5 Reason You Shouldn't 'For Sale by Owner'
Why it's worth getting a pro to sell your home
Some homeowners consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons this might not be a good idea for the vast majority of sellers. Here are five reasons:
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 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 • Your bank in the case of a short sale
2. Exposure to Prospective
Purchasers 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. Do you?
3. Results Come from the Internet Where do buyers find the home they actually purchased? • 43% on the internet • 9% from a yard sign • 1% from newspapers • 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 9% 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 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. • Even Fannie Mae suggests using an agent. Here is a quote directly from the Know Your Options section of their website: • “Unless you are experienced at selling homes, it usually makes financial sense to get professional help • Homes sold by agents typically sell at a higher price and spend less time on the market.”
FSBO’s MUST BE READY TO NEGOTIATE
In a recovering market, some sellers might be tempted to try and sell their home on their own (FSBO) without using the services of a real estate professional. Real estate agents are trained and experienced negotiators. In most cases, the seller is not. The seller must realize their ability to negotiate will determine whether they get the best deal for themselves and their family. Here is a list of some of the people with whom the seller must be prepared to negotiate if they 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 termite company if there are challenges • The buyer’s lender if the structure of the mortgage requires the sellers’ participation • The appraiser if there is a question of value • The title company if there are challenges with certificates of occupancy (CO) or other permits • The town or municipality if you need to get the COs permits mentioned above • The buyer’s buyer in case there are challenges on the house your buyer is selling. • Your bank in the case of a short sale
Bottom Line 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.