Are you considering selling your home For Sale By Owner (FSBO)? It CAN be done! But there are a few things you need to be aware of.
First, you should know the numbers. Only 7% of all home sales are typically FSBO. Even then half of those are sold to family and friends. So if you plan on selling to someone other than a friend or family member you can count yourself as one of the few 3.5% of home sellers that succeed as a FSBO.
Why don’t more people go FSBO? The truth is many do, at first. But eventually over 80% of them end up listing with a Realtor anyway. There are a lot of reasons for this. Some include:
Knowing how to properly price a home can be difficult for a few reasons. First, as the home owner you are naturally going to have a bias. A third party trained in pricing homes can benefit you because they can see the home from the view of potential buyers. Realtors also know that pricing high because you expect low offers is not the best strategy! Something few FSBOs know.
Aside from properly pricing and preparing the home for sale you have to consider marketing. While it’s easier than ever to use the internet to market your home it doesn’t compare to the reach a Realtor has. Over 87% of buyers use an agent.
An agent uses the MLS to find homes for their clients. You will not typically find them searching through sites like Zillow. This is because the MLS provides the agent with ALL available homes listed by EVERY agent. Since Zillow gets their information from the MLS as well why would the Realtor bother to go to them? The result is 87% of the potential buyers will never be shown that it is available by their Realtor.
If a buyer asks their Realtor specifically to show them a FSBO the Realtor will often (if they are smart) require a signed contract with you before they are willing to show the home. And, since that Realtor would end up working both sides of the deal you can expect them to require more than just the commission of a buyers agent. If you are not willing to work with an agent like this then you are still out that potential buyer.
This is the greatest reason (outside of not being able to price the home properly) that FSBOs fail. They simply do not have the networking ability to market their home to as many people that agents do.
Selling a home requires A LOT of red tape. There are a lot of legal issues you may run into on your own. You are going to need to know what disclosures need to be made and how. Selling a house isn’t like selling a car. You don’t just sign the bill of sale and hand over the keys. There are deadlines for certain actions, disclosures, and documentation to be filed. A Realtor can help you have a much smoother transaction since they already know what is needed.
Another thing to consider is how much time do you have to show the home? If you are not at home 24/7 then you may miss an opportunity for a buyer to view the home (and thus a missed sale). A Realtor can install a lockbox and give guided tours if you are home or not.
The biggest reason people try to do a FSBO is to save on the commission. A listing agent that charges 6% of the sale price does cost a lot! But considering homes sold by an agent typically sell for 12% higher than by owner that 6% becomes an EXTRA 6% in YOUR pocket.
So it may actually be a better idea to invest in having a Realtor list your home. The last thing you want to do is save 6% at the cost of losing 12%.
Now that you know these facts and numbers I invite you to see some of the common concerns people have about using a Realtor.
May 15, 2020 at 6:13 pm | Uncategorized | No comment