Laptop and bookcase

15 Must-Do’s Before Downsizing

Between the tiny-house craze and bestselling books about minimizing your life, we’ve probably all thought about downsizing at one point or another. But is it really the right move for you at this moment in time? Before you decide to move forward with downsizing, it’s smart to spend some time thinking about the possible repercussions and what it’s going to mean for your life so that you can do it the right way — without regrets.

If you think that downsizing might be in your future, then follow these must-do steps so that you can get it done intelligently and relatively stress-free. You’ll be glad you didn’t leap into something you weren’t sure would work for you, and you’ll be able to assess whether this is a step you should take right away or put off for a few months or years.

Understand why you want to downsize

If you don’t have a set reason to scale back your house and your lifestyle, then this might not be the best time to try it. For most people, downsizing entails a lot of work and major decisions, and remembering why you’re going through the process can help you keep on track with the ultimate goal.

Are you hoping to move closer to family members, like kids or grandkids or siblings? Do you want to downsize so that you can travel more efficiently (or maybe even live in a camper van)? Does it make financial sense, or are you simply tired of having so much house to keep clean? Are you hoping to trade in a house in the suburbs for a cute condo downtown?

Whatever the case, talk to your other household members (if any are involved) and figure out what your “why” is for downsizing. It’ll give you a true north to follow when things start to feel tough down the road.

Assess your current possessions

Some downsizers find it helpful to take a literal inventory of their belongings and decide how much they’re willing to remove from their current inventory. How many bookshelves (and books) do you have in your house? Desks? Beds? End tables? Dressers? What’s in your drawers — especially in your kitchen — and can you do without any or most of those items? What does your clothing situation look like? For that matter, how many towels and sheet sets do you have, and how many do you really need?

Consider where you want to move

Maybe you already have your eye on the place where you want to move — this might have been hashed out already when you were considering why you want to downsize. But if not, it’s a good practice to think about where you’ll go and to be as precise as possible. If the units in that development downtown where you’d absolutely love to live contain a certain number of bedrooms, bathrooms, and square feet, then that gives you a parameter to aim for. And if you’re hoping to pack everything up and travel the world in a fancy RV, then that gives you a different goal. Getting your head around where you want to be, specifically, is going to help you make some tough decisions later.

Think about what you’ll miss if it were gone

There’s no shame in admitting that some of the possessions you’ve accrued over a lifetime just aren’t that exciting or necessary to you. Maybe you really wanted that sewing machine and got a few good years (and clothes) out of it, but if it’s been collecting dust for half a decade or longer, then perhaps you’re better off taking any needed hemming or adjustments to a tailor and focusing on other things. On the other hand, if you still use and love the sewing machine, then maybe you need to make sure it comes with you on your downsizing journey.

As you work on taking an inventory of what you have, think about whether (and how much) you’d miss it if you were to give it away or sell it. This will help you identify the things you can let go of without much strife, and what you really need to think hard about rehoming before you take the plunge and do it.

Understand your guest situation, short-term and long-term

Some of us love hosting guests in our house, while some of us find it a minor imposition at best. Do you have adult children who are likely to want (or need) to come stay with you while they get their lives in order, either after college or during a major life change like a divorce? Do you have siblings who like to visit where you live and who are used to bunking in your house when they do? Are those circumstances you’ll happily accommodate because they bring you joy, or is part of the reason you’re thinking of downsizing because you want some space of your own — no guests allowed?

“I just don’t have the room to host you anymore” might be something that you don’t want to have to say, or it might sound like a dream come true to you. Depending on your own family circumstances and your future hopes and dreams, you’ll want to consider how you plan on dealing with any short-term and long-term guests in the future.

Assess your finances

Many people decide they want to downsize for financial reasons; smaller homes are cheaper to heat and light, and you will likely use less water if you’re moving from a home with a lawn to a condo that contracts out landscaping. But there might be other costs of living that you need to consider. Let’s say you’re hoping to move to one of the coasts to be closer to children or grandchildren — not only does housing cost more on both coasts than it tends to in the middle of the country, but you’ll likely also be spending more on groceries, gas, and even utilities. Similarly, if you want to trade it all in for a van life, you’ll have to consider whether you can afford the price of gas rising in the near or distant future, and if it does, what that will mean for the longevity of your new lifestyle. Talk to your accountant or another financial professional to get a sense of what you might need to spend to have the sort of lifestyle you want, and make sure that your finances can accommodate it.

Consider the cost of replacing what you’ve already got

Even if all of your furniture is perfectly serviceable, are you really going to need a dining set that seats twelve and has room for all your ancestors’ china in a condo? Probably not. Even if you sell that dining set, you’ll likely want to replace it with a smaller table and chairs that fit four to six people, and whatever money you net in selling your current possessions might not quite cover the new things you may want to purchase before you settle into your downsized home.

Think well beyond furniture when you’re considering replacements. Will you really need a toaster that toasts four slices of bread at once in a smaller kitchen? Can you replace your desktop computer with a laptop computer? Or all of the cutlery, plates, mugs, and bowls that you’ve accumulated over time with smaller sets? Will your dog’s bed fit, or your houseplants? Will you need to keep all of the holiday decorations? Do you need that full set of large pots and pans, or should you invest in a smaller one? There may be quite a few things that you want to shed and replace, so go back over your inventory of possessions and decide whether anything should be replaced, and then try to ballpark how much that will cost you.

Decide whether a home sale could cover your new living expenses

Depending on when you bought your current house, home prices have likely gone up, and you may have spent some of your time fantasizing about what you might be able to buy if you sell now. But that rise in home prices works both ways: Anyplace you might be considering downsizing into has probably also gone up in price, and mortgage rates might be higher today than your current rate, so you’ll need to think about how much you’ll really be netting, whether it makes more sense to rent than buy, and what you’ll use for a down payment if you decide not to sell your current home and rent it out instead.

Be honest about storage

A lot of people who downsize tell themselves that they can just put whatever they don’t take with them into storage. Technically, this is true, but that’s an additional monthly expense you’ll have to take into consideration when you’re working on your budget. And not to be morbid, but consider the people who might have to clean out that storage unit if you were to pass away unexpectedly. Do you really want to compound their sadness by stashing everything you don’t move with you in storage?

If a small storage unit for storing seasonal items that you can rotate out makes sense, then go right ahead and reserve one. But if you already know that you’re going to put your stuff in storage and then mostly forget about it, do everybody a favor and just release it now.

Get ruthless about new purchases

A lot of us go shopping when we’re stressed out — it’s a very normal way to handle big life changes. But before you start going nuts at the mall or on, set up a series of warnings or flags so that you don’t buy anything without thinking about it for at least 48 hours in advance. (Yes, this even goes for items on sale — if you really need it or want it, you can wait until it’s on sale again. Sales happen all the time!)

Don’t make your downsizing job any harder than it has to be by bringing in new items consistently. Crack down on your own shopping habits (and the shopping habits of other people in your household) so that you can downsize as quickly and easily as possible. You can always get what you need after you’ve moved!

