When selling a house, you will have two options to choose from – either sell with the assistance of a real estate agent, or sell it on your own as a ‘For Sale by Owner’ (FSBO) property.
Many sellers think that selling their home as a FSBO property is better and less costly than using a realtor since they save the agent’s commission. But is that really the case? Here are 6 factors to consider before making that decision. Selling your home on your own could prove to be less rewarding than you think.
Your Home Will Probably Sell for Less
Chances are very high that when doing your property valuation you will either overprice or underprice due to lack of access to the latest information in the local real estate market. A real estate agent on the other hand, will have all the necessary information to give a valuation that will fetch the best price.
Additionally, they can give ideas and recommendations for things you can do to add to the value of your home. They are also well-versed in contract terminology, and have better negotiation skills, so you are assured you will be getting the best possible deal.
The Property Stays on the Market Longer
Despite how much money that can be saved when selling a FSBO home, few people choose this option. In most cases home owners do not have the needed marketing expertise to get people interested in the house, and all the marketing that will be done is a ‘For Sale’ sign on the front of the house. The result will be that your house will remain in the market longer. This fact alone makes buyers feel there’s something wrong with your home.
Additionally, real estate magazines and websites do not list FSBO listings and since almost 90% of buyers search online, getting interested buyers will be an uphill task.
You are Basically on Your Own
Even after the contract is signed, an experienced real estate agent will remain in contact with the parties involved until everything is closed. They will be in touch with the homeowner, legal counsel, and buyer, helping to make sure all the critical details are completed. Taking the FSBO route means you will have to do all the work yourself, which could prove to be a tough task. Why risk missing a crucial detail that could cost you thousands?
Additionally, you do not have current sales data as a realtor does, so you may not know what factors affect the selling price of property in your area. Without this information, you’ll be groping in the dark.
The Paperwork is Cumbersome
Another thing to consider when choosing which option to go with is the paperwork required to legally sell a house. When you factor in all the inspections, disclosures, and other regulations you will realize that the amount of paperwork and complexity has increased dramatically over the last several years. When selling your home, you will not be exempted from these regulations so you will have to learn on your own. This is one of the biggest reasons why the number of “For Sale By Owner” homes has been on a constant decline for many years.
Needs a Lot of Time Investment
One of the biggest costs you should expect to incur when selling your property is time. It may be argued that agents do not take much time to get a house sold, but that’s not true. Everything seems very simple until you have to do it yourself.
Remember that you do not have the same experience and amount of resources that the agent has at their disposal. The best question to ask is how much is your time worth? Can you sacrifice enough time to do the market research? Are you going to leave work every time there is a showing?
Negotiations Can Be Difficult
When selling your home you are bound to go through a number of negotiations. You will be negotiating with the professional real estate agent of your prospective buyer. Without proper negotiation skills it is very easy to get undercut and end up selling your home at too low a price. Having someone like a real estate agent with plenty of negotiating experience will definitely be a plus for you. They can help guide the negotiations because they know what is worth giving up, and what is worth fighting for.
There is a lot of work that goes into selling a home, and without proper experience and the right connections there is a lot that can go wrong. In most cases hiring a real estate agent to help sell your home will get you more money in the bank after deducting their commission because they can sell the property at a better price that you can.