Rising home prices coupled with a lack of inventory in today's market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale
By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.
The top five reasons not to FSBO are listed below:
1. Online Strategy for Prospective Purchasers
Studies have shown that 95% of buyers search online for a home. In comparison, only 13% use newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
• 50% on the Internet
• 7% from a yard sign
• 28% from a Real Estate Agent
• 1% from newspapers
The days of selling your house by putting up a sign or placing an ad in the paper are long gone. Having a strong Internet strategy is crucial.
3. 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:
• The buyer, who wants the best deal possible
• The buyer’s agent, who solely represents the best interest of the buyer
• The buyer’s attorney (in some parts of the country)
• 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
4. FSBOing Has Become Increasingly 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 7% over the last 20+ years.
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.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything. In some cases, they may actually cost themselves more by not listing with an agent. One of the main reasons for the price difference at the time of sale is:
“Properties listed with a broker that is a member of the local MLS will be listed online
with all other participating broker websites, marketing the home to a much larger buyer
population. And those MLS properties generally offer compensation to agents who
represent buyers, incentivizing them to show and sell the property and again potentially
enlarging the buyer pool.”
The more buyers that view a home, the greater the chance of a bidding war for the property.
The study showed that the difference in price between comparable homes of size and location is currently at an average of 6%.
Why would you choose to list on your own and manage the entire transaction when you can
hire an agent and not have to pay anything more?
Bottom Line
Before you decide to take on the challenges of selling your house on your own, let’s get
together and discuss your needs.
~Information taken from Keeping Current Matters, Things to Consider when Selling your Home, Fall 2019 Edition