Talk to your relatives and friends about what they might want

If there are any family heirlooms or personal treasures that you’re hoping to pass along to the next generation, now is the time to have a potentially tough conversation when you ask them if they really want the item (or items) and whether you can go ahead and hand it over. Sometimes people who are downsizing don’t realize that their children or grandchildren are also trying to live minimally and have no intention of collecting things, no matter who owned it in the past, and this might be a difficult pill to swallow.

There may very well be some items or keepsakes that you think really should stay in the family, but if nobody claims them, it’s time to start thinking about what you’ll do with them now instead of getting upset that no one seems to care as much about your grandmother as you do. Perhaps a close family friend would like them, or maybe it’s time to let another family enjoy them by adding them to an estate sale. But definitely don’t make any assumptions about what your own relatives will want — then you won’t be unpleasantly surprised.

Follow the one-year rule

One well-worn rule for getting rid of extra possessions is: If you haven’t used it in a year, then you should get rid of it. This applies to everything except (perhaps) family heirlooms and possessions, but it’s definitely a good rule of thumb for things like clothes and books, kitchen appliances, dishes, blankets and pillows, or anything else that you don’t have strong feelings about but need to determine if it’s coming with you or not. If you haven’t already started purging some of your things in preparation for the downsize, then using the one-year rule can help you get started with items that aren’t necessarily personal or important to you.

Go digital

Family photo albums are fun to flip through, and it might make sense to keep one or two, but if you have stacks and stacks of them, then it’s time to seriously consider digitizing your collection. The same goes for books: Almost everything you can buy in paperback or hardcover, you can buy digitally, and even though you might insist that the feel of a paper book in your hands is too much to give up, you’ll save quite a bit of room. Movies, CDs, and other forms of media can also be digitized and still enjoyed just as much.

All that said, before you go too crazy moving all of your media to digital files, make sure you have a reliable backup system in case your computer crashes. An external hard drive, cloud drive, or another form of backup can save you a lot of heartache in the event of a total computer failure.

Take it room by room

Downsizing is definitely overwhelming, and the good news is that you usually don’t have to do it all at once. If you work room by room and item by item, you’ll have better success than if you try to tackle, say, all of your clothes (which are scattered all over your house) at once, or all your sports equipment at once. Start with a guest room or garage where you’re already storing things you don’t use very often, then work your way into the living room, bedrooms, and kitchen, where it’s likely going to be harder and harder to make tough decisions about what stays and what goes. If you begin with the less personal areas, by the time you move into the real heart of your house, you’ll be in the downsizing zone, and you’ll be better able to decide what stays and what goes.

Keep your goal front and center

The process of downsizing is a lot to take in, and if you don’t keep reminding yourself why you want to do it, then it can be very tempting to simply give up and decide you’re staying put instead. Make sure you’re remembering your end goal. Maybe it’s living in a smaller home so that you can travel the world like you always wanted to. Or maybe you’re giving up a big house in the suburbs to be closer to the city center and nice restaurants that you never get to enjoy. Whatever your “why” is, remember it and hold it close so that you don’t get discouraged by the process itself. In the end, your streamlined lifestyle will be worth it.

clipboard and coffee

Informed Buyer: 13 Market Considerations to Assess Before Buying

When you’re thinking about buying a house, it’s normal to question whether it’s really the best time to jump into the market — or whether you should wait a few months or even years to get the best deal. But a house isn’t like any other investment; you can’t live inside a stock or bond, or make memories there, so it’s not always wise (even though it’s very natural) to compare buying a house to other possible investments you might make in your future.

So to determine whether it’s really the right time for you to buy, it’s important to assess both your own ability to buy and the overall market. If you’ve never done that before, don’t worry — it’s not as daunting as it sounds. Here are some of the personal and market considerations you should think about before you start shopping for a home of your own.

Your own financial profile

The biggest factor in whether or not it’s a good time to buy is individual to every person or household. What kind of shape are your finances currently in, and will buying a house stretch you thin or save you money every month? This isn’t always an easy question to answer, but take a look at your monthly income and expenses, including what you’re already spending on rent, and then think about the kind of home you’d want to buy and how much money you have saved up (if any) to use for a down payment.

Many online home portals have mortgage calculators on them, but be careful with those; they often make assumptions that might not be true in your case (such as the size of your down payment, for example). And you’ll have to pay for more than just your mortgage loan: Most mortgage payments also include homeowners’ insurance and taxes, which are pooled in an escrow account and then distributed to your insurance company and city or county on your behalf. So even though your mortgage loan amount and interest rate might be stable over time, depending on the market, it’s possible that your insurance or tax rate could increase and you’ll, therefore, spend a little more on your mortgage payment over the 15 or 30 years you’re paying it.

The current mortgage interest rate

Mortgage interest rates were at all-time lows for more than a decade, and they’re still relatively low compared to the double-digit rates that many buyers saw in the 1980s, but they are creeping up nonetheless. The mortgage interest rate definitely affects buyers because the higher it moves, the bigger the monthly mortgage payment will be on a house, even if the house itself hasn’t increased at an all-in price. So for most buyers, higher mortgage interest rates mean they can’t afford to spend as much on the house itself.

That said, if mortgage rates fall in the future, you can always refinance your mortgage loan at a lower rate, so it doesn’t always make sense to wait to buy a house until rates are once again at all-time lows. Nobody knows when that will be, and in the meantime, all of the money you spend on rent is going to pay your landlord’s mortgage (or straight into their bank accounts), so a higher mortgage rate does not necessarily mean that you shouldn’t buy a house today. It just means you might want to keep tabs on any refinance options that offer you a better rate — and that if you can improve your credit score at all, you should do it; a better credit score usually means that buyers can get the best possible rate from a mortgage lender.

The available inventory

“Inventory” is really just a fancy real-estate-related way to say “how many homes are currently on the market.” More homes on the market tend to be better for buyers, while fewer homes on the market tend to be better for sellers — the usual economic rules of supply and demand also apply in real estate, of course. If there aren’t very many homes on the market, buyers also need to be aware that it might take them a while to find a house that fits their needs and falls in their price range … and when they find it, the competition from other buyers for the same house could be anywhere from mild to fierce.

But once again, low inventory doesn’t necessarily mean that an aspiring buyer should wait until the market levels off. If your finances are in order and mortgage interest rates are where you want them, then it’s smart to start looking even if inventory is low — it simply means that you’re going to have to be ready to jump on any opportunities that look promising and possibly cancel your plans for the evening or weekend so you can go look at houses instead of going golfing or see the latest big blockbuster in theaters.

The average days on market

Another way to gauge how “hot” (or not) the real estate market is in your area is through days on market. The time it takes to close on a house can stretch to three or four weeks, between all the inspections, appraisals, title due diligence, and other tasks that have to be completed to get from offer to close, so if the average days on market in your area is one month or less, that means the market is extremely competitive, and you’ll have to move fast to get a seller’s attention.

