdwellBanker.com, or any number of other sites, what they are looking at, in fact, is the MLS database. If yours is not there, they will not find it.

2. Most professional agents do not want to work with For Sale by Owner sellers. There are exceptions, to be sure. But real estate is much more complex than most people realize, and, being professionals, they prefer to work with professionals on the other side. Otherwise they may end up doing the work for both sides, with all of the liability and responsibility for both sides, but only get paid for one! If that doesnt bother you, it should, because real estate agents are the people who have the buyers. Very few buyers work without one. So, if the real estate agents deliberately shun For Sale by Owner sellers, you will, once again, be missing a lot of potential buyers.

3. For Sale by Owner sellers are notorious for either overpricing or under pricing their homes. Overpricing seems to be more common. In a lot of my conversations with For Sale by Owner sellers, they have told me that they thought the agents they had talked to prior to putting their home on the market had priced their homes too low, so they decided to sell for themselves. Part of a real estate agents job is to assist and guide the sellers in selecting the list price of the home. If you dont heed their advice, you are asking for a lesson learned the hard way!

3. Real estate agents do not like to work for free. So, if they do bring a buyer to your listing, they will expect to get paid if they sell it for you. There goes 3%, maybe less if you are working with an inexperienced agent. But in this area the experienced, full service agents still charge 3%.

4. In the meantime, you will find that all of those newspaper ads can be very, very expensive. You can easily spend what you would have spent on a listing side commission just advertising in the newspaper. If you add up the marketing costs (especially if your home does not sell right away) plus the commission to the buyers agent, you may find you have not gained anything at all. Or, you may end up with less that you had planned, especially if your house lingers on the market and the bottom feeders are the only people interested.

5. Part of the reason to hire a listing agent in the first place is because that person has special training in marketing and in negotiating. One simple little sentence, uttered at the wrong time or to the wrong person, can cost you many thousands of dollars, more than what you would pay that agent in commission. In this market you should have buyers trying to outbid each other for your property. If that is not happening, you are losing money. A professional agent knows how to generate multiple offers and what to do with them if and when they do come.

6. Last, but not least, there is the liability issue. There is no question about it. People in California are sue crazy. Give them any excuse and they will sue you. Recently a buyer sued a seller, after escrow closed, because a plane flew over the house one night and the seller had not disclosed that planes sometimes do fly over the house. This buyer brought a suit to have the entire transaction rescinded and to also collect damages from the seller. While there are no guarantees, part of the listing agent's responsibilities lie in trying to protect you, the seller, from this sort of thing happening.

I would love to reach out to the people selling the house that prompted this article to explain some of these issues to them. But their phone number is on the Do Not Call list. I cannot call them unless I have a specific buyer who might be interested in their home. The best I can do is mail a copy of this article to them and hope that they will contact me to see what else they can do to sell their house. If they do contact me, I will have one recommendation for them. Guess what that will be!

For more information go to: http://www.puttinguptheforsalesign.com/index.php/2006/03/03/home-sellers-is-your-listing-agent-the-reason-your-homes-not-selling 

© By Lynne Mercer, March 2006

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