Some homeowners may consider trying to sell their home without the assistance of a real estate professional, known in the industry as a For Sale by Owner (FSBO). Here are 5 reasons this might not be a good idea for the vast majority of sellers.
1. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO:
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interest of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies which work for the buyer and will almost always find some problems with the house
- The appraiser if there is a question of value
- Your bank in the case of a short sale
2. Exposure to Prospective Purchasers
Recent studies have shown that
- 92% of buyers search online for a home.
- 28% looking at print newspaper ads.
Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you? If the founder of www.fsbo.com could not sell his own home without an agent – and he tried – do you think you will be more successful than he was?
3. Actual Results also come from the Internet
Where do buyers find the home they actually purchased?
- 43% on the internet
- 9% from a yard sign
- 1% from newspapers
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
4. FSBOing has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.
5. You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the same commission.
National Association of Realtors FSBO Study
- FSBOs accounted for 7% of home sales in 2017. The typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales.
- FSBO methods used to market home:
Yard sign: 22%
Friends, relatives, or neighbors: 18%
Online classified advertisements: 6%
Open house: 10%
For-sale-by-owner websites: 5%
Social networking websites (e.g. Facebook, Twitter, etc.): 12%
Multiple Listing Service (MLS) website: 4%
Print newspaper advertisement: 2%
Direct mail (flyers, postcards, etc.): 2%
None: Did not actively market home: 49%
- Most difficult tasks for FSBO sellers:
- Getting the right price: 17%
Understanding and performing paperwork:
12%Selling within the planned length of time: 5%
Preparing/fixing up home for sale: 8%
Having enough time to devote to all aspects of the sale: 3%
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.