But even in markets with very low average days on market, you can use that information as a buyer to your advantage. If the average days on market in your area is closer to 30 and you’re looking at a house that’s been on the market for 20 or 30 days already, then it’s likely that the seller is getting anxious and might be willing to accept some concessions or even consider a lower-than-asking-price offer. Whatever the case, knowing the average days on market in your area can help you determine whether now is a good time to buy, or whether it might be better to wait.

The school and crime ratings

You might not be personally concerned about school ratings or crime statistics in the area where you want to buy, and that’s your prerogative — but don’t forget that you probably aren’t going to live in your new digs forever and ever. It’s never too early to start thinking about what it might be like to sell your house — yes, even before you put in an offer! — and even if good schools aren’t very important to you, they might be extremely important to a large pool of buyers when the time comes for you to turn around and list your home.

Similarly, crime statistics might not be on your radar, and that’s perfectly permissible, but it would be a mistake to buy a house in an area where you don’t know or understand what the crime statistics are or what they mean. Some crime statistics are compiled on a county level, and if you’re looking at houses in a sleepy county without much crime, then even one or two incidents can skew the statistics vastly. And if you’re ever planning on renting the house in the future, crime is something that you and your possible future tenants should think about — a vacant property can be an invitation for burglary or squatting, and if crime is high in the area but there are still a lot of potential tenants who want to live there, then you can help sell them on your house by pointing out the state-of-the-art alarm system or any other safety features you’ve installed.

Evaluate the tax rates

As a property owner, you’ll have to pay property taxes on your home, and recent changes to the tax law mean that these taxes aren’t always entirely deductible because they’re part of the state and local taxes, not federal taxes. This isn’t necessarily an issue for most homes in most areas, but in locales like New York City or the San Francisco Bay Area, you could be paying quite a bit more in taxes than you anticipated, so it’s wise to look into it and assess how much you’ll pay.

In addition, property taxes are typically collected by your mortgage loan servicer along with your insurance, interest, and loan principal, so a higher tax rate might mean you’re spending more money every month on a mortgage payment than you anticipated. Whatever the case, you’ll want to know what you could be getting into tax-wise before making the leap from renter to buyer.

Don’t forget about utilities

If you already pay all of your utilities at your rental, then you might have a better handle on this than someone whose utilities are partially or completely packaged in with the rent — but don’t assume that the utility payments in your new digs are going to be equivalent to the place where you rented. For example, you might have a lawn at your new home, and you may need to water it, which is going to cost more money than the regular bath-shower-and-tapwater costs at your current place of residence. Depending on the size of your new purchase and whether you’re moving from an apartment to a single-family home, it might also take significantly more energy to heat and light up. And if you’ve been piggybacking on a neighbor’s wifi without permission, or you’re no longer going to be able to use your roommate’s Netflix password, those are both costs you’ll want to consider before you decide to buy your own place.

Some utility companies, like electric, water, and gas providers, can give you a ballpark range of what to expect to pay if you provide them with the square footage; some will even show you the past billing history of any address you’re considering buying if the seller agrees to give you access to that information. Pinpointing your internet needs is usually easier, but don’t forget that you might need more bandwidth for a bigger house with more devices.

Consider your commute

Another expense that might grow over time is the price of the gas you put in your car, which depends on all sorts of factors entirely beyond your control. So even though moving to a place on the outskirts of town or in the suburbs might be a better deal for your bottom line when it comes to housing, you could end up spending more money on gas than you anticipated, wiping out any savings you hoped to accrue. Before you decide on a house or even a neighborhood, think about how you’ll get to work. Maybe your new place is on a reliable public transportation line — great! Do you already have a bus pass that you can use, or will you have to buy one? Does your employer have any discounts or deals that you might be able to use?

Those who spend a lot of time traveling will also have to think about the cost of getting to and from the airport, whether you’re driving yourself or using a rideshare. And if there aren’t any grocery stores nearby the house you want to buy and you don’t have a car, that could be something to consider before you put an offer on the place.

Factor in upkeep and homeownership costs

One of the best things about renting is that if a pipe bursts or your electricity fizzles out suddenly, you can call your landlord and then wait for the repairs. (Well, that part isn’t so much fun — but you don’t have to pay for it yourself.) But if the water heater breaks or your roof starts leaking in a house that you own, guess what? You’re on the hook for fixing it, and that could wipe out your savings or mean you’re going to be putting a big, sudden expense on your credit card.

Do you have the ability (or available credit) to handle one of those major expenses if it emerges? Some are obviously more urgent than others, of course; you might be able to live without hot water, even if you don’t want to, but a leaky roof could cause a whole host of other problems that you’ll also have to fix, so you can’t always put every home repair off until you feel comfortable paying it.

Think about your future employment prospects

You may be extremely happy in your job today, but in this day and age, it’s highly unusual for employees to stay at the same company for a decade or more. Of course, you can always sell your house whenever you’re ready to move on to a new employer — but if you’ve been living in the house for less than two years, then you’ll have to pay capital gains taxes on any sale, which could potentially wipe out any profit you might have otherwise made.

So even if you don’t see yourself moving on from your current job anytime soon, it’s a good idea to research the employment opportunities in the area before you commit to buying a house. That way your career will have room to stretch and grow while you continue to accrue equity in your house, and you can feel confident that you’ve got the options you need to be happy at work and at home.

Get details from the Chamber of Commerce

The local Chamber of Commerce can be a wealth of information about any community where you’re thinking about buying a home, and it’s definitely worth your time to do some research around local businesses in your area. Have there been a lot of businesses closing in the area — or opening? Does the chamber seem healthy in general? Does it host community events and offer opportunities for businesses to sponsor things like little league teams?

And what’s the mix of businesses in the area? Are there more restaurants than bars or vice versa? What kinds of retail stores are thriving? These little details can help you decide whether one neighborhood will be better suited to your lifestyle than another, and can also give you an idea of the area’s future growth opportunities.

Research future development

Some of the best real estate investments can be found in communities where development hasn’t arrived yet — or perhaps where it’s started but has yet to kick into full gear. To determine whether the area you’re considering is growing, you can look at both the Chamber of Commerce or the local city and county permitting office. Ask if there have been any permit applications for new shopping centers or condo or apartment developments, and if you can, get a sense of the timeline for those additions. You might also discover that a new rec center or swimming pool is currently in the works and be able to get your foot in the door in an up-and-coming area before it really starts to boom.

Uncover any environmental issues

Thankfully, these tend to be rare in this day and age, but you definitely don’t want to buy a house that’s adjacent to a nuclear power plant or subject to landslides without knowing about it first, so you can negotiate the price. Whether it’s a natural disaster like a wildfire, hurricane, earthquake, or flood (FEMA has some good data around where these have been most prevalent in the past), or whether it’s a man-made issue like the water crisis in Flint, Michigan, or a waste spillage from a nearby plant, you definitely want to know what potential hazards exist near or around the house you might want to buy before you make an offer.

