Being in the Real Estate World, we hear lots of opinions and myths about For Sale By Owner Transactions. A few weeks ago, an area Real Estate Attorney (Chris Mann) posted the following on his Facebook feed and has given permission for it to be shared. Enjoy his Wisdom!
This is your mid-week real estate class with Chris.
If you are sitting at home thinking about selling your house and are all "This market is hot. I can sell this house without a real estate agent and I can save a bunch of money on that commission. People that hire real estate agents are suckers." You are making an expensive choice.
The only time I ever see an appraisal come in where the buyer paid tens of thousands below the appraised value are houses in which the seller didn't hire an agent to represent them. They saved $10k on a commission and got $24k less than the house was worth.
Most of the time I see a $10k+ seller repair credit during due diligence its when a seller decided they didn't need an agent, and the buyer/buyer's agent out-negotiated them on repairs.
Every so often I'll get a call where a buyer doesn't want to hire a real estate agent because "I'll be able to save a bunch of money since the seller won't have to pay a commission." I'm going to be frank: This is dumb.
I can promise you, if you are asking me to do what a real estate agent would normally do, I am going to charge you more than what a real estate agent would cost. I went to a fancy expensive law school. My services come at a price.
The worst and most hostile transactions we've ever had are the ones where both parties thought they could do it all without a real estate agent and immediately after going under contract realized they didn't know how to get from there to closing and tried murdering each other. It's just not worth it.
And finally.. if you are walking onto a new home site without an agent, you are making a weird and avoidable mistake. Builders are great. But they are in the business of selling a product to you at as high a price as you are willing and able to pay. They do this thousands of times a year. They are good at it. Bring your own representation.