For Sale by Owner: Off MLS Listing is Risky Business

Since 2013, there has been an increase in sellers pre-selling properties and listing them off the Multiple Listing Services(MLS). Core Logic reported that in 2013, 53% of real estate transactions conducted in the U.S. were not listed on the MLS. Most sellers do not hold a real estate license, and are not permitted to use the MLS - the standard listing portal for a licensed real estate agent. Although buyer’s agents are willing to work with For Sale by Owner (FSBO) listings, they are not permitted to give the seller any advice or access to marketing. 

Sellers who want to list a FSBO may be losing out on tens of thousands of dollars in real market value on a property, especially if they list properties without an up-to-date appraisal or current market research. Often a seller will list a FSBO based on the sale price of a neighbor’s home, which may or may not be the best choice for a comparable property. A local real estate agent lists properties continuously in their regional sales area and is best suited to offer a market comparison in the neighborhoods he or she covers. Remember, tax assessments, though readily available, are not the best tool for gauging a property’s true market value at any give point in time.

One nuance about FSBO sales that should give sellers pause is the fact that an experienced buyer’s agent may hold the upper hand in a FSBO real estate transaction. Why? The seller may not be familiar with state laws and fiduciary codes and/or ramifications of contract issues that crop up during negotiations. Even with a lawyer creating a real estate contract on a property, the final outcome of a For Sale By Owner (FSBO) real estate sale may be held up over a variety of issues. Experienced REALTORS know how to circumvent these roadblocks quickly and keep a property transaction on track.

FSBO is Not Equal to a REALTOR’s Advertising Potential
Working with a professional REALTOR is worth the commission under these circumstances. A FSBO has a limited opportunity for marketing, becoming more heavily reliant upon web real estate portal sites such as Zillow.com. With a seasoned agent, advertising penetration for a property is far greater. For example, I list my properties for sale in Williamsburg, Virginia on four MLS websites. This gives my sellers and extensive area of coverage so that other agents can see the listing and buyers on the MLS can also see it. My MLS listings are also republished on Realtor.com, which is owned by the National Association of Realtors and is also a reputable website in the industry. My broker, Coldwell Banker Traditions, also has a listing mechanism on its locally based website, where my client properties receive excellent visibility. Not all REALTORS list properties this widely on the Web, so check with individual real estate agents and ask them for specific information about advertising provided for client listings through MLS and other venues on the Web.

There are other disadvantages to listing properties without an agent. If the owner happens to miss a showing with a potential buyer, he or she may miss the opportunity to sell a property altogether. For real estate sales in my territory, Southeastern Virginia, an owner is not permitted to use legal forms created by the Virginia Association for Realtors (VAR), unless they are licensed.   Real estate forms are formally copyrighted by the VAR and sanctioned for use only by membership. This puts the seller at another distinct disadvantage in the transaction. Having to create legal forms anew is not only time consuming, it may increase costs for an attorney.

            Besides some of the more obvious advantages to listing with a licensed real estate agent, there is also a common misconception that the use of a real estate lawyer will save money versus paying agents’ commissions. The seller still has to pay the buyers agent fees (which is variable by state and type of real estate transaction). All FSBO sales contracts must be created and finalized with a lawyer. The sales process involves having the buyer read the contract and make changes. The lawyer revises the contract appropriately and it is presented at closing. Lawyers in Virginia charge far more to create an original contract (in my experience) than the commission on the seller’s side - in most instances. Sellers who want to go it alone should seriously consider the lawyer’s fees may be more expensive, and are largely unpredictable, depending upon the number of legal forms needed, length of negotiations and additional contract requirements.
          
            Sellers need to forgo the FSBO and get smart in a real estate market that is definitely on the move in many regions of the U.S. Pricing is trending higher in the 2014 market and inventories are low in many markets. So sellers need to have expert advice on pricing real estate at current market value now - more than ever. In addition to potential loss of profits from home sale, the seller may easily run up against legal and contract issues that may not be quickly resolved. Worse yet, these matters may be settled too late to adhere to the time limits on certain loans such as FHA and USDA. If the seller does not know what they’re doing and timeframes are not heeded, this can cause the buyer to forfeit a loan. In turn, the property loses a good buyer and valuable time on the market.