The decision to buy a house is a big one, and it should depend on many different factors. If you’ve done your research and you’re still not sure whether it makes sense to start shopping, talk to some trained professionals and ask their advice. A good accountant and trustworthy real estate agent can give you a solid understanding of what a home purchase might mean for you, and can also help you navigate any pitfalls.

Home Kitchen

Informed Seller: 11 Market Considerations To Assess Before Selling

“Is this a good time to sell my house?” That’s one question that real estate agents are used to fielding, but as a homeowner, the answer might not be quite so obvious. Whether or not you should sell your house now or wait a few months (or years) depends on a number of factors, including the current market where you live, but there’s a lot that you can do to help educate yourself about the best time to sell a house and when to make a move.

When you’re thinking about selling, it’s smart to take a close look at the market first and make sure you’re as informed as you could possibly be. Here are some of the biggest market considerations to take into account before you think about listing your house.

Is the timing right?

It might seem counterintuitive to list your house when everyone else is also listing theirs, but consider the fact that buyers are definitely more active at different times of year in certain areas. Competition for buyers isn’t necessarily a bad thing when there are a lot more buyers available, so try to time your home sale according to the months of the year when buyers tend to become most active in looking for a home.

In some markets, there’s no such thing as a “down season” — but in many markets, sellers will want to think about timing their home sale to coincide with the months of the year when buyers are the most active. Typically, home sales tend to wind down in the fall and winter, then gear up again in the spring and summer. In neighborhoods with lots of appeal for families, this is especially true; most families don’t want to move their kids in the middle of a school year, and particularly if that move is going to mean that the little ones will have to change schools, which can be hard even at the beginning of a school year.

Study nearby listing prices …

One of the beautiful things about living in 2018 is that it’s really easy to see when houses in your neighborhood are for sale. Any homeowner who’s thinking about selling should do themselves a big favor and start keeping tabs on the homes that are listed for sale on their block and in their neighborhood — pay attention to both listing price (the initial price that the seller is hoping to get for their house) and to the sales price (the actual price that a buyer ends up paying for the home) because they aren’t always the same; the homeowners may have cut the price to get buyers interested, or in a hot market, the house might have been in the middle of a bidding war.

You can find listing prices using online portals such as Zillow, but your local real estate brokerage usually also has information around what’s sold in your area recently, which might be more accurate than what you see online, so it’s best to use a number of sources to determine what’s for sale in your area.

… Then be realistic about how your house measures up

This can be hard for any homeowner, but it’s absolutely critical if you want to get the best possible price for your house. It’s human nature to overestimate the value of our own possessions while underestimating the value of possessions that belong to others, and as of yet, there isn’t an equivalent of the Kelley Blue Book for homes, which are often unique and have attributes that can’t always be compared across the board.

If most of the homes in your neighborhood have a Viking range in the kitchen and yours is a Whirlpool, then you probably aren’t going to be able to command top dollar for your house, just to name one example. We all like to think that our house is nicer, better-decorated, or just a little bit fancier than our neighbors’ houses … but this is not the time to indulge in fantastic ideas about how much more valuable your home should be than the property that just sold down the road.

So spend some time seriously considering how every aspect of your house compares to the other homes for sale in your neighborhood, from the number of bedrooms and bathrooms to the lot size to the finishes and fixtures inside the home, right on down to the quality of your appliances. It’s OK if your house isn’t quite as nice as the other ones currently on the market — someone will still want to buy it! — but you’ll need to be realistic and price it competitively instead of trying to match or beat what your neighbors are asking for their home in terms of price.

Understand what makes your house unique and desirable

On the flip side, there might be some attributes of your house that bump it up considerably in desirability — and are relatively rare in the area, so you may be able to command a higher price than you thought. The details probably depend quite a bit on where you live and what’s common or uncommon there. For example, in a neighborhood on the plains where most of the homes are on flat lots, a slope to your yard that gives you a sweeping view of the area could interest the buyers in your market. By contrast, if you live in the mountains where most lots don’t have a lot of flat space for gardening or adding onto a house, then a flat lot with lots of usable space might be very desirable.

The things that make your house special might be basic, on the other hand — maybe most homes in your neighborhood are one-bedroom or two-bedroom properties, but you have three bedrooms in yours. Or perhaps you’ve got a large antique bathtub in your master bathroom, where most homes just have a shower. Whatever the case, do a little digging into what a “normal” house and lot look like in your area, and then do your best to research what makes your house more desirable than the competition; it’ll come in handy when you’re writing the listing description if you do decide to list.

Evaluate the job prospects nearby

When employment in an area is good, then buyers tend to have the ability to buy things. That sounds obvious, but it’s an important consideration when you’re evaluating the local market as a potential seller. If the biggest employer in town just closed its doors for good, this probably isn’t a great time to sell — but if there’s a new branch office of a major company that’s about to set up shop in your area, it could be the perfect time to think about listing your own house.

Finding employment (or unemployment) statistics for your area is pretty easy, thanks to the U.S. Census and Google. Look at the national unemployment rate and national household income first, so that you have an understanding of how your own market measures up, then simply type in “unemployment (my city/town)” and “median household income (my city/town)” to see where you fall in relation to the national numbers. If unemployment is high and household income is low where you live, you might want to think about waiting before you sell — but if unemployment is low and household income is high, then it could be a really good time to consider selling.

Know the crime and school stats

Buyers — even investors who plan to rent your house after the sale — are going to want to know that their investment is safe and that it’s in an attractive area for other buyers. Even if you don’t have kids, or your kids have long since graduated and left home, there are plenty of buyers with kids who might be an excellent prospect for buying your house, so don’t neglect your school research just because it doesn’t apply to you today; it’s quite possible that it could be a big selling point when the time comes to list.

Similarly, you might think you already know everything there is to know about crime in your neighborhood, but being able to point to numbers that show how safe it is can only work to your benefit when the time comes to sell. And even if it isn’t the safest block in the county, knowing why that is can help you answer questions from buyers who may have done the same research and might be nervous about what they’ve found. Maybe there’s only one bar in the county, and it’s right down the road — that could be skewing the crime statistics significantly, and if you can point that out to buyers, they might feel better about putting an offer on your house. (But you won’t necessarily know any of this unless you do some research!)

Look at average days on market

The average days on market simply refers to how long it takes homes to sell (on average) in your area. In hot markets, this might be one month or less — considering the fact that most homes need to be inspected and appraised, and a mortgage loan needs to get finalized, one month is considered very fast; the closing process in general can take three to four weeks. And in less-hot markets, you might see as many as 60 average days on market or more.

The days on market can help give you a handle on whether your market is firmly a seller’s market or whether it might be more of a buyer’s market. Fewer days on market means that buyers are jumping on anything they can find that might suit their needs, while more days on market usually indicates that buyers have more leisure to take their time and consider their decision before pulling the trigger by extending an offer.

Get a handle on how much inventory is available to buyers

Similar to days on market, the amount of available inventory can give you a sense of whether you’re currently in a buyer’s market or a seller’s market and how that might play out for your own home sale. You can usually find this through a Google search, though you might need to dig a little bit to get an actual number instead of a newspaper headline. Realtor associations or MLSs are good sources for finding inventory numbers for your area.

