Rising home prices along with the current inventory in today’s market may cause some homeowners to consider selling their homes on their own (known in the industry as a For Sale By Owner/FSBO). However, a FSBO might be hard to execute well for the vast majority of sellers. Selling your home on your own as a “For Sale by Owner” (FSBO) can be tempting but is more complicated than it might seem.
Here are some reasons not to FSBO:
1. Pricing the Property
Doing market research on your own is tough. Too often a FSBO is not priced correctly causing the property not to sell or to sell below market value.
2. Online Strategy for Prospective Purchasers
Marketing a home is more than a local ad in the newspaper. Studies have shown that 93% of buyers search online for a home. That’s a pretty staggering number! Most real estate agents have an Internet strategy to promote the sale of your home. Do you?
3. Results Come from the Internet
According to NAR, here’s where buyers found the homes they actually purchased:
55% on the Internet
28% from a Real Estate Agent
10% Other
6% from a Yard Sign
1% from Newspapers
The days of selling your house by putting up a sign in your yard or placing an ad in the paper are long gone. Having a strong internet strategy is crucial.
4. There Are Too Many People to Negotiate With
Here’s a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO:
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
Additionally, price can be negotiated but often times an experienced agent can also negotiate terms that are favorable to a seller.
5. FSBOing Has Become Increasingly Difficult
The paperwork involved in buying or selling a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
6. Disclosures/Defects
Just because the home is being sold by the seller, doesn’t mean they are not subject to the laws governing seller disclosures.
7. You Net More Money When Using an Agent
Many homeowners believe they’ll save the real estate commission by selling on their own, but the seller and buyer can’t both save the commission.
A report by Zillow revealed that FSBOs are inclined to do so because they believe it will save money (46 percent cite this among their top three reasons), but they don’t actually save anything, and eventually end up listing with an agent.
The same report revealed that,
“While 36% of sellers that (at first) attempted to sell their homes on their own, only 11 percent of sellers—in other words, less than a third…actually sold without an agent.”
It appears working with a real estate professional is the best answer.
Bottom Line
Without doing the proper research ahead of time to know what to expect, it might end up costing you more in the long run. Before you decide to take on the challenges of selling your house on your own, let’s get together to discuss your needs. There is no cost or obligation for a seller consultation.