Choosing to sell your home is a massive life decision that will have both personal and financial repercussions for years to come. When it comes time to sell, you have options … but one you should never select is the For-Sale-By-Owner route, commonly abbreviated as FSBO.
Why Do People Try ‘For Sale By Owner’?
Most homeowners retain a real estate agent to handle the sale of their home, but some people decide to take the situation into their own hands and attempt an FSBO transaction without the assistance of a Realtor. The obvious advantage of an FSBO transaction is that you don’t have to pay a listing agent a three percent commission on the home (which amounts to thousands of dollars in equity).
But that’s about all the advantage to be had. Virtually no other perks come with selling without an agent, and we would strongly recommend you reconsider if you’ve thought about going that route.
Six Reasons You Should Never Sell Your House on Your Own
You’ve crunched the numbers, spoken with a couple of real estate friends, and believe that selling your house without an agent is a fine idea. But is it? When you dig into the specific details and take all factors into consideration, we think you’ll change your mind.
Here are six solid reasons you should never do a For Sale By Owner listing:
1. Lack of Expertise
What’s your profession? Maybe you’re a schoolteacher, engineer, police officer, small business owner, landscaper, or artist.
Whatever the case may be, you aren’t a real estate agent. Thus, while you may know a thing or two about properties and transactions, you don’t live and breathe it on a daily basis.
When you aren’t involved in real estate in a professional capacity, you lack the expertise and knowledge that support wise, strong decisions every time a challenging situation arises. You might make a good move every now and then, but that hardly supports the notion that you can depend on your street smarts in every deal.
Since the sale of a residence will be one of the biggest financial decisions of your life, it isn’t something you would want to enter blindly.
2. Time Consuming
Selling a home eats a lot of time, even when an agent is involved. You have to clean up the property, fix glaring issues, prepare for the move, and get all your financial ducks in a row. Selling a home FSBO makes those efforts even harder.
When you represent yourself, you have to create listings on various websites, spend time showing the property, field phone calls from “door-kickers,” talk with other agents (many of whom won’t take you seriously), handle negotiations, schedule repairs, and inspections, dealing with contracts and addendums, and so on. There’s a reason listing agents get paid well: The job takes time as well as expertise!
According to data collected by the National Association of Realtors, the average FSBO sales price was $185,000 in 2016, while the average price for an agent-listed home was $245,000. That’s a substantial $60,000 difference.
A number of factors may be cited for that gap, but a lot of it comes down to the fact that most homeowners don’t know how to negotiate effectively. This results in their leaving money on the table and putting themselves at the mercy of the buyer.
So while you might think you’re saving money by going the FSBO route, more likely it will cost you a lot on the back end.
4. Marketplace Perception
“The perception of FSBO sellers is that they are not serious about selling their properties and are often just testing the market or seeing if they can get some far-fetched price or perfect buyer that isn’t realistic,” UpNest explains. “They are often not taken seriously in the real estate community because they don’t see the value in representation by an agent or broker.”
Right or wrong, a stigma attaches to FSBO homes. Buyers’ agents will often advise their clients to stay away from this type of transaction since many of them go nowhere. Even if you are serious about selling your home, this negative image will limit the offers you receive.
5. Lack of Marketing
Did you know that only 9 percent of homebuyers find their eventual property by driving on a search for signs? The vast majority learn about listings via the Internet, or with the assistance of their agent’s MLS system.
When you sell a home on your own, you don’t have the opportunity to list it in the MLS system. You can put it on a site like Zillow, but you won’t get nearly the same exposure. This hurts your ability to market your listing and attract traffic to the property.
Selling a home isn’t like putting a piece of furniture on Craigslist. Because of what’s at stake, lots of legal issues must be sorted through before ownership can transfer.
When you sell your home with an agent, he or she will carry something known as E&O Insurance, which covers any potential errors or omissions the agent might make. This gives you an additional layer of protection.
But when you sell a home on your own, you have no such firewall. If an undisclosed issue emerges later, it could lead to legal problems.
Let Green Residential Sell Your Home
When you choose to work with Green Residential on the sale of your home, you get the best of both worlds. Not only do you get an experienced listing agent to provide all the professional services you’ll need to sell your home, but you also don’t have to give up a ton of equity when the house sells.
Instead of charging the traditional 3 percent that a Houston real estate agent commands, we operate on a flat fee. On the sale of a $400,000 home, this could save you as much as $4,000.
For additional information on how you can work with us on the sale of your home, please don’t hesitate to reach out and contact us today!