Selling your home on your own may be an appealing idea at first. After all, real estate agents typically take up to seven percent of a home’s sale price. Offering your home for sale by owner (FSBO), however, may not save you money in the end. It will certainly take a lot of your time and energy, and it may actually cost you more. Here are five reasons FSBO is often a mistake.
Selling a home is time consuming.
It takes a lot of time and effort to sell a home. After you prepare your property for sale, you’ll need to market and show it, arrange for inspections, and complete a large pile of paperwork. Unless you’ve already identified a buyer, you can expect to show your home to many people before you find the right match and negotiate a sale. If you’re like most homeowners, you don’t have the time to do all of this and make sure it’s done right.
Agents have the knowledge and experience necessary to weed out buyers who aren’t serious or who don’t have the resources available to purchase your home. This allows them to focus their attention on qualified buyers who are most likely to make acceptable offers. This added efficiency can help you sell your home more quickly and with fewer disruptions to your life.
FSBO homes get less market exposure.
Real estate agents have professional connections and extensive contact lists at their disposal. Access to valuable tools like these allows them to get your home in front of more potential buyers than you, as a private homeowner, would be able to reach. No matter how much time and money you’re willing to put into marketing your property, you’re unlikely to match the exposure an agent can provide.
Not only does working with an agent give your property more exposure, but it also makes your home much more appealing to buyer’s agents. Many agents have been burned before in FSBO deals. They may have received less commission than promised (or none at all), and they generally perceive owner-sellers as difficult to work with due to their inexperience and emotional ties to the property. When you work with an agent, other agents will be more inclined to work with you.
Sales expertise is valueable.
Agents are experts at marketing homes, and they know how to make properties more appealing to buyers. An agent can arrange for professional photos that highlight your home’s best features. They’re also experts at staging homes for showing and promoting them to potential buyers. If you’re having trouble attracting interest, an agent can help you identify steps you can take to improve your home’s marketability.
Agents also keep up to date on current market conditions in your area. This knowledge is essential to negotiating the best price for your home, as is knowing what kinds of concessions might be appropriate to make in order to motivate buyers. Recent research from the National Association of Realtors found that the median sales price of FSBO homes is approximately 10% less than homes sold with agent assistance.
In an FSBO sale, you carry the risk of error.
It’s common for FSBO sellers to make mistakes that arise from their emotional connection to the sales process, and it’s only natural. Homeowners often overprice their homes or refuse to counter low offers because they find them personally offensive. On the other hand, if they are up against a sales deadline, they can be quick to give in and accept a lower bid than they might get if they had held out a little longer.
In addition to errors in negotiation, you must be aware of legal and technical errors and the consequences they can carry. You may remember the stack of paperwork you signed when you purchased your home. If you sell it yourself, you’re responsible for making sure it’s all in order. Errors can leave you legally liable to the buyer, resulting in additional costs and headaches. Agents are familiar with all the documentation required in a home sale, and in case they make a mistake, they have errors and omissions insurance to cover it.
FSBO isn’t free.
Even with all the personal effort you’ll need to put into the process of selling your home on your own, you’ll still have significant costs. Inspections and appraisals are needed to make sure your home is in proper shape for sale and priced in the right range. You’ll also need to pay for signage, online listings, professional photos, and any other advertising tools you wish to use. You will also have costs associated with abstract and title work, and you’ll want an attorney to review and make any necessary adjustments to the sales contract. When you consider these direct costs in addition to the obstacles discussed above, FSBO becomes a much less attractive option.
There’s a better way to sell your home!
Even though FSBO is often a mistake, you don’t necessarily need to pay a percentage of your home’s price to an agent to sell your home right. Simply Better Realty uses a hybrid flat-rate pricing model, giving you access to a licensed and experienced real estate professionals and their valuable knowledge and tools at a much lower cost. You can save money on your home sale and get professional guidance, too.
