Real Estate Advisor: January
The Risky Side of Selling a Home on Your Own
The vast majority of sellers list their home with a real estate agent, but some individuals choose to go through the selling process on their own. Selling a home "For Sale By Owner", while entirely possible, does come with a list of hurdles and some significant risks.
Un-represented sellers are motivated to save the cost of the agent's commission. In many cases, however, selling without assistance can result in a lower closing price that negates such gains. In a survey of more than 7,800 buyers and sellers from around the country, the 2005 National Association of Realtors® Profile of Home Buyers and Sellers showed that the median price for homes sold directly by the owner was 16 percent lower than homes sold with the assistance of a real estate professional.
FSBO vs. Direct Sales
In 2005,
only 13 percent of home sellers conducted transactions without the
help of a real estate professional. However, of these transactions
39 percent were "closely held", meaning that the two parties knew
each other in advance and the home was not fully placed on the open
market.
Risks 
So
just what are the potential downfalls of selling your home by
yourself?
Setting the Wrong Price - In the world of real estate, setting a good asking price is absolutely critical. Owners frequently have a difficult time setting a realistic sales price, even if they have paid for an independent appraisal. Impartially evaluating your home and all its shortcomings (and selling points) is a lot to ask. An overpriced listing can linger on the market and necessitate later price drops. An under priced listing can either scare off wary buyers or can result in a closing price significantly below market value.
Under Exposure - Attracting serious buyers requires much more than a classified ad and a sign in the front yard. Many of the marketing avenues that agents utilize are costly or require resources that the average homeowner just doesn't possess. Between 75 and 80 percent of buyers use the Internet during their home search. Savvy agents come equipped with a strong Internet presence that draws online buyers to your listing.
Lack of Marketing Experience - Most of us are not practiced in the art of promotion, and don't possess a great deal of knowledge or perspective when it comes to marketing real estate. A skilled real estate professional knows the techniques to make your home competitive with comparable properties in the local marketplace.
Buyer Wariness - Some buyers will avoid a FSBO listing for fear either there is "something wrong" with the property or that the asking price will not be based on current market trends.
Buyer Haggling - A FSBO listing can attract buyers out to find a "deal". These individuals are more likely to see the listing price of a FSBO property as merely a starting point.
Failure to Disclose - Failing to disclose or fully disclose any defects in your home is huge liability for any seller. Improper disclosure or nondisclosure usually results in lawsuits, an unpleasant prospect for all parties. Licensed real estate agents are required to stay up to date on all mandatory local, state and national disclosure requirements.
Commission to Buyer's Agents - Nine out of ten homebuyers use a real estate agent in the search process. If a potential buyer is using the services of an agent, their commission will generally be taken out of the selling price.
Lack of Negotiating Experience - One of the most important services real estate agents provide is the negotiation a sale. Working without an intermediary makes it much more difficult to keep emotion out of the process. Sellers without representation can employ the help of a real estate attorney, but their primary function is to ensure that the contract is not marked by errors or omissions.
Preventing Water Damage in your Home
For homeowners, water can be a quiet villain. This seemingly
innocuous element can harm your house gradually over time or in
sudden disastrous events. A home that is water damaged can be a
health hazard to its occupants and is very often expensive to
repair.
Common Causes of Water and Moisture
Damage
Water damage can be grouped into two general
sources: 1) leaks of external water through the home's exterior and
2) moisture accumulation from internal sources. Below are some of
the most frequent causes of moisture damage:
Roof/Flashing Needs Repair - Worn or broken roofing material can expose your home to moisture intrusion and damage. Most leaks occur around joints and intersections of roof surfaces.
Gutter/Downspout Problems - Clogged gutters or downspouts can create water overflows that damage walls or the home's foundation.
Changes in Landscape - Alterations to the landscape's grade or newly installed sprinklers may alter the drainage of water towards the home's foundation.
Window/Door Seals Need Repair - Damaged, worn, or improperly installed seals and flashing can allow wind driven rain to enter your home.
Collecting Groundwater/Rainwater - Pools of un-drained water that form in the rainy season can damage foundation walls and lead to mold growth.
Plumbing Leaks - Plumbing fixtures can suffer from slow leaks or sudden bursts, and leaks inside walls may go undetected for an extended period of time.
Condensation - Condensation that forms on windows, un-insulated pipes and interior walls can cause significant damage.
Poorly Maintained Home Systems - Heating and cooling systems that are not regularly maintained are subject to leaks, mold and moisture problems. Unchecked sump pumps can lead to major water damage if failure occurs.
Prevention: Room by Room
No home
will ever be immune to water damage, but a regular assessment of
common risk areas can greatly reduce the chance of future water
damage.
Bathroom
- Plumbing - Check the walls for visible (or audible) leaks. Also check for moisture or discoloration in wall material. Look for any signs of water leaks below flooring and tiles.
- Exhaust fan - Make sure the exhaust fan is functioning properly and that the fan itself is clean and dry.
- Toilet - Look for water line leaks as well as any softness in the floor surrounding the toilet.
- Shower/bathtub - Replace loose or missing caulking, and address any cracked tiling. If water does not fully drain from the tub after use, a professional may be needed.
