“For Sale By Owner”

For Sale By Owner, tempting, but is it really a wise move for a seller? Last week the Wall Street Journal has an article on this topic again, “How to Sell Your Home Without a Real-Estate Agent,” it sounds like a “how-to” guide. They open with, “why not save 6% commission fee? Here are some websites where you can pay to directly list your house as an owner, and here are some things to watch out for.” But even this piece acknowledges that 70% of homeowners who try selling by themselves end up using a broker.

First of all, this article does not apply to Manhattan. Owners here are too busy to take on listing and showing their own property. Most people work full time, how can you schedule showings in the middle of the day, or with very little notice.

Secondly, it may seem like you know your own apartment better than a broker could, but owners tend to be too emotionally attached. I have found it is never good when a buyer and seller talk directly, it helps to have a neutral party going over the details and handling negotiations. An owner knows more about their space, but most information is irrelevant and becomes excessive and off-putting.

Buyers are not comfortable looking at spaces when a seller is hovering over them. Often actual buyers are right under your nose. I have sold several apartments to neighbors, who would never have approached an owner directly, the transaction would have been too personal.

One thing the WSJ gets correct is that you must have a good real estate attorney, that is absolutely true. The article suggests some safeguards like requiring earnest money, something I have never seen that in New York City. A broker’s job is to evaluate a buyer, and send along a contract once a deal is reached, move things along with reputable parties. The WSJ also recommends appraisals, but an appraiser uses what has sold over the past year to reach a value, and the Manhattan market changes so quickly only a broker will know if a price from eight months ago is outdated. The key is to pick a good broker. People are allergic to brokers and see us as parasites, but those are bad brokers. Find one who works for you, and make sure you hit it off and know they will represent your property correctly.

Of course I am biased that brokers provide an essential service in a sale, but I do believe it is true, especially in New York City. I don’t hesitate to tell people that now is not the time to sell, I pride myself on giving real advice. If the time is better to rent, I will tell owners where their money is better spent, even if it means no commission for me. For Sale By Owner, I can see the appeal to save some money, but it rarely works.

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