Thinking of For Sale By Owner?
Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). The popular belief is that by selling your home without an agent you can retain more money by not paying out commissions.
However, according to the National Association of Realtors, “for sale by owner” properties lose 28% of the price they could have gotten if the owner went with an agent (taking commission into account). USA Today did a study and found they really only lost an average of 21%.
Here are four reasons to reconsider your For Sale by Owner:
#1 – Liability
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. Are you aware of all the contracts and information that you must provide throughout a transaction? Are you aware that some activities could be illegal even with the best of intentions? This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.
#2 – Time
Will you be able to let anyone in during the week to see the property? (if not, fewer offers = less money). Do you have the time to field all the calls, faxes, and inquiries that will come with multiple offers? One missed phone call or fax could kill a deal. You will also need to make time to negotiate with buyers who want the best deal, buyer’s agents who only represent the interest of their client, investors, attorneys, home inspection companies, appraisers, and possibly your bank.
#3 – Exposure
Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home.
You will get the most money for your home in the first week that it’s on the market (in this market), and the longer it’s on the market, the less money people are willing to offer. If you try the “for sale by owner” approach and then change your approach to work with an agent, you will also have already eliminated the buyers who saw it in the first place, who may have low-balled it thinking you were easy prey, and who are not willing to make a second offer – they’ve moved on.
#4 – More Money
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 commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000. This doesn’t mean that an agent can get $46,000 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.
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. Click here to see what we can do for you.
