In today’s market, with homes selling quickly and prices rising, some homeowners might consider trying to sell their home on their own. This is known, in the industry, as a For Sale by Owner (FSBO). Here are five reasons this might not be the best idea for most people.
1. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner: Negotiating includes, not just the price of the home, but also the terms of the sale, dates, inspections and county regulations. Are you qualified and prepared to negotiate with:
- A buyer who wants the best deal possible
- A buyer’s agent who solely represents the best interest of the buyer
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The appraiser if there is a question of value
2. Marketing to Prospective Buyers
Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have a digital marketing strategy to promote the sale of your home. Do you? The number 1 place a buyers agent searches for a home for sale is on the MLS, in fact, it’s really the only place they look. If your home is listed on a For Sale by Owner website such as Zillow or Fizber, more than likely your potential buyers never know it exists (that is not where buyers agents are looking for properties to show their clients)
3. Results Come from the Internet
Where do buyers find the home they actually purchased?
- 51% on the internet (when a realtor lists a property on the MLS (which only a realtor can do) it automatically feeds into online tools like Zillow)
- 34% from a Real Estate Agent
- 9% from a yard sign
- 1% from newspaper
The days of selling your house by just putting up a sign and putting it in the paper are long gone.
Having a strong internet strategy is crucial.
4. FSBOing has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years. The 8% share represents the lowest recorded figure since NAR began collecting data in 1981. The Colorado purchase agreement is currently 21 pages long and has updates annually. Not to mention this is only 1 of many contracts needed in purchasing and selling a home. Realtors are required to take annual update courses each year in order to keep up with the changes.
5. You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold, nationwide, by the homeowner sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense. If you’re looking to save money, keep in mind that a realtor can generally get more than you can on your own. If your bottom line is going to be about the same or less, wouldn’t it make sense to leave the work to an expert that is also insured and save ?
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer. You will not be charged a dime to get to know someone and learn from thier expertise so you really have nothing to lose.
Have questions or interested in learning more? Call, text or email me anytime, I am always here to help!