- General Tips - Run bathroom exhaust fans during every shower to prevent moisture build up. Treat bathroom drains monthly to avoid potential clogs. Check the ceilings of any room under bathrooms, kitchens and laundry rooms for signs of moisture or mold.
Kitchen
- Sink - Repair cracked backsplashes, sink seals and countertop tile immediately.
- Dishwasher - If the dishwasher backs up or fails to empty completely, check the drain line for clogs. Trickling water under the dishwasher signals a loose connection or leaking water hose.
- Refrigerator - Check behind the refrigerator for signs of moisture. Leaks or kinks in the icemaker supply line can create large problems. Check for moisture or mold underneath the refrigerator, and if your model has a drain pan it should be cleaned periodically.
- Stove/Range - Remove the bottom drawer periodically to check for water damage underneath the range. Clean or replace the range exhaust filter and fan to ensure free airflow.
- General tips - Treat sinks with drain cleaner on a regular basis. Make a quick under-the-sink assessment a weekly routine (check for drips, moisture stains or musty smells).
Utility Room
- Water Heater - The tank should be clean and rust free, as should the area immediately around the tank and the bottom drain valve. Leaks in the inlet or outlet pipes should be repaired immediately regardless of size.
- Water Softener - The area around the tank should be clean and dry.
- Cooling Systems - Check and clean the cooling drainage pan periodically. All filters, supply lines, wall penetrations, vents, ductwork and drainage areas must be working to prevent moisture/mold problems.
- General Tips - Clean any utility room drains that do not flow freely.
Attic
- Roof Pass-Throughs - Inspect any chimney openings, skylight wells and any point at which something passes through the roof. Stained wood, musty smells or signs of daylight through the cracks are red flags that warrant the consultation of a qualified contractor.
- Attic Vents - Make sure all vents near the gables and eaves are clear and dry.
- Insulation - Thick and fluffy insulation is promising, while insulation that appears thin or flattened is a warning sign of moisture damage.
- HVAC systems - Ensure that duct joints are insulated and well sealed.
- Recessed lights - Inspecting for signs of moisture around recessed fixtures is a good way to identify water issues early.
- General Tips - Because many moisture problems are seasonal, it's wise to routinely check the attic in summer and winter.
Basement
- Basement areas - Look for stains or water trails on walls and on the floor. Un-insulated pipes are a source of condensation, which can lead to mold and rust. Check all vents and drains carefully.
- Crawlspaces - Damp crawlspaces invite mold growth. All crawlspaces should utilize a plastic ground cover.
- General Tips - Basements should remain cool, dry and clean. If you rely on a sump pump heavily, consider purchasing a back-up pump.
Laundry Room
- Washing machine connections - Check both ends of water lines for leaks of any size.
- Hard Water Problems - If the area has hard or mineral laden water, the in-line filer can become clogged.
- General Tips - Treat the drains of utility sinks regularly.
Outside Your Home
- Exterior Sidings and Wall Penetrations - Repair any cracked or worn siding, paint or shingles. Inspect the seals around vents and other penetrations.
- Windows and Doors - Check perimeter sealants and flashing for cracks or gaps. Make sure that all doors and windows fit tightly against their seals.
- Drainage - Make sure that the ground slopes away from the home's foundation walls. Gutter drains should slope away from the house as well.
Roof
- General Tips - Safely inspecting roofs can be difficult for the average homeowner. Whenever possible inspect the roof for missing or broken shingles from vantage points on the ground. When in doubt, consult a trained roofing professional.
If
Major Water Damage Occurs
Even well prepared homeowners
can be hit with the headaches of a major water event. Burst pipes,
overflowed toilets or natural disasters can occur with little, if
any, warning. Should a major water damage event affect your home,
taking action quickly and safely is essential.
Timely action can reduce the amount of damage to personal items and lower the chances that any structural damage will occur. Responding swiftly will also reduce the amount of mold, rust and rot that occurs in the home.
The number one priority in such instances is to protect your loved ones. In the case of natural disaster, heed the precautions of local emergency management officials. Make sure any water-damaged areas are structurally safe and disconnect all electronics and electrical devices in the room. If necessary, stop the flow of water by turning off the main water supply to the house.
If an extensive water level is present, contact a plumber or water extraction service (don't forget to ask for an itemized estimate). Remove standing water by using a pump or wet-dry vacuum. Begin ventilating the area as soon as possible with the use of fans or dehumidifiers. Water-damaged materials should be removed from the home for health reasons. Carpets damaged by clean water may be salvageable, but carpets damaged with dirty water will likely need to be replaced.
Resources
The information in
this guide is based in part on the U.S. Department of Housing and
Urban Development publication titled Moisture-Resistant Homes. To
read the full guide, visit http://www.huduser.org/publications/destech/moisturehomes.html.
Other resources:
EPA "A Brief Guide to Mold, Moisture and Your
Home" http://www.epa.gov/iaq
HUD Healthy Homes
Consumer Information http://www.hud.gov/offices/lead/hhi/consumer.cfm
FEMA "Repairing Your Flooded Home" http://www.fema.gov/hazards/floods/lib234.shtm
