The Dangers of Self Representation When Selling Your Home
By Keith Robert Gordon, Co-Founder
Our services include, Flat Fee MLS listings, low commission full service real estate (our StreetSmart PRO programs where we professional represent the seller), and Short Sale services. Our services are available in every Florida city.
86% of all homes that are sold in Florida are sold by Realtors®. If a Realtor® sells your home, you may be at a significant disadvantage by representing yourself without professional guidance. If you sell "by owner" with no Realtor® involved the pendulum of equality is in my opinion more balanced.
Buyers' agents represent their buyer and will not look out for your best interests. Realtors® can be extremely aggressive, can be skilled in contract negotiations, can show you biased comparable market analysis, can pressure you into agreeing to an offer too quickly, can have you agree to unfavorable terms by the mere fact that buyer's agents often add "additional terms" to the contract that are not traditional and have not been approved by the Florida Supreme Court or possibly lose you valuable marketing time by taking your property off market "contract pending" because you have engage an un-qualified buyer. All of which may cost you thousands of dollars.
We encourage you to look at our StreetSmart PRO Plan and allow us to professionally represent you. You don't give up your right to sell your home yourself with our StreetSmart PRO Program. If you sell your home with no Realtor® involved, the total commission due will be just 1.5% (our fee to handle both sides of transaction). The benefits far out way the costs! If you don't close, you pay no closing fee. All of our plans are "cancel anytime" with no fee.
Once you have read about our encounters with Realtors®, you may feel that representing yourself in contract negotiations may not result in your best deal or the most desirable terms.
Contracts are complex and there are many variables. There are "as-is" contracts, "FAR", "FAR/BAR", addendums, closings costs, surveys, inspection reports and most concerning of all is the added language that can alter the intent of the contract and further sway a contract in favor of their client. Dealing directly with a licensed buyer's agent without proper representation can results in an unfair deal.
Case #1 and #2 below are two recent contracts that were executed by sellers where the buyer was represented by a licensed Realtor®. These sellers used our flat fee MLS plans.
This is not intended to discredit the effectiveness of our flat fee MLS plans because we sell 100's of homes throughout Florida using this exact plan nor would I cast doubt on your ability to represent yourself in contract negotiations because I don't know your knowledge or experience about these matters but rather to illustrate that just because a house is sold "by-owner" does not mean the seller obtained the best possible price and terms.
A comment that was recently made by one of these buyer's agents prompted us to write this article. She said "dealing with that seller was like taking candy from a baby." I personally don't like that expression but the point was well understood.
Case #1: Keep in mind this seller chose ADDvantage® carefully, called three or four times before listing with our company, filled out the "Seller's Real Property Disclosure Statement" the day he listed and was meticulous about the details of his listing. In essence, he was careful about everything but the deal itself!
He called late one evening around 7:00 pm and asked, after being listed with us just a few days, if he had the right to enter into a contract without my approval. I said, "of course you do!"
He went on to say that it was important to know immediately because the buyer's agent said the deal had to be done that evening! That, in itself, is a high pressure sales tactic and not professional! After the deal was inked, the seller sent a copy of the executed sales contract. We do ask all "self-represented" sellers to do so as it keeps ADDvantage® in the loop for MLS "contract pending" reporting concerns. After reviewing the contract just to see what they did (because the "had to get it done tonight rush" concerned me), even though I didn't represent them, I noticed the seller was paying for the property survey, which is traditionally a cost paid by the buyer ($400), and the buyer's agent added language to the contract (this is why professional representation is needed because often dangerous add-on language is added to contracts which goes beyond what has been approved by the Florida Supreme Court) that no inspections would be done until an appraisal was successfully completed for an amount equal to or greater than the sales price. She (the buyer's agent/ Realtor®) said this was what they are doing in her area. And, the seller was paying closing costs and paying 3% commissions for this add on.
This contract, at face-value, seems quite un-balanced. I believe the seller was rushed without truly understanding what was happening. I believe they were excited about selling and possibly weren't savvy enough to catch these contract issues. The cost of an upgrade to our StreetSmart PRO Plan would have been a good investment.
Case #2: This was the "taking candy from a baby" Realtor®. Her comment was, "in all my years as Broker I never made such as easy deal." Her comment was upsetting because we don't want our "self-represented sellers" to be taken advantage of, even if it's one of our main products that we offer. What she was saying was the seller gave her every concession. This means the seller did not get their best deal, either!
Case #3: In this example, we were representing the seller. This seller was a Realtor® in another state. The buyer is an active licensed Realtor® in Florida which makes this situation particularly interesting! After an initial written offer, the offer was verbally negotiated and a final version was sent to me. I didn't trust the pre-approval letter (I never do) and called the lender. The loan officer confirmed that the buyer had not fully complied with all the terms of the pre-approval letter that I had in front of me. In other words, the pre-approval letter was worthless and really should never have been printed on its worthless paper! Once I brought this to the buyer/Realtor® attention, she said, "Oh, I am going with a different lender and will provide a new letter." To date, I have not received that new pre-approval letter. While I have not heard back from the buyer/Realtor®, I will recommend to my seller that we condition of acceptance of the deal with the language "buyer agrees to provide seller with a 'buyer-ready' letter with 3 days of effective date." This will ensure we have a qualified buyer.
As well, my seller client (past Realtor®) had issues with the "as-is" contract. She thought an "as-is" meant if the buyer fails to close they would forfeit their deposit which is not the case. I further explained that kind of contract would be an "as-is-where-is" contract. Furthermore, she said having a "zero repair limit would allow the buyer to escape rather easily." I said, "The buyer can escape even if the repair limit was $2000 under the right conditions or if financing falls through at the last moment."
In closing, you don't give up control having us represent you. You will gain professional representation. The cost of the StreetSmart PRO Program is low and the benefits that you will receive are significant.
You will receive:
- 100% contract-to-close representation by me
- Inspection report review, consultation, and addendum, if needed
- Title recommendation and closing
- ALTA Settlement Statement review
- I have 33 years of construction related experience
- I have over 35 years experience as a Florida Broker
- Exclusive Right of Sale Listing in the MLS (not limited service as you have now)
- We take all calls and schedule all showings
- You will receive a call to confirm each showing
- You still have the right to sell yourself and pay no commission
A recent testimonial from a StreetSmart PRO® client in St. Cloud, FL: "Keith sold our house in St. Cloud, Florida Osceola County last week. We had our house on the market for 3 years. We had tried to sell it ourselves and had also had listings with other Realtors®. We listed it with Keith Gordon and we had a contract and a closing within 60 days. St. Cloud, which is in Osceola County is one of the hardest hit in foreclosures in the state, needless to say there was quite a bit of competition. Keith is the first Realtor® I have ever dealt with that I was sorry to have to say goodbye to. He was extremely professional and given the opportunity went the extra mile every time. Keith was out of our area, however it was never a concern because communication is his strongest of many attributes. For the first time we felt that our Realtor® was really working for us and not just to close the deal at any cost. He is awesome and we would highly recommend him and his staff. We would love to have him represent us again." Kerry and Kathy Broaddus St. Cloud, FL