FSBO: Financial Hazards of Selling Your Home Yourself

imagesWhy pay a real estate agent a 6 percent commission fee when you could simply sell your home yourself?
If you’re selling your home for $100,000, that’s $6,000! You might think you have the know-how  and experience to sell your home yourself. Even if you live in a great neighborhood, you’re going to encounter obstacles throughout the selling process that could hurt the deal, and ultimately lose you some serious money.

What Are the Financial Hazards Awaiting a FSBO Listing?

Homeowners who want to sell their homes themselves are mainly trying to save money. But does selling your home “by owner” really help you save money in the long run?

One of the largest mistakes of people selling their own homes make is over-inflating the asking price. There is little that will stop a home sale quicker than the wrong asking price. Many who list FSBO do not seek the guidance of a local real estate agent or a local real estate appraiser. If more ‘for sale by owner’ homeowners priced their homes better out of the gate, they would stand a better chance of selling their property.

Homeowners who list their homes FSBO can often capitalize off an agent’s marketing efforts when they bring buyers into a neighborhood where other properties are for sale. FSBOs who price their home as it should be can acquire a buyer and end up saving a commission. That, of course, is the idyllic situation.

Getting a buyer to write a contract is just half the battle. It’s what comes after the offer where hiring a real estate agent can be superb. That’s not to say that every real estate agent is exceptional. Finding a talented agent is where people can make a serious mistake. In fact, they may have had a bad experience previously, and that is why they have tried to sell on their own. If more FSBOs took the time to find the best agent, there would most likely be a higher level of satisfaction.

What Are the Issues Facing FSBO Listings?

An all-time high of 89% of residential real estate transactions involved a real estate professional. The share of FSBO sales was just 8 percent, the lowest since data collection started in 1981. While there is more information  available to sellers than ever before, understanding and interpreting that data requires more skill than the typical person who sells a home maybe once every ten years or so.

Most real estate professionals feel they will be doing twice the work for half the fee, as the seller have questions and issues with the inspections, appraisals, repair resolution, contract changes, amendments and settlement that need to be addressed and resolved.  Resolving these details and glitches typically falls to the seller’s agent, who is in the best position to counsel the seller.

Without counsel from a professional representing them, a sale can collapse.  As a broker with a strong buyer who makes a reasonable offer on a FSBO, the chance that that offer is accepted and goes to closing is much lower with a FSBO.

Nearly every experienced agent has had a FSBO seller promise to pay a commission and then found a way around that payment.

Time can also be a major concern. Can the seller afford to b at home for every showing, be there for the inspection,  etc.?  If they have lots of free time, this might be an option, but the agent has the expertise that could make the process take a lot less time, and providing the owner with more time to do other things.

So Should You Even Try Selling Your Own Home?

If you’re still considering selling your own home, you need to be certain you go about things the right way.

FSBOs that have the best success tend to have the following characteristics: The home is located on a well-traveled road offering the property great exposure.  They are priced correctly.  The home is located in a neighborhood with other similar homes for sale.  Even with the possibility of saving some money by going FSBO, the downside for the homeowner can be very risky. Better to be safe than sorry. Give us a call and get the best price with the least problems and in the shortest amount of time. Get a happy scenario when it comes to selling your home.

 

 

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