In today’s home market of rising home prices and dwindling inventory, some home owners may be considering trying to selling their properties on their own. This process is known as a For Sale By Owner or FSBO. There are several reasons why this may not be the best options for the majority of sellers.
Exposure to potential buyers
According to the National Association of Realtors, 94% of buyers do research for their home purchase online. In contrast, only 16% of buyers refer to print or newspaper ads when looking for a new home. Real estate professionals will have an internet strategy and a network of contacts to which they can promote your home. As a home owner, do you have that same strategy and reach in place?
When it comes to selling your home, you will need to be able to negotiate with the buyer, the buyer’s agent, the buyer’s attorney, the home inspection company, and the appraiser. The buyer and their agent are trying to get the best deal possible for your home. When it comes to adding on potential repairs and the bank’s determined value of your home by additional parties, it can get incredibly complicated.
Ten to 20 years ago, FSBO transactions were not as infrequent of as they are today because the transactions were less complicated. However, industry disclosures and regulations have become mandatory and the subsequent paperwork has doubled. The number of FSBO transactions has gone from 18% to just over 8% in the past decades due to the increasingly complicated transactions.
Chances are, you will net more profits when you use a licensed real estate agent versus taking on the challenge of selling on your own. While you might save a portion of the commission by selling on your own, you will still end up paying the commission on the buyer’s side of the transaction, only saving yourself 3% in total. Agents also frequently target FSBO properties for potential buyers because they know they can get a great deal on these listings. It isn’t possible for the buyer and the seller to both get a great deal. And since the sellers are doing all their own negotiating, they often come up short on pricing appropriately, targeting the right audience, and getting the best offers for their homes. This means settling for long list times and/or below market value offers.
Before you decide to take on the challenges of selling your house on your own, it’s important to meet with some agents in your area and discuss the options available to you. You will find that the value offered by using a real estate professional greatly outweighs the small commission savings you will get on the back end by doing it all on your own.