In today's do it yourself world we often learn the hard way that sometimes it may be easier to pay someone. There is an article in today's NYT Smarter Living section that suggests the importance of knowing one's strengths and weaknesses. Click here. Let's face it we can't be a jack of all trades in everything.
How often do you try to fix something minor at your house only to make it worse. My husband recently tried this with a sink faucet and accidentally broke the inner faucet valve and now we need to replace the entire fixture. Sadly this model has been discontinued and we now need to replace both sides. Lesson learned, it cost more in the long run to do try to save a few bucks. If you buy do-it-yourself furniture for one of your kids who is moving to an apartment out of state you can spend money to travel to help build the furniture (hotel $300 night, meals $150 plus, transportation $100) or you may be able to hire someone from Task Rabbit to build it for under $75. Your choice!!
Although both of these experiences were not significant in monetary value they highlight the overlooked aspect of how a well thought out plan can go wrong. Always think time and money when factoring in a business transaction. I always ask myself to think about the opportunity cost if I go one way when another approach may be more effective, produce a higher return and save me time in the long run.
As a realtor I am quite sensitive to this when I see potential sellers who want to sell on their own. As a FSBO (for sale by owner) a seller is taking all the risk of selling a property into their own hands. Statistics show that in the long run a seller will yield a higher sale price by using a realtor and will more than cover the commission. Further selling a property is a legal transaction and a seller must fully understand his or her legal obligations of disclosure as mandated by local regulations and Massachusetts State law prior to entering a contract with a potential buyer. These regulations are constantly being updated and a realtor's job is to know these regulations.
By selling privately the seller risks the level of market exposure of MLS to bring the maximum number of buyers in the common market. An example of this is highlighted here. He/she will spend a lot of time selling and may not be as savvy in asking the best price. An independent agents sole job is to represent the seller and do everything possible to help the seller best position the property.
Selling a house on your own is great if it sells quickly but if not this can become a challenge when you are the one showing it to potential buyers. Can you separate your emotions from the business side of the process? Do you want to tie up all your time to meet the buyers needs? After an accepted offer there are times the buyer will need to visit the property for inspections, work estimates and other tasks up to the close. There is a lot of hands on work that realtors do to make the transaction go smoothly to alleviate the time constraints on the seller. Remember time and money are key.
Next time you get the urge to do something on your own think out the process and ask yourself if it will really save time and money in the long run. Chances are you are better off hiring a professional to do the job at hand using their hard learned expertise. You will be happier and less stressed. (Incidentally inventories are at an all time low and this is a great time to sell while interest rates are still reasonable.)
Wendy is a realtor with Coldwell Banker Needham. She works in both the metro-West Boston area and the lower Cape. She loves working with first time buyers, sellers who may be downsizing and anyone else who is an enthusiastic client. Check out her website www.wendybcb.com.
Showing posts with label FSBO. Show all posts
Showing posts with label FSBO. Show all posts
Thursday, April 26, 2018
Tuesday, June 6, 2017
Which do you value more Time or Money?
There is often an interesting paradigm when I ask this question to my friends and family members. On one hand it may seem more practical to do something yourself as it would save you money but on the other hand, it could end up costing you more time than expected. Perhaps this would have been time you could have spent at work or vacationing. If you factor in the amount you are paid per hour, perhaps this is lost income and it would have been more effective to hire someone to do the job. This can be a common dilemma when it comes to smaller household projects and it may come down to the pleasure factor, if in fact, you enjoy cleaning your home, mowing your lawn or assembling a piece of IKEA furniture.
When you get to projects on a larger scale usually it is more cost effective to hire a professional to get the job done. For example, a tax accountant may be able to put together your return in a few hours and save you money by locating tax deductions you were unaware of. You could alternatively spend a full weekend doing a return and end up missing some key deductions.
The old saying that "A penny saved is a penny earned" is not relevent when one is making a large monetary or life changing decision. I have learned the hard way that in the long run it is always best to hire the person who will do the best job to get something I need done. Even with IKEA furniture, we have had to deal with the long lines at the store in the midst of putting a dresser together only to realize a critical piece was missing. For a small amount more we could have paid someone to assemble and deliver a comparable piece of furniture and be done in an hour vs spending a good Sunday afternoon to get to the same point.
In the real estate business it is always best to work with someone who knows the local area and market conditions. A realtor will interview the buyer or seller to gain an understanding of their specific needs. Their sole job is to work for the interest of the client to help them buy or sell a house. They do not get paid until this job is complete. It is recommended to do your research upfront but to work with an expert to guide you through the search or sell process.
Too many times have I seen first time buyers spend months trying to search for a property, only to be unprepared or well positioned when ready to make an offer. They often lose out to the buyer working with a realtor negotiating on their behalf to seal the deal. The buyer needs to be in a competitive position with financing and readiness to understand the best terms when making an offer. A buyers agent works on their behalf to help them be positioned and find the best property. The cost for this service is most often paid through the sellers commission to the buyer and seller agents. For the buyer, there is no real logic for doing this on their own.
Sellers often think they may save money by going about their property sale by themselves. How many times do you drive by a house that says FSBO "For Sale by Owner" one day and then see it hasn't sold a month later. In the longer run, the house hasn't had full market exposure, may not be well staged or may be overpriced.