Inventory is measured in a handful of ways — sometimes you’ll see it expressed as a total number of homes for sale, but sometimes you’ll see it expressed in months, which can be confusing if you don’t understand what it means. (No shame in that!) A “balanced” housing market usually has about six months’ of inventory, which means that at the current rate of demand, it would take six months for all of the houses currently on the market to sell. Fewer than six months of inventory indicates a seller’s market, and more than six months indicates a buyer’s market.

Many data providers will also give you month-over-month or year-over-year percentage increases for inventory; this number simply describes how much more (or less) inventory there is this month or year than there was last month or year.

Understand your price per square foot

One standard way that homes are priced both for rent or for sale is by the price per square foot. This is a very useful number for buyers who want to know whether or not they’re getting a “good deal” on a house, or who want to compare home prices between two properties that aren’t exactly the same size. Price per square foot is another metric that you can Google to pinpoint for your area to see what’s average — but be aware that an average price per square foot is going to include both the bottom of the barrel and top of the line when it comes to houses, so if you’re not sure how your home compares, it might be better to look at the median price per square foot, which can be a better measurement for a truly “average” house.

A good real estate agent can help you determine a price-per-square-foot range for homes in your neighborhood or on your block, which is probably more useful than a market-level price-per-square-foot range.

Think about the mortgage interest rate

Mortgage interest rates usually matter more to buyers than sellers, but it’s smart to think about where they are and whether they might go up (or down) in the near future. As mortgage rates rise, the amount that buyers are able to spend on a home goes down because they will be paying mortgage interest every month along with insurance and taxes, not to mention paying back the actual loan amount that they borrowed, the principal.

Of course, it’s impossible to predict the future, but if you hear several economists saying that mortgage interest rates are likely to go up next year, then it might make sense to list your house this year — when more buyers will be able to afford it. Conversely, if most experts agree that mortgage interest rates are going to dip again, then it could be a smart move to wait until those rates drop before you list your house.

Evaluate the cost of selling

If you’ve ever sold a house before, then you already know it’s not free. You’ll need to make any minor repairs that you’ve been putting off, and it’s possible that you might have some major repairs to deal with once the inspector takes a look and gives you (and the buyer) the report. You may need to pay for paint for the interior, landscaping to boost curb appeal, professional cleaning for your floors or rooms that need it, storage for the items you’ll want to stash to help your house look its best, and depending on the deal you strike with the buyer, you may also have to fork over some money for closing costs.

Plus, if you use an agent, you’ll have to take the agent’s commission into account; you will likely net more money than you would have without an agent, but it’s still a cost that sellers need to consider. After all, going with an agent can save you a lot of money in professional photos, home listing costs, and many other hidden expenses that agents typically cover for their listing clients.

Will selling your house be worth it? Depending on the market, the answer could vary — so make sure you do your research before you make any decisions. Talking it over with a professional is always a good idea; real estate agents can also pull a comparative market analysis (CMA) for you to help you determine what kind of listing price is realistic, and give you a good idea of how long it might take to sell.

Ariel view of neighborhood

Relocating: 19 Things To Research Before You Buy

Relocating to a new city is an exciting experience — you can seize the opportunity to live in a new way if you’re bored with the status quo, and maybe find a place to live that caters to new habits you want to form, or that’s a better fit for a growing household.

But relocating successfully means that you’re going to have to do some research to make sure that your new digs are perfect for you, especially if you’re planning on buying a house. Yes, it’s true that you can always sell if you’re not entirely happy with your new purchase, but to avoid capital gains taxes, you’ll need to live most of the year in your new place for at least two years, and that can feel like a very long time if the property isn’t a good fit for you.

Not sure where to start with your relocation research? Here are 19 avenues to tap and things you’ll want to consider before you make an offer on a home.

Tap any local friends for advice and information

It’s easy to find friends all over the country in the era of social media, so before you start digging into researching your new area, think about anybody you already know who lives there and make things as easy as possible for yourself by talking to them first. They’ll be able to help you understand how long it takes to get from Point A to Point B and which neighborhoods or suburbs you should seriously consider from the start (and which ones to avoid).

Another bonus: Friends often have similar interests and tastes, so talk to your friends about what they like to do on the weekends, their favorite restaurants, and any other recreational or after-work questions that you have about their city or town. Once you’ve got a good idea of what their life looks like, it’ll be much easier for you to determine what you want yours to look like when your move is complete.

Learn about the neighborhoods

Big cities have numerous neighborhoods where you might find happiness, so take some time to learn about which different neighborhoods seem most promising to you, and which ones you might want to avoid. It’s always nice to talk to someone who lives in the area to start working on your lists, but if you don’t have any contacts in the metro or town where you plan to move, then start looking at Google Maps or another internet source to figure out which neighborhoods exist, then do a little bit of light research on each one.

Some neighborhoods or towns even have their own websites, and you can learn a lot about your potential new area by reading over those, or checking out local blogs — tap into the power of the internet to start narrowing your search.

Research the rental and real estate markets

Whether you want to rent or buy, it makes a lot of sense to research the real estate and rental market where you might be moving. If you want to start with renting but plan to buy eventually, then you’ll want to know how prices in the neighborhood line up with market averages — and if you’re planning on buying, you still want to understand the rental market in case you ever want to put your house on Airbnb for the weekend or rent out a room in your house. If you don’t know where to start here, there are a ton of websites — some more reliable than others — where you can find market statistics, but to get the real scoop on what the markets are like, find a trustworthy real estate agent and ask them for help.

Set up alerts for listings

Even if you don’t plan on moving for a few more weeks, you’ll want to start looking at home, apartment, or condo listings — whether for rent or for sale — to get an idea of what you’ll have to pay and what an average place looks like in terms of bedroom/bathroom count, square footage, the age of the property, its condition, and so on. You can get access to these listings through several websites that offer this information, but be aware that the listings you see on Zillow or Trulia might be outdated by the time they make it to your inbox. Still, all you’re doing right now is looking and getting a feel for your options, so that might not be a dealbreaker … but you’ll definitely want to set up a reliable method for finding a place to live when the time comes to actually go shopping.

Examine the cost of living

The real estate market is just one of many factors that will influence your monthly expenses; you’ll also want to look into other cost-of-living factors, like the price of gas, public transportation, utilities (electricity, gas, water, and internet providers), and even the average cost of groceries, which can vary from state to state and city to city. It might seem like moving to a more rural area is a good way to save money, but if the cost of healthcare and groceries is higher than you’re used to paying, then maybe it’s not such a great deal after all — make sure you understand what you’re getting into before you move.

Dig into crime statistics

You might think that the level of crime doesn’t matter, but if your bicycle gets stolen or your house gets burglarized because you neglected to secure one or the other, then you’ll quickly regret your complacency when it comes to crime. High-crime neighborhoods are sometimes where you can find great deals on housing — and if you’re comfortable with the level of crime, then don’t let us talk you out of it! — but you’ll want to be aware that crime exists so that you can take appropriate precautions to be as safe as possible.

