When preparing to sell a home, one question that sellers sometimes ask themselves is “Should I try to sell my home myself?” The main reason that sellers consider this option is to save money. They feel that by going it alone they will save the commissions that real estate professionals earn when they successfully close a transaction.
Some of the complications that FSBO’s (For Sale By Owners) have to face that they often don’t consider:
1.) How do I market my house.
(Place an ad on the internet, put it on the FSBO website, Yard sign, Newspaper, Open House). These are all out-of-pocket expenses that have varying degrees of success. Realtors use these and provide marketing as part of their service package – at no expense to the seller. They also have a much broader network of advertising than a For Sale By Owner does.
2.) What should I price my house at?
Performing a market analysis on one’s own home can be complicated, time consuming and inaccurate. To get an appraisal can be upwards of $350 making pricing costly and complicated. Realtors provide expert analysis and pricing advice as part of their service – again at no cost to the seller.
3.) What do I need to do to get my house ready to sell?
Not all improvements are necessary for preparing a home for sale, and may be an expense that will not translate on the sales price. Sometimes it’s hard for buyers to take an objective look at their own property. Lastly, de-cluttering and staging one’s house can take time, effort, and know-how that the seller may not have. Realtors are a storehouse of knowledge when it comes to getting a house ready to sell. Through their experiences they know what is worth doing or and what is not. Realtors have lots of ideas as to what will make the house most appealing to buyers.
4.) How do I pre-qualify/ pre-screen buyers?
It’s complicated and perhaps even a safety issue as a FSBO to show the house to anybody who is interested. How do you know who the person is and are they pre-qualified to buy it, or are they just wasting your time? Realtors work hand-in-hand with their buyers and the buyer’s lenders to make sure they are looking at homes that fit the buyer’s financial situation. Also the Realtors are responsible for anyone who enters the house and can provide safety and security measures to make sure only well-intentioned people are let into the house.
5.) Do I have the time to sell my home myself?
To do all the fixes, de-cluttering, and cleanup takes long enough as it is. FSBO’s also have to (1) try to determine the right price for their house, and constantly keep an eye on the market and adjust the price accordingly. (2) Do all the marketing for the property and keep it in the public’s eye. (3) Perform Open Houses to draw attention and buyers to the home. (4) Pre-qualify all interested buyers, and make sure anyone that wants to enter their house is a legitimate buyer. (5) Take the time to show the house at all times of the day to anyone interested. (6) Learn about the legal contracts and disclosures required, and then navigate and control the transaction through the title company, inspectors, appraisers, lenders, & negotiations. Realtors provide all the support and guidance and expertise to smoothly sail through all aspects of the selling process.
The following statistics on FSBO’s are from the sales studies of sellers performed by the National Association of Realtors. In the early 1990’s 19% of home sales were FSBO. Currently that figure is under 10%. The latest figures show that the average sales price for FSBO’s is just under $150,000 and the average sales price for Realtors is over $200,000. 80-90% of all FSBO’s sign with Realtors eventually because of the complications and difficulties discussed above. Over 50% of successful FSBO’s said they would definitely use a Realtor the next time.
The bottom line is: find a Realtor that you trust and feel comfortable working with and hire them to represent you. This will save you time, money and stress!
By Mike Farrell