Selling home not an easy do-it-yourself project

Dear Ms. Mortgage Maven,Can you give me information on selling my property myself? My wife and I are expecting our second child, and we want to buy a larger house. Since we need every penny from the current house to put down on the next house (the average price in the neighborhood we want is about $650,000), I thought I could sell the house myself without a realtor. I see "FSBO" (for sale by owner) signs in front of other properties that are not as nice as mine, so I figured that if they could do it, I could do it too.

Thanks!

Lawrence M.

Dear Lawrence,

If you want to maximize the profit on the sale of your current primary residents, I strongly suggest that you hire a licensed real estate agent. During the recent real estate boom, it seemed that real estate agents did not have to do much to earn their commission - they seemingly just hung a "For Sale" sign in the front yard and watched multiple offers pour in.

In today's market, it is more important than ever to have an expert price and market your house. A house that is not priced for today's market can sit on the market for months, without even a nibble. It is particularly hard for sellers, even those using a realtor, to recognize that they will not get the same price for their house that their neighbor did in 2005. The chance that you will overprice your house, or even underprice your house to overcompensate for the downturn in the market is high. And have you ever marketed anything in your life before? Do you really want your first foray into marketing to be the sale of a half-million dollar asset? I don't even think I could price my old Honda accurately for resale - but if I underprice it the most I probably would lose is a couple hundred bucks.

Today's real estate agents generally do more than list your house for sale. They can provide crucial advice in getting it ready to sell for top dollar. They can offer design and "staging" advice ("staging" is essentially using yours or rented furnishings to showcase your home, and helps show potential buyers how to use the space, particularly if you have an awkward or unconventional feature in a room).

Agents can also provide free advice for inexpensive and small remodeling jobs that can help add significant value to your property - and may have access to contractors who can do these jobs on short notice.

Additionally, they have the knowledge to guide you through a maze of paperwork - all of which can have legal ramifications if not done correctly like your state's disclosure laws. It is crucial to disclose known defects, to avoid - or win - any legal challenge from the buyers after the sale.

Lastly, I think the skill involved with negotiating a sale should not be underestimated. Who would you trust to represent you in any type of negotiation: someone who has had years of experience with countless transactions, with all the knowledge that brings or a rookie doing it with no training, skill, supervision or knowledge?

If you insist on selling your house yourself, be prepared to spend about ten hours a week on the sale of your property, and just assume that it each of those ten hours will be at the maximally inconvenient time. It is much more than just having an open house on a Sunday. Be ready to take calls at 10 p.m., show the house at 7 a.m., or at noon - or to take the afternoon off from work to meet a buyer, who may not even show up.

The buyer will most likely have an agent - and that person will get a commission (assume 3%). And, the buyer may well take into consideration that since you are not using an agent, s/he can offer you 3% less (the 3% that would be your agent's commission), thereby wiping out any profit from not using the real estate agent.

If you still want to tackle this Help-U-Sell has broken down many of the steps of the home selling process, and you can buy just the services you want (like listing your home in the Multiple Listing Service, about $250 - $400). Hiring your own lawyer can be another $500 and your own stager -$300 - for advice only.

Before you decide to go it alone, why not interview three successful real estate agents who know your neighborhood well? That won't cost you a thing, and you will at least be more knowledgeable as a result. And maybe one of them will change your mind. Best of luck,

Jessica White, also known as "Ms. Mortgage Maven," is a mortgage consultant with Tenacity Mortgage. Call or email her to discuss your home purchase or refinancing needs. She can be reached at 202-607-4449 or Jessica@msmortgagemaven.com. You can also apply online at www.msmortgagemaven.com.