Selling For Sale By Owner

Recently, a marketing company that assists consumers in selling their home for-sale-by-owner, placed an advertisement stating reasons why today's home sellers can successfully market and sell their own homes without real estate agents.

Within this advertisement were statements and comments made that were grossly inaccurate.  While the advertisement was not intended to specifically market Illinois home sellers, Mainstreet believes that we need to correct these inaccuracies so that our home sellers in Illinois remain informed.

The MLS that covers Northern Illinois is called Midwest Real Estate Data (MRED).  MRED is a REALTOR owned MLS that only allows two types of listings, both of which are exclusive.  Neither home seller nor marketing companies can post listings to this MLS on their own.  A home seller must enter into an exclusive listing agreement with an MLS Subscriber (REALTOR) in order for their home to be placed into the service.

MRED allows two types of listings.  The "Exclusive Right to Sell Agreement" gives rights and responsibilities of marketing and selling the home to the REALTOR, while the "Exclusive Agency Agreement" allows the seller the opportunity to market their home on their own in addition to the exposure of the MLS.  This type of agreement will require that commission be paid to a buyer's broker, if the MLS is where the buyer is procured from.

Some marketing companies will offer packages called "Platinum," "Gold," or "MLS Listing" that specifically state that the home will be placed in the MLS.  If you read the fine print, you are notified that a broker will contact you to fill out the MLS paperwork.  In Northern Illinois, this "MLS Paperwork" is an EXCLUSIVE LISTING AGREEMENT as no listings are allowed in MRED without an exclusive agreement. Through that broker, your listing is placed into the MLS, not by a marketing company.

In Illinois, when you enter into an exclusive agreement, you are entitled to specific services that are required pursuant to Illinois real estate law.  This means that when you purchase the Platinum/Gold/MLS Listing package from the marketing company, you are also entering into an exclusive agreement which requires the broker to do the following:

1. Accept delivery of and present all offers and counter-offers to you.
2. Assist you in developing, communicating, negotiating, and presenting your offers, counter-offers and notices until you accept a contract. 
3. Answer all of your questions related to those offers, counter-offers, notices and contingencies.  

Still sound like you are selling for-sale-by-owner?  Make sure that you read any contract before you sign it to ensure that what you think you are getting is what you actually ARE getting.  

With all this said, you can avoid all of this trouble and confusion by simply trusting your home with someone who can be depended on to help you negotiate, guide you through the home selling process, market your home in innovative ways, provide objective evaluations of every buyer's proposal and someone who just knows real estate - a REALTOR. 

For Sale By Owner

In a market like this, more and more people are asking themselves, "Why should I use a REALTOR?  They aren't selling homes any faster than what I can do on my own, right?"

I do work for the REALTOR Association so I am obviously a proponent of using a REALTOR. I am not going to discuss in this post the benefits to using a REALTOR. What I am going to discuss is things to really and truly think about before you decide to become a For Sale By Owner (or as we in the real estate industry like to call FSBO) . Maybe FSBO is not the best route for you and your family.

Some factors effecting how fast your home will sell -

• Price -
  
  • What is my home really worth in this market?  Am I overpriced?  Could I actually be under priced?
• Quality - 
  • What updates and changes will give me the most bang for my buck?
  • In our economy, spending needs to have a positive effect on my pocket book in the short run and long run.
• Marketing - 
  • Do people know why they should buy my house as opposed to the guy next door?
  • Am I out there in front of the right people?
  • Am I being too conservative with my pricing?  A market like this is hard to judge without having the pertinent information.

What changes can I make that are going to give me the best outcome when I go to sell my home?  Should I change the carpet, paint the walls??? If the carpet is not going to effect the speed of selling my house, but that paint job is, a REALTOR is going to know it (okay, so I did just plug using a REALTOR).  I don't know about you, but right now is not the time for me to go out and purchase anything unnecessary, and any unnecessary update to my home could cost me hundreds and earn me nothing. 

Who needs to see my home? How should it be presented? I don't know about you, but I would not have any clue where to even start marketing, and it would be a waste of my time and money to try. Experience goes a long way in the field of marketing, why waste my money marketing my own home if I don't even know who wants or needs to see what I have to offer?

Some other concerns to consider when selling a home For Sale By Owner -

• Time Frame - How long can I wait around for that "right" offer?
• Safety - What kind of control do I have when people are coming in to see my home?
• Paperwork - Do I know what I need to legally provide as paperwork?  Do I need any kind of disclosures?  Am I comfortable enough with the "language" of a contract to know what I am filling out?  Do I have all of the significant information needed from my buyer?

Do you feel comfortable letting people come in and out of your home?  Licensed REALTORS (okay, another plug) have access to lockbox systems through their Association.  With these lockbox systems, your agent can see who has been in your home, when they were in there, and how many times they have been in.  If there are any issues with damage to the home, your REALTOR is going to be able to regulate what is going on.  Agents are able to restrict who has access to the home and when access to the home is allowed.  These systems create a great sense of security when you are away and someone is viewing your home.

Last, but certainly not least is the paperwork. Is what I have here legally sufficient?  What is seller disclosure? These questions and, I'm sure, many more come to mind in regards to what kind of paperwork needs to be filled out for the sale of a home.  Depending on the age of the home, location of the home, if there are any material defects with the home, etc., there are disclosures required by law that need to be provided.

Phew, that's a lot of work to think about. Is selling your house FSBO the route you want to take? You decide!