There are a number of online sources that document crime on a neighborhood-by-neighborhood and even block-by-block level, and you can also research neighborhood watch groups or the local police department to see how it’s being handled by the community or the authorities.

Understand what the schools are like

Even if you don’t have children, it’s always smart to research schools before you buy a home, especially in a new area. After all, when it comes time to sell your house, many of the potential buyers thinking about putting in an offer may have kids themselves, and you won’t be doing yourself any favors at that future date by ignoring school ratings today. And high-quality schools can also be an indication that the community invests in itself, so you can often expect to find other amenities — like parks and trails and rec centers — where you find good schools.

Investigate the local scene/culture

Every neighborhood has its own unique flavor, and you’ll want to make sure you enjoy the taste before you decide to put down roots there. So after you’ve narrowed down the neighborhoods or towns on your shortlist, spend some time digging into what makes them special. Are there several venues for live music where you can count on seeing well-known bands? Coffeeshops with regular poetry readings? Universities or colleges nearby with a large student presence? Whatever the case, educate yourself about how neighborhoods define themselves — and how they measure up against each other in terms of cultural assets that you think are important.

Consider the job opportunities

If you’re relocating for a job, then you might think this is an unnecessary step — but you always want to think about your own future, and in this day and age, it’s pretty rare for someone to stay in the same job for a decade or longer. Make sure that there are other opportunities for someone with your skillset and your career history in the area so that you know you’ve got room for advancement, even if it doesn’t happen at your current employer. And if those opportunities don’t really exist or your current employer is the biggest, most prominent option in the market, then you might want to seriously think about whether buying or renting is a better choice for you in case you want to pick up and move again in a year or two.

Compare your salary

A lot of areas with a high cost of living also tend to offer pretty high salaries, and the opposite is also true — in places where you don’t have to spend as much money on living expenses, you probably won’t get paid at the very top of the market, either. Spend a little bit of time looking at how the salaries for your job title line up with the local market where you want to move and also nationwide, so that you can get a good sense of whether the companies in the area tend to pay fairly, whether people are generally underpaid, and what you might be able to do about it if you don’t think your salary is going to cover everything you need it to cover.

Research community assets/attributes

You may have already uncovered some of this information in your prior research, but it never hurts to dig a little bit deeper, so think about the assets and attributes you want most in a community and then ask yourself whether the neighborhood or town you’re considering has those qualities. Maybe it’s a top-of-the-line public library, or perhaps you love to trail-run and want to make sure there are plenty of places within easy walking or driving distance where you can do that. Golf? Swimming? Historical sites? Shopping? Restaurants? Those might not all be necessities or dealbreakers, but it’s always good to know if you’re going to have to drive 20 minutes to sit in a sports bar and watch the big game, or if there is likely to be one right down the road from you.

Spend some time on the Chamber of Commerce site

The local Chamber of Commerce website can be an absolute goldmine for learning more about the neighborhood or community where you want to live. Not every business joins the Chamber, but plenty of them do, and you might also be able to find out information about planned developments that are under construction or haven’t yet broken ground, Chamber-hosted events like holiday parties or summer picnics, and even discover sports leagues sponsored by local businesses that you never knew existed. For each neighborhood you’re seriously considering, give yourself some time to look into the Chamber of Commerce website to see what else it has to offer that you haven’t yet considered.

Lurk on the local Facebook page

Nextdoor might be the gold standard for community-based social media, but if you aren’t living in the neighborhood yet, then you likely won’t be able to get a Nextdoor profile to see what’s going on there. Instead, tap into Facebook, which usually has a number of local pages or groups that you can join to learn about the area — some of them are even demographic-specific, like parents with toddlers or business-owners. Unlike Nextdoor, you don’t need to live there to join, and you can use it as a forum to ask your own questions and determine whether or not the area is truly a good fit for you.

Investigate Instagram tags

Instagram might not have neighborhood-specific groups, but the ability to pinpoint your location or add a hashtag to a photo or video on the image-sharing social media platform can be incredibly useful for relocating buyers or renters who want to learn more about the area. You can get a sense of what locals and tourists like to do when they’re out on the town, and acclimate yourself to a new geographic space before you even get there, simply by spending some time exploring the tags on Instagram.

Do some research on

Even if you’re not a member — and even if you don’t like meeting up with people in general — this is a wonderful resource for learning about the different group meetings that are happening in your (potentially) new neighborhood and whether there are any options that appeal to you personally. Whether it’s a book club or kickball or a beer-tasting league, just about any kind of group activity is documented and advertised on, so it’s a good idea to poke around and see whether the adults (or kids) in the area like the same things that you like … and are organized enough to celebrate it together.

Think about climate and natural disasters

You may not like to think about the worst-case scenario, but let’s face it: It’s just not smart to move to New Orleans or Miami without understanding the possible impact of hurricanes or to head for the mountains without knowing that wildfires are a real possibility, just to name two examples. So before you commit to a move, it’s smart to think about the climate in your new locale in addition to researching any “typical” natural disasters that could occur, whether that’s tornadoes in the Midwest or earthquakes on the West Coast. All things considered, you might decide that you’re fine taking a chance with your new locale’s typical natural disasters … but you definitely don’t want to make any decisions without at least thinking about how they might impact you.

Study traffic patterns and public transportation

If you’re used to a short commute to work, then you really don’t want to move into a new house in a new area only to discover that it’s going to take you 90 minutes each way to get to the office and back again. Before you buy — or rent — take some time to learn about the traffic patterns and public transportation in the neighborhoods or city where you’re moving so that you can be prepared for your trips to work, buy groceries, attend school, go to the gym, or perform any other necessary tasks that help make your life (or health) easier. You can use apps on your phone like Waze to chart how long it usually takes to get from Point A to Point B in a car, and some local public transportation offerings also offer apps or at least websites that will help you understand the train or bus schedule and figure out whether it fits your lifestyle.

Read the local paper

Not every area has one, but if the place where you’re considering relocating does, then there’s almost no asset as useful to a move as the local newspaper. Read it online (you may have to subscribe, but it’s well worth the price if only to take a look at the classified section — yes, it still exists!) or get a print copy if you can, but take the time to look through the paper cover-to-cover as often as you can. Even if you’re not that into sports, learning about how the city or town where you’re moving feels about its major league teams (and whether you can expect heavy traffic on game days) can be really useful, and even if you’re not normally a reader of the lifestyle section, it can also give you important insight into how other citizens and community members in the area spend their time.

Rent an Airbnb in the area

Before you make the move itself, it’s usually a good idea to spend some time in the new locale so that you can decide whether it’s really for you before you invest in moving there. Hotels are great, but to get a true sense of what it’s like to live there, rent an Airbnb or another vacation rental so that you’ll be staying in an actual residence like the one where you might live. This will give you plenty of opportunities to figure out where the local grocery store is, how to get to the park, the best route to work, and more.