A seller agent would have guided the seller to best prepare this property for the optimal market exposure. The commission fee they tried to avoid will be covered if they can sell their home quickly and for a competitive market price vs having the price driven down by keeping it on the market too long. For the seller side to answer the true question of "Why" one must also look at sales statistics. Typically the home sold through a professional sells for 10-15% more therefore offsetting the commission cost. On the time side, the seller who sells on his own will need to be available whenever a showing is requested. In addition, once the home is sold often the buyer needs access to the property for inspections and follow up items. A sellers agent will be there to help with these appointments and follow up on some time consuming things that may need to be handled along the way.
A well trained agent will advocate and help a buyer search for a property. They will be able to walk a buyer or seller through any issues that may arise and refer the client to appropriate professional services as needed. In addition, it is a real estate agents job to provide relevant buyer information to a prospective buyer that may influence the buying decision. The agent has a wealth of knowledge about the area and can refer the buyer to well known vendors or service professionals already well vetted.
Beyond mandatory disclosures a seller is not obligated to disclose every issue about a property unless asked. An experienced agent will lead the buyer to ask the right questions or prompt the buyer to have the appropriate professional inspect the property if he or she senses some concern. Someone who tries to purchase a property without a professional runs the risk of being mislead. On the seller side, an agent will advise the seller on which information must be shared with prospective buyers. Someone who misinforms a buyer may be subject to liability. Laws are constantly changing and both the buyer and seller have an increased risk of errors and liability if they are not properly guided through the transaction process. I encourage both buyers and sellers to seek out professional services to help them save money and time in the long run. This is when the saying "Time is Money" can be true.
Wendy recently joined Coldwell Banker Needham. She has been a realtor for over 8 years and knowing the area quite well can share a hands on local perspective. She has also recently earned the SRES designation and looks forward to helping other baby boomers as they approach their next transitions. Feel free to contact her directly or click here http://www.wendybcb.com if you would like to learn more.
When you get to projects on a larger scale usually it is more cost effective to hire a professional to get the job done. For example, a tax accountant may be able to put together your return in a few hours and save you money by locating tax deductions you were unaware of. You could alternatively spend a full weekend doing a return and end up missing some key deductions.
The old saying that "A penny saved is a penny earned" is not relevent when one is making a large monetary or life changing decision. I have learned the hard way that in the long run it is always best to hire the person who will do the best job to get something I need done. Even with IKEA furniture, we have had to deal with the long lines at the store in the midst of putting a dresser together only to realize a critical piece was missing. For a small amount more we could have paid someone to assemble and deliver a comparable piece of furniture and be done in an hour vs spending a good Sunday afternoon to get to the same point.
In the real estate business it is always best to work with someone who knows the local area and market conditions. A realtor will interview the buyer or seller to gain an understanding of their specific needs. Their sole job is to work for the interest of the client to help them buy or sell a house. They do not get paid until this job is complete. It is recommended to do your research upfront but to work with an expert to guide you through the search or sell process.
Too many times have I seen first time buyers spend months trying to search for a property, only to be unprepared or well positioned when ready to make an offer. They often lose out to the buyer working with a realtor negotiating on their behalf to seal the deal. The buyer needs to be in a competitive position with financing and readiness to understand the best terms when making an offer. A buyers agent works on their behalf to help them be positioned and find the best property. The cost for this service is most often paid through the sellers commission to the buyer and seller agents. For the buyer, there is no real logic for doing this on their own.
Sellers often think they may save money by going about their property sale by themselves. How many times do you drive by a house that says FSBO "For Sale by Owner" one day and then see it hasn't sold a month later. In the longer run, the house hasn't had full market exposure, may not be well staged or may be overpriced.
A seller agent would have guided the seller to best prepare this property for the optimal market exposure. The commission fee they tried to avoid will be covered if they can sell their home quickly and for a competitive market price vs having the price driven down by keeping it on the market too long. For the seller side to answer the true question of "Why" one must also look at sales statistics. Typically the home sold through a professional sells for 10-15% more therefore offsetting the commission cost. On the time side, the seller who sells on his own will need to be available whenever a showing is requested. In addition, once the home is sold often the buyer needs access to the property for inspections and follow up items. A sellers agent will be there to help with these appointments and follow up on some time consuming things that may need to be handled along the way.
A well trained agent will advocate and help a buyer search for a property. They will be able to walk a buyer or seller through any issues that may arise and refer the client to appropriate professional services as needed. In addition, it is a real estate agents job to provide relevant buyer information to a prospective buyer that may influence the buying decision. The agent has a wealth of knowledge about the area and can refer the buyer to well known vendors or service professionals already well vetted.
Beyond mandatory disclosures a seller is not obligated to disclose every issue about a property unless asked. An experienced agent will lead the buyer to ask the right questions or prompt the buyer to have the appropriate professional inspect the property if he or she senses some concern. Someone who tries to purchase a property without a professional runs the risk of being mislead. On the seller side, an agent will advise the seller on which information must be shared with prospective buyers. Someone who misinforms a buyer may be subject to liability. Laws are constantly changing and both the buyer and seller have an increased risk of errors and liability if they are not properly guided through the transaction process. I encourage both buyers and sellers to seek out professional services to help them save money and time in the long run. This is when the saying "Time is Money" can be true.
Wendy recently joined Coldwell Banker Needham. She has been a realtor for over 8 years and knowing the area quite well can share a hands on local perspective. She has also recently earned the SRES designation and looks forward to helping other baby boomers as they approach their next transitions. Feel free to contact her directly or click here http://www.wendybcb.com if you would like to learn more.
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