When homeowners sell their house For Sale By Owner, they can leave money on the table because they often misjudge the value of their home, don’t get many offers, and accept a buyer who is less likely to close. Real Estate Broker Elena Falco of Realty Executives Legacy says you get the best result when you turn to an experienced real estate agent.
Diane Moca: Have you ever heard the term FSBO? Well, that means for sale by owner. Most people have probably heard of that. It means somebody selling their house on their own without the help of a real estate broker. And some people do that because they think, "Oh, I'll be able to save money or keep more of what I get." But that's not necessarily true. I'm joined today by Elena Falco. She is a real estate broker with Realty Executives Legacy. You've encountered people who wanted to sell FSBO and then changed their mind. Why did that happen? Elena Falco: Selling your home is you're selling your biggest investment of your life. And it's not as easy as what people think it really is. There's a lot of factors that go into play when it comes to selling your house, including how much is the house worth. And a lot of for sale by owners have sometimes underpriced their house thinking that it's worth way less, or they overprice it. In today's market, people are talking about, "Well, why would I list with a broker when the market's so hot?" Well, when you list with a broker, you're putting your house out there and it's over 900 websites. The MLS generates so much more activity on a property than if it's for sale by owner. So that being said, instead of getting one or two offers for a sale by owner, you might end up getting 12, 15, I've even seen 45 to 50 offers on one property because it's been listed with a real estate broker. And then going through those contracts is also a very, very difficult process. So having a broker that knows contracts and knows how contracts are written, and can see which contracts are better contracts than other contracts, and figuring out where is your best buyer in that pile of offers that broker's going to get you. Diane Moca: So somebody who maybe doesn't know the process as well as you, someone who's been doing this for decades, right? Elena Falco: This will be my 20th year. Diane Moca: Wow. Congratulations. Elena Falco: Thank you. Diane Moca: But somebody may think, well, why wouldn't you go with the highest priced offer, right? Elena Falco: The highest priced offer isn't always the best offer. Diane Moca: Why? Elena Falco: Well, what if that person has a house to sell? Diane Moca: Oh, and what if they do have a house to sell and it doesn't sell? So then what happens? Elena Falco: And it doesn't sell. Then you have no offers. Then all your other offers are gone. And then now you're stuck and you're back at square one. Diane Moca: And sometimes a buyer will say, "Oh, I'm pre-approved for a mortgage." But somebody else will say, "Oh, I'm pre-qualified for a mortgage." Elena Falco: And there's a big difference. If you have full approval on your loan, that you've already done all the leg work, it's going to be more of a sure thing. Just getting that basic pre-qualification letter, you need more than that in today's market. Diane Moca: So a seller can benefit from having someone like you to sort through all of that. Elena Falco: Sort through all of that and really see and check people's finances. Because people say that they're richer than they really are, or they say they have credit better than what they really do have. But before you accept a contract on a house, being able to go through and do the screening of all those contracts and all the backgrounds of the people that are offering on your house. Selling your home is very emotional, especially if you've been there for a long time. And if you're going in for brain surgery, you hire a brain surgeon to do your surgery. If you're going to sell your house, you hire a real estate broker to help you through the process, because it's not easy and you're going to need help. So you need somebody that knows how to stage a home, somebody who can assist with fixing things. And people don't realize that those little things go a very, very long way. Even just a fresh coat of paint will make the whole difference in a house. And then also depersonalizing the house. Even though you might love that magenta that you painted your dining room and it's your favorite color, buyers don't like your magenta. Going through the house, getting rid of personal items, pictures, things like that. And it can be extremely emotional, especially if you've been in the house for a long time. And a good broker will help you through that process. And you almost become a psychiatrist helping somebody, because it's not easy. Because most people move during major changes in their life. And so either you're buying your first home or you're downsizing after you've raised your kids and you don't need all that space anymore. Or you get tired of the Illinois Winners and you say, "I'm moving to Florida." They're major changes and stressors. Diane Moca: Or there could be a divorce or death in the family, something emotional. So you've had to deal with those kinds of things. And so you don't just see it as this is just a house that I'm listing. Elena Falco: Oh no. Diane Moca: It's much more to you. Elena Falco: Oh yeah, no. It's like doctor real estate. And sometimes when people get, especially divorce and death, those are the hardest ones I have to work with. And just helping people get through that process. Diane Moca: How stuck is somebody if they sign a contract to list? Elena Falco: Well, that depends on the broker you hire, number one. So every brokerage is different. So I mean, I'm a broker owner. So I have a lot of flexibility in my listing commissions and rates and things like that and the longevity of a listing. Diane Moca: So do you think a lot of FSBO owners recognize all of those nuances that go into the work that a listing agent does? Elena Falco: No, they don't. And that's why a lot of for sale by owners end up listing their properties. Diane Moca: Oh, they try it that way first and then they realize they're not getting what they think. I do think that some people are nervous about having to pay upfront costs. They worry that maybe a listing agent might charge them for photos and marketing. And how does that work? Elena Falco: I mean, every broker's different what they charge. I personally don't charge anything for marketing or photos. I don't get paid- Diane Moca: Not upfront. Elena Falco: I don't get paid anything until that house closes and I hand over the keys to the new buyer. Diane Moca: And what is it about real estate you love? Elena Falco: My mother was a broker when I was a kid. My brother's a home builder. My other brother's a home remodeler. It's just kind of part of my blood. I started renovating and flipping houses when I was 23. I've closed thousands of transactions. But it's a lot of good people and I'm pretty blessed with what I've been able to do. Diane Moca: Well, thank you for joining us. And if you are someone who's considering selling your home and you've been thinking of doing a FSBO, for sale by owner, don't forget that it doesn't cost anything to contact an agent, like Elena Falco with Realty Executives Legacy. They can do a CMA, which is a comparative market analysis. That means that you will get a whole report that explains exactly how much your house is worth and why, showing different houses in the neighborhood and how much they sold for. So sometimes the best thing to do is just call and ask and find out what information you can get for free. For Talking Cities Aurora, I'm Diane Moca.
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