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For Sale by Owner: 4 pitfalls to avoid

Gail Johnson
Pay Day
MIAMI, FL - MARCH 26: A for sale sign stands in front of a home on March 26, 2013 in Miami, Florida. A report released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices showed average home prices increased 7.3 percent for the 10-City Composite and 8.1 percent for the 20-City Composite in the 12 months ending in January 2013. (Photo by Joe Raedle/Getty Images)

Legal fees and land-transfer taxes are two expenses that take a bite out of profits when it comes to selling real estate. Add in realtors’ commissions and it’s no wonder so many people consider putting a For Sale by Owner out on their front lawn.

For those who do decide to go it alone, there are pitfalls to avoid.

“Selling a property is not rocket science, yet some private sellers just don’t take the task seriously enough or don’t recognize the huge benefit of doing it right,” says Walter Melanson, director of partnerships at PropertyGuys.com, which charges a marketing fee to help people sell their properties.

Pricing it unrealistically

By far, this is the most common mistake people make. “The value of your home is the amount someone else will pay for it, not the amount you wish your home would sell for,” says Saleem Barnard, founder and principal operator of BC For Sale by Owner. “When selling a home, it’s common for emotions to be involved, and when you put an emotional value on your home, it may sit on the market for a long time.

“Buyers are armed with knowledge of what comparable properties are listed for and what they have been sold for,” he adds. “They will not pay a higher price if the market numbers do not justify it.”

Melanson suggests hiring a certified appraiser to help determine an accurate starting point. “The best strategy is to get an outside opinion from an expert who has absolutely nothing riding on your sale -- unlike agents,” he says. “This approach will help you create a pricing blueprint which will maximize your bottom line and allow you to sell within your desired time frame.”

Not leveraging technology

“Over the last decade, the Internet has helped transform non-agent marketing systems drastically, allowing sellers to use all kinds of tools that once were not available to them,” Melanson says, pointing to private websites, property videos, expert pricing virtual tours, social media broadcasts, the low cost MLS [multiple listing service] and call-answering and appointment-booking services, as just some examples.

Then there are free online classifieds. “These technologies allow so-called private sellers to level the playing field with those who use traditional agents, and for 10 times less money. These elements are not ‘nice to have’s but instead necessary in order to sell for top dollar.”

That MLS option is an important one, Barnard notes. In 2012, the Competition Bureau of Canada opened up the service to allow private sellers to list their property without having the full services of an agent.

“Depending on your area, you can often get an MLS listing for under $1,000,” Barnard says. “MLS has the largest database of homes in Canada, and putting a listing on MLS, along with other resources, allows for a large exposure that was once reserved for selling agents only.”

Not supplying photos

It seems laughable at this point, but Bernard says there are a surprisingly large number of online listings without photos. “On our listing service, listings that have photos receive 62 per cent more replies than listings that do not. Photos do not have to be works of art; aim for a clean, varied array of photos of your property and building.”

Not using legal experts the right way

According to Melanson, legal professionals do more than the paper work required to close the deal.

“The legal professional can become your most valuable adviser, and for less money than you may think,” he says. “By accessing expert legal advice and guidance throughout the private sale process, sellers not only get a heightened sense of confidence and peace of mind but also minimize [the chance of] any possible mistakes.”