You’ve decided to sell your home but now comes the first of many, many, many decisions around selling: should you list it yourself or should you hire an agent?
As true with any decision, there are pros and cons to both choices. This is your home, and your decision for what’s best for you and your family. So let’s examine them further:
FSBO (pronounced “fizzbo”)For Sale By Owner, or FSBO, is when a homeowner handles the listing and sale of their home on their own. Homeowners turn to selling a home themselves for a variety of reasons such as:
- They believe it will save them paying the standard 6 percent commission fees to the agents involved;
- They believe it will save them time; and/or
- They believe they know their home better than an agent would.
The TimeThere is a phrase in business that is especially true in real estate…”time is money.” How long your home is on the market plays a big part in the ultimate sales price in that the longer a home is up for sale, the lower the price is that it eventually is sold for. The National Association of Realtors says on average it takes about four (4) months for a home to sell, and that properties sold by agents in their MLS (“Multi-Listing Service”) sold an average 20 days faster compared to approximately 20% of all FSBO listings that had to renew their listings on MLS because they had not sold. Time is also a big factor in even preparing a home for a successful listing and eventual sale. Experience and skills are what makes real estate agents the most successful at listing a property and getting it sold the fastest at the best prices. They know what it takes and invest their time into a property to get it sold for the most money and the fastest way. Real estate agents take great pains and time investing in a property listing, getting it staged for sale, coordinating all the marketing of the property, holding Open Houses, scheduling all the property viewings, and not to mention managing the constant communications with agents, prospects, and sellers. Homeowners selling their own homes often find out the hard way how much time is involved to successfully list and sell their homes. For some FSBO sellers, this means that they’ve had to leave work early, or rearrange work schedules to limit their work hours (and their paychecks) so as to accommodate all the extra time needed to meet with photographers, stagers, prospective buyers and more – all the time-sensitive items needed to get their homes sold. Despite being in control of their schedules, last minute showing requests by buyer prospects and their agents and holding weekend FSBO Open Houses are also often painful, but necessary, time conflicts for FSBO sellers and their families. And as the stats show, not having the right experiences and/or skills in real estate adds time to the clock on how long a FSBO sits on the market, likely reducing its eventual sales price.
The PricingWhen you have a real estate agent, their main responsibilities are to use their experience to price your property with the best price for your home in that market and to use their skills to get in the most qualified buyers interested in your home that they can. Experience and skills are what it comes down to in getting the best price possible for your home in the shortest amount of time on the market. If you were to try to do this aspect of selling your home on your own, be prepared for a lot of research into how your home compares to others in the market. Many For Sale By Owners don’t realize the heavy time commitment to do the necessary research in this. Homeowners should be especially mindful too of not letting emotions for their home come into their valuation of their home. A home evaluation for listing price should be done dispassionately and based on solid research. It is advised that FSBO owners should consult a qualified real estate appraiser to assist them with this. Professional real estate appraisals can average in cost between $300 – $500.
The MarketingHow do you sell a home fast and for its best price? You need to get the greatest amount of qualified buyers to be seriously interested in the home and to do that effectively requires great marketing skills. Experienced real estate agents come to list a home armed with a strong understanding of the real estate market overall, for that particular area or neighborhood, and where a home fits in that market. The agent will also be able to determine a home’s best selling points and how to strengthen them, while minimizing a home’s detractors, bringing in proven specialists in real estate photography and home staging that they have established relationships with to do just that. Because real estate is their daily focus, real estate agents have established and branded social media presences and access to the local MLS and other online listing sites. This is important to home sellers as the National Association of Realtors says that today 90% of all buyers are looking for their homes online. In addition to featuring a property online, realtors have their professional networks and relationships with other agents within which to promote a property, all for the purpose of drawing in the most amount of qualified buyers. For Sale By Owners have their own finances to consider with the successful sale of their home, so they are certainly motivated to market their home well. The internet has recognized this, and today there are more tools available than ever before for home owners to sell their homes online; some with a flat fee of $1000 or under. Other marketing costs to consider for FSBOs are for professional photos, home stagers, signage and print ads in local newspapers and real estate listing magazines.
The NegotiationsIt is said that there is an art to negotiating successfully. Buying and selling a home is a negotiation and a legal transaction with legal ramifications. Negotiating on one’s own, FSBO sellers will face not only the prospective buyer in their negotiation, but also the buyer’s agent, their real estate attorney, bank or mortgage, appraiser and home inspector. This is daunting even for the most seasoned business negotiator. Emotions run high, too, for FSBO sellers. Their home has been their castle, and so many will put sentimentality into negotiating for the sale of their home. Any skilled negotiator will tell you that this can be a fatal flaw to a successful negotiation. Even experienced real estate agents will often hire their own agent when selling their own home, just for this reason. Skill wins over emotion every time in a deal. Having a real estate agent handling the negotiations sets your home sale up for its best possible outcome. Real estate agents can also distinguish immediately between serious buyers and those who are only kicking tires; this is a big time saver. Having a deep knowledge of the market your home is in will give you the best information from which to advise you on with making successful counteroffers.
The LawLet’s face it – selling a home is a legal transaction and so there are rules that vary by state and locale to do so. Some states don’t even let a home sale close unless there is a real estate attorney present. When you are selling your own home as a FSBO, it is especially critical to have an experienced real estate attorney involved so as to ensure that all necessary documentation has been properly completed, to avoid any future litigation. Without an attorney or agent involved, you as the FSBO seller, carry all the legal burden. Real estate agents know the legalities of listing and selling a home to closing and can help you in this. They can and will recommend real estate attorneys to you for the process as well to ensure that your home is free from any legal encumbrances. Removing chances for these types of legals burdens is the reason even seasoned real estate agents suggest bringing in real estate attorneys on selling a home.
The FinancialMost FBSO sellers choose to represent the sale of their own home initially due to the perceived savings vs paying a real estate agent commissions. But are these so-called savings real? Real estate agents do earn a commission as a percentage of the home’s sale price (usually between 4 – 6% for the Buyer and Seller Agents), but as we’ve already covered here, those fees cover the time and money that went into the agent selling the home. Realtors have active professional networks and online presences specific to real estate from which to feature your home, not to mention listing your home on the MLS, which is available only to agents. In addition, realtor sold homes, according to the National Association of Realtors, sell for a higher average price in a shorter amount of time than For Sale By Owner homes. FSBO sellers will have to find time away from work and family to properly list and successfully sell their home. They will also have added costs of all the items needed to ready a home for sale, and to market it effectively. For Sale By Owners still have to face paying agent commissions as a buyer’s agent will most likely seek their 3% commission from the sale for their services to your buyer. When you add up the costs of time to a For Sale By Owner seller and their family, along with all the expenses involved, it is easy to understand why many prospective FSBO sellers ultimately decide to list their homes with an agent.
INTERESTED IN WORKING WITH US?