When it comes to selling your home, if you choose to do it without the help of a real estate broker, it is customary to let everyone know that you are doing so by putting up a sign that says “For Sale By Owner.” I have news for you. EVERY home is For Sale By Owner, because no one else is legally allowed to sell it.
If, on the other hand, you choose to hire a broker, your sign will probably just read “For Sale,” when it really should say “For Sale With Broker,” because they are helping you sell your home. But, so too is the title company, the escrow company and probably a real estate attorney. So, technically the sign should read “For Sale With Broker, Title, Escrow and Legal.” Maybe you should add the termite inspector too. A lot of professionals help a home owner sell their home, not just brokers.
I think the biggest mistake home owners make when selling their home without the help of a broker is to put up a sign that says “For Sale By Owner.” Who cares? It is not For Sale With Broker, why should it be For Sale By Owner? It’s just For Sale. If you want a tour of our home, here is a phone number. Give us a call.
Why bother differentiating? I think I know why.
In countries like the UK, where the average sales commission to a broker to help sell a home is only 1%, there not much difference financially between hiring a broker and not, so I suspect most parties do not give the commission a second thought. The same way most people do not give the escrow fee or title fee much thought. But in the US, where sellers are expected to pay a whopping 6% commission, which can be tens of thousands of dollars, everybody wants a piece of that: buyers, sellers and brokers.
By putting up a For Sale By Owner sign, the home seller is advertising who has the initial claim on that commission. And, more importantly, who the other parties should go after to get a piece of it. Brokers try to get their piece of it by attempting to convince the owner they would be better off hiring them. Buyers try to get a piece of it by submitting lowball offers on the order of, you guessed it, 6%.
I doubt any of this money grab takes place in the UK. The fee to a broker to help sell a home is so nominal, I doubt many people try to sell their own homes and also I doubt that buyers give that commission a second thought when it comes time to making an offer.
So, here is to doing away with For Sale By Owner signs and replacing them with simple, but elegant, For Sale signs. Here’s the home; here’s the price. If you want it, make an offer. If not, someone else will. It really shouldn’t matter who is or isn’t helping the owner sell it. Simple.
To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.