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The pitfalls of selling a home without professional help

Question: Shame on you. Week after week you tell home sellers to interview three real estate agents before choosing the best one to list their home for sale. That's garbage. About four years ago, my wife and I sold our home by ourselves, and we saved at least $7,500 sales commission. Our family lawyer handled the legal details and arranged title insurance for the buyers. It took us about two months to find a buyer, but I understand that is a typical sales period for homes.

Although you give lots of sound real estate advice, the one area I think you are wrong is to recommend that home sellers list with a real estate agent. I'll bet you get paid by the Realtors to say that. Honestly, now, how much do they pay you? _ Thomas R.

Answer: Sorry to disappoint you, but the Realtors do not pay me anything, nor does any other organization except the newspapers that use my articles. I must admit, however, that back in the early 1970s I was a Realtor, but when I started writing these columns I dropped my membership to avoid any conflict of interest.

However, some Realtors aren't too keen about my recommendations either. They especially dislike my suggestion to interview at least three agents before selecting the best one after checking their references of previous sellers.

You would have enjoyed a radio talk show where I recently was a guest. One Realtor said she generally agrees with my comments, which often are discussed at their office sales meetings. Then she added that my column is frequently put up on the wall for the sales associates to throw darts at.

The primary reasons I recommend that home sellers select a real estate agent to professionally market their homes are that most homeowners are not capable of selling their own home; one costly mistake _ such as underpricing the house or not selling it quickly and having to make many extra months of mortgage payments _ can be far more expensive that paying a sales commission; the old days of caveat emptor (let the buyer beware) are gone, and realty agents can best protect sellers from liability to buyers; realty agents are trained to use professional marketing methods, such as the multiple listing service; and most homeowners don't have the time or skills to know how to sell their homes.

Most do-it-yourself home sellers wind up listing their homes with a professional agent, so why waste time and money trying to sell a home alone?

Foreclosure sales

Question: I recently read a magazine article about a man who has earned a fortune buying foreclosure houses and fixing them up to profitably resell. Please tell me how I can find out when the foreclosure sales are held. _ Marilyn R.

Answer: Even in the best communities, foreclosure sales occur, but most people don't know about them. It takes work and diligence to track and successfully acquire these distress properties.

Start at your county office where notices of default are recorded. You may find that these notices also are published either in a legal newspaper or in a privately published newsletter.

Ask the county recorder, real estate lawyers and realty brokers for the best information source in your town.

There are three opportunities to buy these properties: from the defaulting owner before the foreclosure auction, at the foreclosure sale and, if there were no bidders, after the auction from the foreclosing lender.

You will soon learn the pros and cons of when to buy at the right time.

Early move discouraged

Question: We signed a contract to sell our home. The buyers wanted a 60-day closing since they needed time to move from overseas, but the move came sooner than expected. Since our home is vacant they want to move in now even though their mortgage won't be ready for another month.

Our realty agent advises against letting the buyers move in early, but I feel so sorry for them living in a motel. What should we do? _ Ruth W.

Answer: Listen to your smart real estate agent. If you let the buyers move in, they will surely find real or imagined defects in your home. They may even refuse to close the sale until you repair the problems or reduce the sales price.

Don't give your buyers unnecessary leverage over you. Keep them waiting to move into your home until after the deed is recorded.

Setting the price

Question: After talking with several local realty agents, we have a pretty good idea of the price we can get when we sell our home, but we are confused about setting the asking price. One agent advises putting the price about 10 percent above what we expect to get, but another one says we should set the price at what we will take for the house.

How should we set our asking price? _ James L.

Answer: Most homes sell between 5 and 10 percent below their asking prices. In other words, most sellers overprice their homes. However, many homes sell very close to their asking prices because the sellers were realistic and didn't inflate their asking prices.

My suggestion is to use an asking price not more than 5 percent above what you expect to get for your home.

Robert J. Bruss is a nationally syndicated columnist on real estate.

If you have a question, write to him in care of At Home, St. Petersburg Times, P.O. Box 1121, St. Petersburg, Fla. 33731.