When gearing up to sell your home, there are a number of reasons you may be tempted to take on a For Sale By Owner (FSBO) sale. Maybe you want to avoid losing profit of the commission fee that the real estate agent charges. Or you may mistrust the motives of a real estate agent.
Perhaps you think you know the local market and your own house better than anyone else. You may doubt what a real estate agent can bring to the table that you have not already thought of, especially knowing all the information you need is one click away on the internet.
Roughly 70% of people will start out selling their home as FSBO but in 2018, only 7 out of every 100 homes sold as FSBO. Most FSBO sellers say the decision to sell without an agent because they sold their property to a friend, a neighbor or a relative and according to National Associations of Real Estate report, FSBO homes sold for 25% LESS than the houses using a real estate agent.
Let’s take a look at both sides of the fence:
Yes, there are benefits of selling your home as FSBO and the primary reason seller’s use FSBO is to avoid the standard 6% real estate fee and keep more profit in their pocket. But it is essential to know that local real estate agents have more expertise in pricing strategy so it is possible that the net profit of your home as FSBO could be lower than if you used an agent.
1. You will avoid paying listing agent fees. The most common reason individuals use FSBO to sell their home is to avoid commission fees. Commission fees average from 4.5-7% of the purchase price of the house and are paid by the seller.
2. You will have complete control over the listing price. Without an agent, you have the sole decision on the listing price of your home. You will need to ensure you remove the emotional connection from your home and see your house only as an asset, not a home. Consider hiring an appraiser. For $300-$500 you can get a professional appraisal of your home to aid in determining the most advantageous listing price of your property.
3. You can manage the schedule of showings and open houses. If you are in charge, you can manage your own showing calendar.
4. You are motivated to sell for top dollar. Since it is your assets on the line, you will spend the extra time and energy to ensure your home appears the most appealing and alluring to potential buyers.
5. You are the neighborhood expert. When speaking to potential buyers, you can relay some of the intrinsic benefits of the neighborhood, community and offer some emotional context.
Hiring a Realtor
Skip the hassle of all the tasks and details that are needed to sell your house as FSBO. Using a real estate agent, you relieve yourself of a lot of the stress and hours it takes to research the market, promote your home, the piles of paperwork and the endless phone calls.
1. They understand the market value and pricing strategy. Working with an experienced local, agent, they will know the value of your home and what price will bring potential buyers through the front door. They can help you walk that fine line of getting you as much money for your house as possible while still appealing to a wide range of potential buyers.
2. They are objective listing experts. They have relationships with photographers and home staging experts to ensure your home highlights all the potential amenities buyers are looking for. They remove the emotional context and focus on the best attributes of your home.
3. They have access to extensive market exposure. As we know, with the growth in cell phone usage as digital devices, it is important to utilize every digital source possible to market your home. Realtors have access to local MLS listing portals, social media presence, connections with other agents and agencies, professional networks and name recognition all of which can bring a lot of attention to your property.
4. Buyer’s agents are more likely to show your listing to clients. Real estate agents are paid on commission so some real estate agents may not show your FSBO listing to their clients for there is no guaranteed commission. As a FSBO, you can offer a commission to the buyer’s agent.
5. They will negotiate professionally. Skilled agents can spot a serious buyer and lead you to the strongest offers. Since they know the market, they are more adept to navigating the counteroffers and finding creative ways to ensure you get the most money for your home.
6. They know the paperwork. There is a lot of documentation involved in selling a home. If one “i” is not dotted or “t” crossed, the sale of your home could be extended by weeks or even worse, the buyer may get cold feet and walk away. Veteran agents are experts in the mounds of paperwork involved and the legal verbiage that comes with it.
Today consumers rely heavily upon real estate agents to sell their home with 87% of sellers last year using a real estate agent. They rely on the real estate agent to be professional, market their home to potential buyers, understand the laws and regulations of city/district government and negotiate daunting deals that could affect the final price of the house. Listing as FSBO can be challenging to set aside your emotional attachment to the home and focusing only on the process of selling. Weigh your options of using a realtor or listing as FSBO and make the decision that best fits your situation.