A question we get from time to time is what are the common pitfalls of selling by owner?  It’s a great question, so let’s dive in.

Common Pitfalls of Selling By Owner

Common Pitfalls of Selling By Owner

The first pitfall is legal.  Most sellers don’t realize the regulatory pressures they are under, whether they sell by owner or with an agent.  The state has jurisdiction over property, homeowner, and condo disclosures.  The federal government has jurisdiction over issues like lead-based paint disclosures, waterways, docks, etc.  We’re lumping the Army Corps of Engineers in with the federal government.  Missing any one of these important disclosures could cost you a sale, or worse, a lawsuit or fine.

Security is another issue that concerns sellers.  They want to know who is coming into their home.  Sellers are concerned if the prospect is an actual buyer, or someone who is looking over the contents of the home only to come back later and rob the place.

The Buyer’s ability to pay for the home might be one of the largest concerns sellers have.  When selling by owner, asking this question can be tenuous.  The buyer feels like it’s none of your business and their finances are their business.  But it is the seller’s business.  As a Realtor, we can ask those tough questions and demand proof.  It’s what we do, and if a buyer is skittish about answering, it bears more questions.  Realtors with experience can read more into what’s being said and uncover more facts.  Red flags should never be ignored.  Newer agents, and For Sale By Owners don’t always see the red flags, and when they do, they don’t know how to handle them.  Security might be the biggest of the common pitfalls of selling by owner.

Marketing is critical to getting top dollar.  It doesn’t do much good to save a commission and lose money at the same time.  I’ve seen 3 studies that show For Sale By Owners sell for 6%-16% less than using a real estate agent.  Essentially it costs you nothing to use an agent but could cost you thousands not to.  Placing your home online in a few places isn’t marketing.  It’s simply listing it in a directory.  A few buyers might notice it, but you’re not getting it out to the masses.

Sure, you’ll get some calls from people looking to flip homes and unqualified buyers, but nothing that is going to close or gain you top dollar.  If you doubt us, just try it and see how you fare.  Then call us after a few weeks and we can change that for you.

Are All Realtors the Same?

All Realtors are not the same.  If some Realtors have a hard time marketing a home, imagine how hard it is for a For Sale By Owner.  Again, just placing it in MLS and putting a sign up is not marketing.  You need much more than that to get the word out.  If all you attract are unqualified buyers and just a small percent of the market, you’re not attracting top dollar.

Imagine putting an item for sale in an online auction.  If you had one bidder, you might sell it.  If you had 10 bidders, it’d probably go for more money.  If you had 1,000 bidders, it would sell for more than if you had just one bidder.  Full market exposure equals Top Dollar.  Less than that equals less than Top Dollar.

The Agent You Hire Matters.  The Ellis Team markets your home for all it’s worth.  We shoot for Top Dollar.  Why be satisfied with one buyer when you could have several to choose from? Our marketing generates lots of buyers.  We can bring all the buyers you’ll ever need, but if the home is not priced correctly, they’ll just go buy something else. We’ll help you avoid the common pitfalls of selling by owner.  See also 3 Reasons Why Homes Fail to Sell.

Check out www.swflhomevalues.com to get an idea of what your home may be worth.  Our computer is very good.  In fact, it’s the best we’ve ever seen by an automated valuation service.  However, it it not perfect and there is no substitute for having Sande or Brett come out to your property and doing a comparative market analysis.

Or you can Search the MLS like a pro at www.LeeCountyOnline.com

If you have a home to sell Always Call the Ellis Team, your Top Dollar Realtor!  239-489-4042 Ext 4  ask for Sande or Brett.  We’re here to help.  Sande Ellis and Brett Ellis are a mother-son team and have over 30 years experience selling homes in Southwest Florida.  Brett and Sande personally visit each property and do an in-depth analysis of the price as well as strengths of the property.  This is important because if we’re going to reach the best target buyer for the home, it pays to know every detail that may attract that best buyer.

Of course, many times our marketing attracts multiple buyers.  This is good news for sellers when we’re able to do this as it typically brings a better price for our sellers.  Imagine an online auction.  If you had  an item to sell and had 10 buyers, you’d fetch a certain price.  But if you had 1,000 buyers, the price your item would fetch might be much more, wouldn’t it?

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Back in February we posted real estate inventory levels for SW Florida and reported a fairly stable inventory market.  Back in January the market was strong, but since then agents have complained about a shift in the market.  Properties are selling.  We’ve got a great market, however there have been some changes the last few months so we’ll bring you up to speed.

SW Florida Post Season Real Estate Inventory Levels April 2016

SW Florida Post Season Real Estate Inventory Levels April 2016

Almost all categories have increased in the past few months with 2 exceptions.  The below $50,000 range and the $400,000-$600,000 range.  The change below $50,000 is so small and there are so few properties involved it’s not worth talking about.  The $400-600k range is a bright spot.  Active listings went down in this range and closed sales have increased.

SW Florida Post Season Real Estate Inventory Levels April 2016 February

In the past year we’ve had 1,254 sales in the $400-600k range.  Back in February we only had 1,093, so that’s helped lead to a decrease in supply of inventory. There were 1,271 on the market back in February and 1,206 now, so most of the change has to do with increased sales.

Overall the market has increased to a 5.84 months supply, up from 5.03.  The change in sales won’t look as dramatic as month over month sales data from last year because it’s average over the last 365 days, but this is a fairly significant swing given the 2 month window.

At close to 6 month supply I’d say we have a pretty balanced market.  If your home is on the market over $400,000 you’re looking at a year plus to sell your home on average, unless you take steps to win the selling game.

Remember, your home is in competition with all the other homes for sale.  You’re not really in competition with the buyer.  The buyers will look at all options and decide on what is best for them.  The goal is to make your home valuable in the marketplace.  Obviously your home has value.  The question is, does it have as much value to the buyer as it does to you?

When the sellers set the price equal to its value, it will sell.  If a home has a value to the seller at $1 Million dollars but has value to buyers at $500,000, it will not sell.  This is one reason you see so many professional athletes retire.  Perhaps they see their value at $5/million/yr.  Ball teams see value in them too, but the athlete is getting older, susceptible to injury, and not the team’s future.  They may be willing to pay $1.8 million for one year and the athlete is holding to $10 million over 2 years.  When the value is not equal to the price, there is no market for the athlete and they retire.

Some star athletes are trouble makers and have issues.  Perhaps they’re a $10 million/yr player, but because they have baggage and potential to affect other players, teams won’t take a chance on them.  At a lower price, somebody will take a chance no matter how many issues you have.

Right now there isn’t a high market for Johnny Football.  Even his agents have dropped him.  He has baggage and needs to deal with his issues.  If he had no issues he’d be worth a lot more.

The same is true in real estate.  The market changes monthly, and just because you feel your home is worth X doesn’t mean the buyers will.  I can assure you though, when your price equals the value in the market, it will sell, even if your home has issues.  The more you deal with the issues upfront the more value your home will have.

If you’d like to search the market, or your home’s value, feel free at www.LeeCountyOnline.com If you’d like to talk to a professional agent about how to maximize your value, call the super agents on the Ellis Team 239-489-4042.  If you’re a Star athlete, we can’t represent you with ball teams, but we can help you find the perfect home.

Good luck and Happy House Hunting!

Ellis Team Featured Property of the Week

2110 SW 13th St Cape Coral FL– 2,256 Sq Ft pool home built on 4 lots with stainless steel appliances, engineered wood floors throughout the home, and wood cabinets.  Also view virtual tour.