Be wise and don’t engage in risky business – listing a property off the MLS or without a licensed agent. It is best to have the representation of a licensed agent for a variety of reasons. The main reasons are: the seller will have expert advice, will most likely sell the property sooner and the property will command a fair market price. Say no to FSBO. Instead, seek out a capable real estate professional in your region for piece of mind.     

Visit: http://www.voncannonrealestate.com/articles/for-sale-by-owner-off-mls-listing-is-risky-business.php

Renovations and Upgrades: Bring it to the Bank - Part 1

Elaine VonCannon, ABR, SRES, REALTOR, Notary Public, Team Manager

Renovations and upgrades can increase the value of your home by thousands of dollars when done strategically, intelligently and professionally. Even if you renovate for personal reasons, consider the key areas that will put money back in your pocket. The kitchen and the bathrooms are first choice upgrades that translate into more money later. Bedrooms can also create incredible appeal or end up a serious turn off. Make certain your renovations or upgrades reflect the property values of your neighborhood. Don't overdo it with costly materials if you cannot recoup your costs when you sell your property.

Five Secrets To Upgrading The Kitchen
The kitchen is the heartbeat of a home; everyone goes to the kitchen. When you are entertaining guests the flow often moves to the kitchen. The kitchen is also a key component for any homebuyer. If you follow a few basic suggestions your upgrade decisions will serve you well in the long term. If you are still dwelling in the house think about what works best with your lifestyle.

Always consider functionality and durability when you construct kitchen countertops. First, don't use tile countertops. Grout is difficult to clean and ages quickly unless it is sealed properly. If you have a lot of children or cook every night, you may not want to use newer, porous material since it scratches easily. Second, when altering the kitchen cabinets you can paint wood, but use washable paint, not water based paint. If you do not want to paint or replace all the cabinets change the hardware or consider adding new doors. Third, wallpaper in the kitchen is not a good idea. The heat and grease builds up and it is not very durable. Most people either love or hate wallpaper. Eighty percent of my buyers do not prefer wallpaper. Fourth, evaluate the cost of flooring alternatives like high-grade vinyl, wood flooring or ceramic tile. Do not use "stick 'em" tiles because they do not wear well and can detract from the value of your kitchen. Fifth, update the sinks, faucets and light fixtures for a bigger pay off. Most importantly be sure the kitchen is bright, airy and cheerful. These recommendations will increase the attractiveness and value of one of the most important rooms in the house.

Bathroom Do's and Don'ts
The bathroom is another room buyers love to examine carefully; you will want it to have a lot of appeal. If you can see a ring around your tub for each child then it's time to replace or reface it. The shower and bathroom tiles must be clean, replace tiles that are in bad shape. Ceramic tiles are the best choice for flooring and new sinks. Be certain the grout and caulk are orderly and neat. New counters, sinks, light fixtures and cabinetry will enable you to get more return on your investment. Do not use wallpaper, since it does not hold up well in a moist environment.

Everyone Needs Personal Space
In a home the bedrooms become each person's sanctuary. The layout and bedroom size can affect the appeal of your space. If you have small bedrooms consider taking a wall or two out and opening the space up. For example, five small bedrooms can be transformed into three larger bedrooms. If the home lacks in closet space closet organizers can help maximize space. Freshen up the light fixtures; even match them to individual décor. A chair rail or crown molding also adds value. Of course, upgrading the carpet or wood floor also makes the rooms more enticing. When you replace the carpet buy high quality padding, despite the added expense. Cheap padding will not be a long lasting upgrade.
Time is Up... Tune In next Time!

Now that you have some tools, you are ready to make your first steps towards a better home. Thinking strategically is the key to increased value and perfect home improvements. Two more important tips: keep all of your permits on file when you decide to resell and consider hiring a professional when renovating your home. Good luck with your current projects! Visit http://www.voncannonrealestate.com/articles/Renovations_and_Upgrades_Bring_it_to_the_Bank_Part_2.php for Part 2 of "Renovations and Upgrades: Bring It To The Bank" to learn more about the other rooms in your home, exterior maintenance and the importance of garages, fences and more.