The last ten years have seen a sharp rise in the number of homeowners choosing to sell their property as part of the FSBO (For Sale By Owner) movement rather than listing with a traditional realtor and/or real estate company. Enticed by the premise of pocketing more money from the sale of their home rather than paying out commission to a REALTOR®, many homeowners find they’ve bitten off more than they can chew when it comes to selling their property.
Why is that?
Simply put, selling a home takes a lot of time and effort. Although FSBO is not an impossible path by any means, there are a number of key points to keep in mind before choosing to oversee the sale of your home.
Not only are you responsible for all aspects of putting your home on the market, including, but not limited to, setting the listing price, advertising the property and setting up as well as being in attendance for showings for potential buyers, you’ll also have to negotiate terms of the sale, including price, closing date and more.
For many home sellers, these tasks are worth their time and effort in lieu of paying out commission to a realtor.
But to backtrack just for a moment, let’s look at setting the listing price a little more closely:
One of the biggest risks associated with selling your home on your own is not hitting the “sweet spot” of home prices. Market changes can cause housing prices to fluctuate. If your house is overpriced, you might find it sitting on the market for longer than what you might consider to be ideal. Additionally, prospective buyers may shy away from a home that has been sitting on the market for an extended period of time.
On the other side of the coin, selling the house for too little benefits no one except the buyer. If trying to avoid paying commission is the primary motivation behind selling your home on your own, but you undervalue the price of the property, the cost-savings benefit of FSBO might not be fully realized.
This is one of many areas that working with a realtor can come in handy. Realtors have access to information on actual selling prices – not listing prices – and would be familiar with relevant market demands and changes.
Statistics show that selling your home with the assistance of a professional realtor will garner you a bigger profit. According to the National Association of Realtor’s 2017 Profile of Home Buyers and Sellers, the average FSBO sales price was $190,000, while the average price for a home represented by an agent was $250,000.
That report also showed that only 8% of home sales in the U.S. were FSBO, the lowest recorded shared since the report’s debut in 1981. It also stated that 87% of buyers purchased their home through a real estate agent or broker, a share that has steadily increased from 69% in 2001.
A full 28% of FSBO home sellers failed to do any marketing to sell their home. And of those that did, 35% used a yard sign while 24% relied upon friends, family or acquaintances to help sell their property.
The most difficult tasks for FSBO sellers cited in the report include getting the right price (15%), understanding and performing paperwork (12%), selling within the planned length of time (13%), preparing home for sale (9%) and having enough time to dedicate to all aspects of the sale (3%).
Although you may think there is no one better qualified to show off your house than yourself, a realtor can ensure the presentation of your home goes as smoothly as possible.
Not only can a realtor offer expert tips on staging your home to look its best, they are also able to highlight certain features or aspects of the home that the homeowner may unintentionally overlook during the presentation process. For those pressed for time and find themselves juggling a career and family, working with a realtor can be a wise investment.
The ultimate goal in any home sale process is to get as many eyes on, and as many people passing through, the property as possible. A realtor can not only have your property listed on the Multiple Listing Service (MLS), they can help promote the property via flyers, pamphlets and postcards with eye-catching photos and major selling points to help drum up interest.
These are costs that FSBO sellers would otherwise be responsible for absorbing.
Another benefit of using a realtor is the exposure they can provide to other agents who might have the perfect buyer for the property already in mind. An agent tour of the home early in the sales process allows other agents to ask questions and gather information about the property that cannot be discovered through pictures and MLS information alone. Virtually nothing can replace seeing the property in person.
Most importantly, a realtor is there to represent your best interests as a seller.
Your realtor can help you objectively evaluate each offer without compromising your marketing position. With a realtor in your corner, they serve as a bit of a buffer between you and the seller. Realtors can solicit honest and open feedback from prospective buyers, who may not be as candid when dealing with a homeowner on a one-on-one basis.
And when you’re lucky enough to reach the offer stage, they will not only help you devise a win-win agreement that will appease both parties, they can also help walk you through the process of appraisals, inspections and financing.
Keep in mind that several different variables can arise between the sales agreement and the final closing of the property, as both buyers and sellers have various legal responsibilities that need to be fulfilled.
Realtors carry Errors & Omissions insurance, which serves to protect parties from potentially financially-crippling liability should they be brought to court for negligence, errors, failure to disclose, or other possible reasons.
Your home is among the most valuable assets you’ll ever own. When it comes to selling your home, trust a professional realtor to ensure you get the job done right.