At first glance, choosing to go the “For Sale by Owner” (FSBO) route to sell your home can seem like a wise decision. You, like many other homeowners, may believe that doing this will result in huge savings because you won’t need to pay a sales commission for the services of an agent. Unfortunately, even though the digital age has made it far easier for home sellers to advertise their homes to potential buyers, the services of a successful, dedicated real estate professional go far beyond posting pictures on a web site and collecting commission checks and statistics are available to support the added value they can provide. If you are considering listing your home for sale by owner, the following information may keep you from making a very costly mistake.
The Commission Issue
According to the National Association of Realtors®, FSBO sales accounted for only 8% of the homes sold in 2016, but even more troubling is the fact that the average selling price for this 8% of homes sold was $190,000. According to these statistics, this figure is $59,000 less than the average selling price for homes in which a licensed agent participated. If the sales commission on this statistical sale of $249,000 was computed at 6%, the seller would still earn approximately $44,000 more on an agent assisted sale, than they would earn on a sale price of $190,000, with no sales commission is owed.
The Pricing Issue
While the technological advantages of the digital age have certainly helped make more local real estate information available to home sellers and buyers, correctly pricing a home for the market requires more than access to data. Many FSBO sellers rely on online real estate valuation sites that populate basic sales data for the area with no regard for special conditions and circumstances that can greatly influence the selling price of the homes sales they track.
Repair and condition issues, location, market activity and many other factors can all have a significant bearing on the actual sale price of any home, and these factors are rarely, if ever, accounted for in the raw data provided by these sites. Successful listing agents, however, understand the importance of knowing their market, including both current and historical information that may impact the potential marketability of each home they list.
The Marketing Issue
While it certainly doesn’t hurt to use social media to market your home when selling it by owner, this type of marketing should never be the centerpiece of your marketing campaign. Even when paired with a yard sign and a classified ad in the local newspaper, the odds of getting your home in front of a maximum number of qualified buyers using this type of limited approach are minuscule, at best.
When you list your home with a skilled, professional Realtor®, you can rest assured that it will be thoroughly exposed to the market with a broad, multi-faceted marketing plan from listing through closing. Today’s agents use a complete package of local and web-based marketing to bring maximum attention to your home. Not only will it be constantly marketed to buyers via local and web-based advertising, it will also be constantly presented to other agents and brokers who may already be working with the buyer who will ultimately purchase your home.
The Networking Issue
Like most people, you probably have a sizeable circle of friends, family, coworkers and acquaintances. Unfortunately, however, most of your circle will probably not be interested in purchasing your home. In contrast, a successful Realtor® likely has a sphere of influence of thousands, made up of past clients, mortgage brokers, inspectors, repair people, service professionals, fellow real estate professionals and more. Since many of these people are directly associated with real estate, it is far more likely that networking among this group will be better able to yield viable buyer leads for your home.
The Negotiation Issue
Another area that is difficult for FSBO sellers is negotiating the purchase contract and any inspection or other issues that might arise during the process. As a FSBO, you will be in the often uncomfortable position of having to deal directly with potential buyers. When represented by a skilled agent, however, you can rest assured that he or she will act honestly in all negations, with only your best interests at heart.
The Convenience Issue
One of the biggest problems reported by those who market their home by owner is trying to schedule buyer appointments and deal with those buyers who show up on their doorstop at inconvenient times. Because they want to sell their home, they often choose to allow even inconsiderate prospective buyers to view the home on a whim and then feel frustrated, or even violated, when these buyers disappear without a trace or cannot qualify for a mortgage.
When you chose to list your home with a professional Realtor®, buyers will work through your agent to schedule each viewing and you will have an opportunity to decide if the showing time and date works with your schedule. In addition, each buyer prospect will be pre-qualified, to ensure they can afford to purchase your home.
In addition to the issues listed above, FSBO sellers must be prepared to accept responsibility for dealing with all necessary documents, title preparation and dealing with inspections and repairs, often while trying to find, purchase and move into another home of their own. If this sounds like a lot of work, it is.
While it is true that real estate professionals are paid by commission, they do not get paid until your home sells so there is no out of pocket costs during the listing period. After considering all the issues listed above, do you still think selling FSBO is the best choice for you?
In any case, consider contacting a professional real agent in your area before making a final decision. They will be able to help you understand the entire listing and selling process, as well as help you determine how to prepare your home for the market.