Relocating is an adventure, and adventures can be inherently stressful if you don’t entirely know what to expect. So before you relocate, do your research — you’ll be much happier with the home you end up renting or buying if you’re able to sink your teeth into your new locale before you drop hard-earned money on a deposit or down payment.


Top 15 Reasons For Sale By Owners Listings Fail

In a seller’s market, it’s easy for a lot of sellers to reach the conclusion that they don’t actually need a real estate agent to offload their homes. After all, there are buyers everywhere, and home prices are skyrocketing; how hard can it really be to just do it yourself and save some money on agent commission?

Unfortunately for many of these for-sale-by-owner (FSBO) aspirants, the answer to that question is almost always “much, much harder than you think.” Research shows that FSBO listings take longer to sell, usually sell for less than market value, and require a lot more work from the seller than those sellers anticipate. Plus, seller’s markets don’t last forever — this one appears to be at a plateau, if not an outright downslope — so counting on the market to save you is naive at best and could potentially cost you a lot of money while you re-calibrate your expectations.

Why do FSBO listings fail so frequently? Here are 15 reasons they usually don’t work as well as the seller hopes they will.

FSBO owners don’t do the required work before listing a house

Most of us love the home where we’ve lived for years, and it’s hard to understand why it’s not equally appealing to every buyer who walks through the door. Here’s the thing: Buyers are comparing your house to the pristine, staged listings they’re seeing online and in-person, so if you don’t do the bare minimum to make your house look excellent, it’s going to look — how should we put this? — average, mediocre, less than fabulous. And that’s going to mean lower offers than you could be getting.

When working with an agent, most sellers spend a lot of time decluttering their house, removing furniture and storing books, decorations, clothes, and anything else that’s causing overflow on coffee tables, countertops, and inside closets. Interior walls get a fresh coat of paint (and sometimes the exterior of the house gets some paint-related attention, too), and floors get professionally cleaned especially carpets. Long-neglected repairs that haven’t seemed immediately necessary must be tackled. And most sellers spend a lot of time making sure that the outside of their house screams “curb appeal,” including polishing up the deck, putting new cushions on porch furniture, weeding and mowing the lawn, painting or restaining the fence, resealing the driveway — you name it.

Smart sellers sometimes also spend the money upfront to get a full inspection of their home before it goes on the market. This is an extra step, to be sure, but it’s smart to know what an inspector might find and tackle it before any buyers step inside; that way you won’t encounter any nasty surprises during the closing process.

FSBO sellers simply don’t know that all of these steps are highly recommended before you list the house, so it’s not their fault for skipping them — but the fact that they do skip these steps results in fewer offers for less money, which is not usually the outcome an FSBO seller is seeking.

The pictures are terrible

What makes a good home listing photo? Because a picture is worth a thousand words, it might be worth your time to pull up your favorite listing portal and spend some time looking at the different listings in your neighborhood or city. If it’s like most markets, you’ll probably be able to spot a difference between the listings where an agent has facilitated clean-up and hired a professional photographer to capture the house … and the listings where owners just kind of cleaned up to the best of their ability and then used a smartphone to take the photos.

High-quality listings photos get buyers excited to see the house because they can already imagine themselves living there. If the pictures are full of your stuff and your pets (and a close-up of the toilet — why?) then it’s difficult for buyers who are browsing online to picture their life unfolding inside the walls of your house because it is still very clearly yours. And because most buyers in 2018 start their home search online, you’re going to put yourself at a disadvantage if your listing photos are out of focus, full of clutter, and generally don’t make your house look as amazing as it is.

They aren’t marketing the home very well

Pop quiz: What’s the MLS and why do sellers need it? If you don’t know the answer to that question, then you’ve got some research to do before you FSBO your own home — but marketing a house goes well above and beyond simply putting your house on the MLS. (To answer the question: The MLS is the multiple listing service; it’s how real estate agents and brokers in your area let each other know that a home is for sale.)

There are some FSBO hopefuls who simply put their home up “for sale” on Zillow and then wonder why they’re not generating any interest. Although Zillow is a lot of fun and it does get a lot of traffic, many serious buyers aren’t using it to find their homes because it doesn’t always show the most updated homes for sale or have immediate information available about whether a listed home is under contract, which can be frustrating for buyers who want to move sooner than later. For that reason, most serious buyers are using the local MLS for their home search.

It costs money to list your home on the MLS (listing agents will take care of this for you, however), and you’ll need to take the time to fill out a description of your house and make sure you’re including some important information, such as the roofing material and how many parking spaces are available.

The MLS or Zillow (and other real estate portals) are far from the only places where potential buyers might find your house. Real estate agents also use Facebook and Instagram to target potential buyers; they might also create a house-specific website for Google to index; and there’s also print advertising, local fliers and announcements, and the old reliable sign in the front yard announcing a home for sale. Most FSBO sellers pick just one or two of these marketing techniques and miss out on a ton of potential buyers as a result.

They don’t screen buyers very well

Despite what television ads might have encouraged you to believe, getting a mortgage is truly not as simple as pulling up an app on your phone and answering a few questions. That may get you a pre-qualification, but a pre-qualification and a pre-approval are two very different things — one suggests that a lender might loan a buyer a certain amount of money for a home, while the other states that if the buyer can find a house that meets all the lenders’ criteria within the range of money that the buyer has requested, then the lender will loan them the money they need to purchase the property.

If you’ve been through the mortgage loan process yourself in the past decade, then you know how tedious and time-consuming it is. Buyers who are looking at FSBO homes might not be represented by an agent, who can help the buyer get pre-approved for a mortgage, so it’s entirely possible that the buyers who are walking through your house and demanding answers to questions may not be able to afford to buy it at all. One of the many things that a listing agent does for clients is to make sure that any buyers who are walking through the house have been pre-approved to buy a house — and could potentially buy your house. If you aren’t asking some tough questions of the buyers who express interest in your house, then it’s possible you’re wasting time on people who can’t actually make an offer.

They aren’t around to answer questions about the home or set up showing times

Buying a house is a big deal, and it’s understandable that buyers will want time to walk through the home and see it for themselves, and that they may have plenty of questions about the house that aren’t answered in the listing before they take the time to see it. Some FSBO sellers are under the mistaken impression that homes “just sell themselves” and therefore do not make themselves available to answer those questions or to set up a convenient time to look at the house.

If FSBO sellers don’t make answering these questions and setting up showings a priority in their lives, then they’re going to miss out on a big pool of qualified buyers and very likely end up settling for whatever offers they can get. That probably isn’t the outcome they were dreaming of when they decided to FSBO, but it’s the reality when buyers don’t have someone available to help them make a decision about whether they want to see the property and then get themselves in the door.

They’re too slow to respond

Of course, life happens, and it’s also understandable that some FSBO sellers might make a true effort to get back to buyers when they have questions or want to set up a showing. But if it takes days or even weeks to respond to those buyers, it’s very likely that the most qualified buyers will have moved on with their search by the time the FSBO seller gets around to replying to a message.

