7 Pitfalls of Selling Without a REALTOR®
In today’s market, with homes selling quickly and prices rising some homeowners might consider trying to sell their home on their own. In the industry, this is referred to as a For Sale by Owner, or “FSBO”. While being a FSBO might seem to have its advantages, there are reasons why nearly 9 of every 10 homes are still sold with the help of a REALTOR®.
If you are thinking of selling your home on your own, first consider these challenges you will face by not using a REALTOR.
1. Setting the right price
Overpriced homes don’t sell. On the other hand, no seller wants to risk underpricing their home. FSBOs frequently misjudge the value of their home, basing their pricing decisions on inaccurate information they find online or the common misconceptions about the current state of home prices and the overall real estate market. REALTORS® have the expertise, knowledge, and resources to help sellers choose the best price for their home.
2. Being available for showings
Are you going to be available on short notice to show your home to prospective buyers? Your job, family, and personal life can make for a very busy schedule. This makes it very unrealistic for many of us to simply drop what we are doing and rush home to meet buyers for a showing. One of the roles of a REALTOR is to take the demands away from sellers and be there to represent your house any time a buyer wants to see it.
3. There’s more to negotiating than you may think
Negotiation is a normal part of any real estate transaction, but many FSBOs do not consider all the different people they must be prepared to negotiate with, including:
- The buyer who wants the best deal possible for themselves.
- The buyer’s agent who solely represents the best interest of the buyer.
- The home inspector(s) who works for the buyer, not the seller, and will almost always find some problems with the property.
- The appraiser if there is a question of home’s value.
4. Exposure to prospective buyers
The days of considering a good marketing plan to be a sign in the front yard and some flyers are long gone. Studies have shown that out of 10 buyers 9 use the Internet to search for homes while just 2 are looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
5. Results come from the Internet
How do we know the Internet is an effective marketing tool? Because it generates real results! A recent study from the National Association of Realtors showed 43% of buyers found the home they actually purchased on the Internet. That is in comparison to only 9% from a yard sign and 1% from a newspaper. Having a strong Internet strategy when selling your home is crucial.
6. FSBOing is not what it used to be, the process today is difficult and complex
Over the years more and more requirements have been set in place and the paperwork involved in selling and buying a home has increased dramatically as industry disclosures and procedures have become mandatory. This has made the process of real estate transactions a complex one, giving reason for why we have seen a drop in FSBOs from 19% to 9% in the past two decades. If you are thinking of not using a REALTOR to sell your home, ask yourself, how familiar are you with reviewing contracts and negotiating contingencies?
7. Using an agent will net you more money
Many homeowners are drawn to try selling on their own because they believe they will save the real estate commission. However what they don’t realize is that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. In reality, the seller and buyer can’t both save the commission.
Studies have shown that the typical FBSO home sells for $208,000 while the typical house sold by an agent sells for $235,000. FSBOs are more common in lower price point markets so this doesn’t mean that an agent can get $27,000 more for your home. However, it does show that selling on your own might not make sense.
Before making the decision to try selling your home on your own, contact a REALTOR in your area and see what they have to offer.