From time to time, I see a home listed For Sale by Owner. Some of the top reasons an owner would list their own home for sale are they want control over showings and negotiations of the sale price. Perhaps they don't want to pay a Broker a commission when they feel they can do as good a job, if not better. From my research it comes right down to commission, no? {
Please comment with your thoughts on that}
Here's a couple of questions, if you had a $300,000.00 dollar tax problem, would you take on the IRS without a CPA? If you had a $300,000.00 dollar legal problem, would you go to court without an attorney? My guess is that you're going to say NO! Well, why would you go to the table with a $300,000.00 home without proper representation?
I think one thing Sellers forget is that a Broker does not have the same emotional attachment to the property as it's owner. The other issue is that Buyers usually consult a Broker to handle their negotiations, even when a property is For Sale by Owner. We are professionals and have studied the art of successful negotiations front to back, and back to front. As an owner dealing directly with a Broker, or even an educated rouge buyer, you, as a seller, need to be ready. Otherwise, it could cost you thousands of dollars.
So, many times, the same problems can arise when renting a property on your own. Think about it, you have your vacation home on the short term vacation rental market hoping to pick up some of the carrying costs. You decide to consult a Broker who is a short term rental expert. We are educated from A - Z on how to maximize vacation rental income. We are in the market every day and can often see impending changes in the rental market and can adjust rates and advertising accordingly. We are trained to negotiate to get the best rates possible. We are here 24/7 if your tenants have an issue. For example, you are renting your house on your own. You live in northern New Jersey. A phone call comes in at 2:30a.m. form your renter saying that try as they might, they just can't find the property. They want someone to come out and bring them to it. What do you do from New Jersey? Or, here's one that happens a bit more frequently, you get a phone call from the renter saying the keys aren't where you said they were, or the lock box isn't working. Now your guests are in Lake Placid with no access to the house. What do you do? Lastly, and this is another common issue, you get a phone call from the renter saying that they got to the house, but it's not cleaned from the last rental. They are supper mad and are demanding that you get someone over there right now. You call your housekeeper and she answers from a beach in Florida. What do you do?
These are issues that happen and that you need to be thinking of when you decide to rent on your own. I used to rent a cabin at the Whiteface Club and Resort. The owner completely let us do what we needed to do to get it and keep it rented. Sometimes that meant renting it for $150.00, or less, per night. At the end of the year they ended up with over $40,000.00 dollars in gross rental revenue.
There was a cabin two doors down from this one that the owner rented on her own. She was stuck at one rental rate and would not negotiate. She also had it listed with us, but wouldn't let us go below $350.00 per night. OK. Well, long story short, she ended up with about $12,000.00 dollars at the end of the year. That's a $28,000.00 difference.
My advice to vacation home owners who list their homes for rent with a Broker is to let the Broker do their job! Even when some owners list with a Broker, they try to maintain control over rental rates, dates and so forth. I say to those owners please let us do our job! You hired us to maximize your rental revenue, let us do it. I also ask that you don't compete with your own rental agent by posting your property on one of these By Owner sites at a lower rate than what we have it listed for. What's that all about? We are here for you. We represent your best interests in the transaction. No different than a sale.
It is also very frustrating when owners list their homes for rent with multiple agencies. Almost all owners are doing it now. I believe they think that if they rent with multiple Brokers they'll get more rentals. In one word - WRONG! Most of the time we back off those rentals for various reasons. The biggest one is that when we call the
competitive agent to make sure it's available before we book it, we often hear that they have a rental for those dates (even when sometimes they don't, they just think they can). The bottom line is that we are all getting the same calls from the same renters for the same dates. Making us compete against each other means less money for you. How, you ask? It's simple. If you have your home listed for rent with two agencies, one is going to do what they have to do to obtain the rental within the contract boundaries. Sometimes that means cutting the rental rate to secure it. See where I'm going? You, the homeowner, ends up losing money. An owner needs to keep in mind that, although we all like each other, we are competitors!
I hope I have given you some food for thought on the For Sale/Rent by Owner. I look forward to seeing some comments of the topic, and am happy to answer any questions.
Wishing all a good week,
John L.S.
