Are you thinking of selling your home yourself (also known as “for sale by owner” or FSBO) because you think it will save you a lot of money? It’s no secret that the standard real estate agent’s commission is typically 5% to 6%, which really adds up depending on the price of the home you want to buy. With that in mind, you might be thinking that acting as your own seller’s agent will be worth the savings. However, before you go the for sale by owner route, there are a few reasons why you might want to reconsider.
Things You Should Know Before You Sell Your House For Sale By Owner
Here are the highlights of things you should know before choosing FSBO. First, while it might be tempting, the risks of going it alone outweigh the benefits.
These risks include not finding qualified buyers, not knowing how to negotiate properly, not having enough free time to facilitate the sale, and potentially making emotional rather than logical decisions. The most significant risk of choosing “for sale by owner” is not having the experience or expertise to navigate all the requirements (both legal and regulatory) that come with selling a home.
Now that you know the risks let’s dive into what FSBO entails.
What Is For Sale by Owner, Exactly?
In the real estate world, For Sale By Owner (FSBO, pronounced “fizbo”) is when a house owner sells their home without any representation from a real estate agent.
Most home sellers decide FSBO isn’t worth it because of the hassle alone — and they find that they end up getting a worse deal on their home than if they had used a realtor. Most people who choose the FSBO route sell their homes at 11% less than those with an agent.
Real Estate Is a Full-Time Job
Think about these questions: Can you rush home from work when someone wants to see your home? Is it possible for you to answer your phone every time it rings with a potential buyer? Do you have the time or energy to market your home at every available opportunity consistently?
If you’re feeling overwhelmed just thinking about that, it might be time to hire an agent. A real estate agent is passionate about getting your home sold for the best price, so you can sit back and relax and let them do the hard work for you.
Real Estate Agents Have Large Networks
Sure, there are websites and networks you can list your home on like Zillow, Redfin, Craiglist, and the MLS, but is simply posting a listing enough? Real estate agents have a vast pool of people they can spread the word to so that you can get your home sold faster. Even if you think you have many friends and family, will they go the extra mile for you to make sure more people see your home?
A small network means less demand for your property, which means longer waiting periods and not getting as much money as your home is worth. An excellent real estate team will likely already have a collection of buyers who are looking for precisely what your house has!
Realtors May Not Show a “For Sale By Owner” Home
Though not true of all brokerages, some agents know that in an FSBO deal, there isn’t a professional colleague who knows what they are doing on the other end of the transaction. As a result, agents representing buyers might discourage their clients from making an offer because of the hassles and risks of trying to close the deal without a professional agent (and without a guaranteed commission!).
If you really want to be taken seriously by seller’s agents, avoid any hiccups, or miss any critical steps, it’s better to use an agent who can help you manage the process.
Agents Avoid Emotional Sales
The sale of your home can become an emotional process. Having an agent removes you slightly from the process, so you don’t overprice your home or give in too quickly when you’re tired of waiting for the right offer. If you choose not to use an agent, you’ll also have to deal directly with rejection every time a buyer’s agent tells you that the client isn’t interested.
The right real estate agent can take the sting out of the rejection and positively spin any constructive criticism. Hiring an agent means you have someone on your side, facilitating the deal so that everything goes smoothly.
Real Estate Agents Weed Out Unqualified Buyers
When you use a real estate agent, they will be able to take the time to find out whether someone who wants to see your home for sale is a qualified buyer or simply a curious neighbor. It can be a significant interruption every time you have to put your life on hold, clean your home, and find the time for potential buyers to come over. An agent can limit those hassles and only show your home to those who actually want to buy.
Real estate agents are trained to ask the right questions to determine the buyer’s seriousness and make sure they are qualified. They also know how to determine how long buyers have been looking, whether they’ve seen any other homes, and more. As a result, a real estate agent will be able to move a qualified and motivated person to the point of purchase, while FSBO sellers lack this training and skill set.
Lastly, having the seller present can make showings a little uncomfortable. Most buyers rush through the house if the seller is present, and might feel awkward asking the questions they want to or going through the house the way they want to because of the watchful eyes of the seller.
The Bottom Line With For Sale By Owner
It’s a big deal to learn how to sell your house without the assistance of an agent. Selling your home is likely one of the most significant transactions you’ll ever make. Though it’s true, that you might save a few dollars, we think that hiring an agent has a lot more advantages. The right real estate agent will get you more exposure and negotiate a better deal on your behalf, but real estate is what they do, day in and day out. They can make certain complex transactions go smoothly, with a few potential financial and legal pitfalls as possible. Are you in the market to sell? 41 Realty Group wants to help! Set up a consultation with us and show us why hiring an agent is a great idea (especially in this crazy market!).