How is the DIY mentality impacting Franklin TN Real Estate
October 8, 2017 | Mike Grumbles

THE DIY REVOLUTION HAS COME TO REAL ESTATE.


We now live in an environment where everyone has access to the internet and it's vast amount of information on any subject all at the tip of their finger, the click of a remote, or a voice command into their cell phone.  Just ask Siri how to change a light bulb and she will direct you to Wiki-how, Youtube, or various other sources for instructions on completing such a task.

Pinterest can make your evening dinners more exciting as the elegant photos of fine cuisine with links directing you to easy to follow recipes.

You don't even need to read to pick up DIY information as some of the most viewed YouTube videos, outside of people laughing over sneezing baby pandas, are videos on how to do things yourself.  They are Edu-tainment videos and they are growing in popularity as people post How - To content to promote their wholesale parts businesses with videos where they teach you to install them or  just everyday people posting and sharing their experiences doing things themselves.  

HGTV shows entire home makeovers during a 60 minute episode, making the entire process look easy.   You can follow along as Vanilla Ice converts foreclosures into mansions, or watch as families actually get involved and fix their bathroom or kitchen in a single episode based around a weekend.    

Big box hardware stores host educational seminars almost every weekend on how to do many household upgrades all by yourself in hopes of selling you the products and tools to get the job done yourself.

Regardless of where the information is coming from or how you choose to receive it, the trend of DIY is catching on and spreading into the real estate market.   Is this DIY mentality infiltrating  buying and selling the largest single asset most families will ever own in our local Franklin housing market.  The answer is YES it has.      

It may not be just the readily available resources and information that have caused the DIY mentality to grow in popularity?  It could be because the price of housing has increased so rapidly in recent years that consumers are looking for a way to save money.   In the past two years in Williamson County the average sold home jumped from $474k to $542k , a growth of over 14%,  so the buyers and sellers are concerned over paying a 6% commission to sell a home.  This 14% increase in the average sales price equates to an additional $4000 in commission on a 6% listing agreement.  The sellers don't want to absorb that increased cost and the buyers are struggling to make housing affordable so they also want to try to negotiate direct and avoid increased cost due to commission.   I tend to feel that the DIY increase in real estate is a combination of this "I can do it myself" attitude as well as the squeeze on finances for buyers.  The sellers in the current climate do have the equity in their homes with a 14% increase over the past 2 years to be able to pay a large commission but their attitude is why pay such a large commission if they can avoid it.   The average commission in Williamson County, assuming a 6% listing agreement, is after all $16,260 on a $542,000 home.

The question is should the DIY attitude be used in the Real Estate market when you are buying or selling your largest investment.   The cost if things go wrong are extremely high.  You could simply forfeit an earnest money check of about $5000-$10,000 or it could end you up in court being sued for specific performance or damages.  

Lets look at other professional services and see what you would think if you decided to do it yourself.

Would you stop going to the Dentist to get your teeth cleaned every 6-12 months?  I mean you could just stare into the mirror and buy the dental hygienists tools and scrape your own teeth and practice strong flossing and brushing habits.   You would likely be missing hard to see and reach spots and would not be able to do x-rays on your teeth to look for hidden problems.  The down side could then be tens of thousands of dollars in dental surgery to fix the future problems caused by lack of proper care.

Would you change your own timing belt on your car or  flush the radiator and brake lines every 100,000 miles as your owner's manual calls for.   Sure there are YouTube videos to guide you but the videos are great as long as everything goes smoothly.  What about that bolt that strips or the head breaks off when trying to remove it and do you have the right tools to do the job properly like a torque wrench to gauge the correct specs when re-assembling the  components?  Wouldn't you just have more peace of mind putting your family in a car that was cared for by a professional, backed by a warranty?

Personally, I am a DIY minded person.  I mow my own lawn, I trim my own hedges, I have even changed my own brakes and in the past I have installed a new clutch in my old Miata.  But I will say that I have a Mechanical Engineering degree and previously worked as a Transmission Automotive Design Engineer.    However, there are still places where I draw the line.  I consult professionals that do what they do day in and day out so that they have experience when the "Fit hits the Shan".  It is in those times that you need a problem solver with years of experience.    Also you need them to avoid having any bumps in the road along the way by foreseeing and protecting for those things in the first place.  I go the the Dentist twice per year,  I call a licensed Roofer when I have a shingle that needs repair,  I even take my sophisticated BMW M3 to the repair shop when the valves need to be adjusted or the engine cover needs to come off for servicing.

A good REALTOR that has been in the market for 2 or more years should have sold about 20+ homes some as a buyers agent and some as the listing agent.    That would mean that they have done enough business to experience things and to know the steps to a successful transaction and be able to know when something is going wrong.  Also each transaction gives them new insight into how to avoid a problem in the future.     Trust someone who sells a house or two or more per month to handle your real estate transaction.  They do it daily where as you are doing it on average once every 10 years.  Even if you are a more frequent buyer and seller, do you do it enough to protect against pitfalls?  Not likely as laws do change, the market does change,  and the expectations of the buyers and sellers change and thus knowing what is current and relevant is important.

Sure selling a house involves marketing and with apps likeNextDoor, social media groups, and chat rooms getting the word out about a home for sale is easier than it has ever been.  But that ease and affordability also makes it harder to make a home stand out and to differentiate a home in marketing.  REALTORS are there to consult on how to prepare a home and then to market the home and then when offers are received to help navigate the offer and understand the steps involved.  Because of the reduction in cost for marketing and less need for traditional marketing methods many business models have shifted offering the seller a reduction in listing commissions.  Gray Fox Realty is exactly that kind of model.  The steep reduction in the cost of the way we market and the availability to create systems using technology to get things done faster, and easier have allowed Gray Fox Realty to have a Full Service Flat fee program for sellers.    You can learn more about the $995 listing program at GrayFoxRealty.com.

For a Buyer to attempt to DIY the purchase of a home that is listed for sale on the local MLS (Multiple Listing Service)means contacting several different listing agents and setting up single showings instead of letting the agent help you search for homes and setting all the appointments.  Not having a relationship with a single buyer's agent also means there is no one to discuss the pre-work of buying a home.  Things like down payment savings and financing strategies, talking with a lender to understand loan programs and options.  Sure these can be done with a lender directly but without a pre-established relationship to a lender opening up the yellow pages and throwing darts is not the best way to choose that person either.    Talking to a listing agent, is tricky to navigate, how much information is to much to divulge about yourself, your finances, and your situation.   The information that you provide will be provided to the seller should you decide to move forward with an offer.    The biggest mis-understood notion in trying to save the buying agent commission by doing it yourself is that the listing agent and the seller already have a confidential and binding agreement on the total commission being paid for the sale of their home.  What does that mean?  Well when you submit an offer below the list price the negotiation is with the seller and not with the listing agent.  Thus you end up doing the work yourself and the negotiation wasn't that you saved the buy side commission, the listing agent via their binding agreement with the seller earned that buy side commission and the seller negotiated on price.    There is no place on an agreement between a buyer and a seller to discuss the compensation to the agent or agents.  Thus you are only negotiating with the seller.   Meanwhile you bought a home, making a huge investment without any support or advice from a professional that does it daily.  They can also make it easier for you but more importantly their job is to make it GOOD for you.  

I hope that you enjoyed the blog on DIY mentality and will share you comments.  




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