Buyers are almost always on some kind of timeline around when they need to be in their new house. They may not have a lot of flexibility with that timeline, and “if you snooze, you lose” is absolutely the case for many FSBO sellers who simply don’t have the bandwidth to respond promptly to buyers.

They insist on attending any showings

Think about the last time you went to buy something specific, whether it was a pair of jeans, a piece of furniture, or a car. Did a salesperson follow you around while you were looking at the stock? And if so, did that make your buying experience more pleasant … or rather less pleasant than you’d hoped?

Humans are very much alike in that we don’t appreciate the “hard sell,” and that is especially true when it comes to buying a house. A lot of FSBO buyers want to make sure they’re on hand to attend any showings, and they don’t see what’s wrong with this practice. Wanting to be present to answer questions is admirable, sure — but a buyer isn’t going to enjoy the showing experience if the seller is breathing down their neck the whole time, pointing out attributes that don’t really matter to the buyer and urging them to make a decision quickly.

They don’t know how to negotiate

The art of negotiation can take years to master, and there’s no shame in understanding that your skills aren’t quite at the level they could be. But it can really hurt FSBO sellers who may not understand that an offer is just that — an offer — and that they can respond with a counter-offer that negotiates the price, contingencies, or other aspects of the sale that might matter to both sides.

On the flip side, FSBO sellers might over-negotiate, insisting on deal details that really don’t matter much in the long run, simply to feel like they got in a “win” over someone else. This tactic is usually apparent to buyers, who will probably decide that they like the house well enough, but they’d rather not deal with someone who appears to be unreasonable or unrealistic.

They don’t know how to work with buyer’s agents

A lot of FSBO sellers get hung up on the agent commission. They feel like paying a percentage of their home sale to an agent is a waste of money, which is why they are interested in an FSBO sale in the first place. But that commission goes to pay two sides of the deal — it doesn’t all belong to the listing agent; typically, half of it is used to pay the buyer’s agent.

Buyers tend to work with a buyer’s agent, especially in a hot market when finding a home can be tough. The buyer’s agent will make sure that buyer is pre-qualified, help them locate a house that they love, and facilitate the negotiation, the offer, and all the steps that come in between “under contract” and “closed.” That buyer’s agent rightfully wants to be paid for this work, and when an FSBO seller issues a blanket declaration that they won’t offer any commission at all, then either the buyers have to pay the agent out of their own pockets (when they’re already spending thousands of dollars on a down payment, inspection, and appraisal costs, to name just a few), or opt-out of the deal.

So when an FSBO seller won’t work with a buyer’s agent, that seller is also eliminating a whole range of qualified buyers who really want or need their agents’ help to seal the deal. Reducing your pool of buyers might seem smart to avoid commission, but it virtually guarantees that you’ll get fewer offers, and those offers will be lower than they would be. (After all, the buyer knows you’re not paying any agent commission — so why would any buyer offer you “full price” for a home if you’re just going to pocket the difference? They’re smarter than that.)

They don’t know what to do when the inspection finds flaws

Most mortgage loans require a thorough home inspection before the lender will sign off on the deal — which makes sense; the lender doesn’t want to back a house that has a major foundation problem, for example, or a house that’s uninsurable for some reason. But a lot of FSBO sellers aren’t sure what to do or what their responsibility might be if the inspection uncovers a minor or major issue.

One big question that FSBO sellers have about inspections after the fact is, “Who’s going to pay for the repairs?” Well, if the FSBO seller wasn’t a great negotiator (see above), then that seller could be on the hook for all of the repairs, or the buyer will be able to walk away with no repercussions and start their home search again. An FSBO seller might not think that’s fair, but these are things that get hashed out at the contract stage, and if those sellers were intent on just getting the contract signed, there’s a lot they might have missed.

They don’t understand contingencies or legal issues

Every state has different rules and regulations around home sales. Many FSBO sellers have a job outside of real estate or real estate law, so they can be forgiven for not understanding different contingencies or legal issues that could arise. But that lack of understanding can become a huge pain later on if the buyer uncovers something that should have been addressed.

Maybe you made an addition or improvement to the house and forgot to secure a permit — or maybe the appraiser finds that the price you’ve asked for the house is above market value, to name just a couple of potential problems. A listing agent can handle those problems for sellers, but FSBO sellers are on their own and might have a failed deal on their hands as a result.

The price is wrong

Pricing a home might seem easy; after all, there are internet tools available now where you can look up your address and have an algorithm tell you how much the house is worth. Surely that’s good enough?

Unfortunately, it’s not. Those algorithms are relatively new, and they don’t take the condition of your home into account — whether you’ve made significant upgrades or whether your house is actually not quite as fancy inside and out as the rest of the homes on your block. And even if your price is right on the nose for the market, most buyers are going to submit offers under asking price because they know you aren’t paying an agent commission, so why shouldn’t they get a cut of those savings, too?

They drop the ball after an offer is accepted

There are a lot of things that need to be done in between accepting an offer and handing over the keys to the buyers, including the appraisal and inspection, plus any required repairs, and not to mention packing up and moving all your stuff so the buyer can move in (assuming you already have a new place to live). The buyer will likely need a title review, too, and might have questions about any easements or the property lines, which the seller is going to have to answer promptly in order to stay on schedule — and because the transaction schedule is part and parcel of the contract itself, any deviations or delays might enable the seller to walk away entirely.

Most sellers don’t have the bandwidth to handle all the details on their own, and it’s easy to start feeling overwhelmed by the closing process even if the sale itself seemed to happen relatively easily. But neglecting any of the many small (and large) requirements can mean that the house goes back on the market and that the seller just lost the biggest, best offer they were going to get.

Investors know FSBO is an opportunity to get a house on the cheap side

All-cash investor buyers are active in every market, and many of them know that FSBO sellers aren’t as experienced as a listing agent … so they see an FSBO sale as a great opportunity to negotiate a sale to their benefit. And FSBO sellers might not even realize that they’re getting a lowball offer, especially if the home has been lingering on the market for a while and they haven’t had any professional help with pricing — all-cash usually means that the buyer can forgo inspection and appraisal, which the seller might see as a big advantage.

The longer it’s on the market, the worse deal the seller will get

These factors taken as a whole tend to add up to FSBO homes lingering on the market for longer than average. The pool of potential qualified buyers is smaller; deals may have already fallen through, and the lack of marketing means that FSBO homes aren’t getting the same attention in early days of listing as homes presented by a listing agent. The truth is that the longer a home is on the market, the more likely that the seller will have to reduce the price and make concessions before it finally sells — and the longer it’s on the market, the more buyers will ask themselves “I wonder what’s wrong with this place?” and insist on more inspection and appraisal contingencies than they might otherwise, simply because the home’s longevity on the market makes them nervous.

Selling a home FSBO is every seller’s prerogative, of course — but many of them don’t realize just how much a listing agent (and a buyer’s agent) does in order to earn that commission. And by the time they figure out that a percentage of the total sale is well worth what they get in return (and will probably even net them a higher sales price), it’s too late to hire an agent to help them get the very best value for their home.

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