In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Here are the top five reasons:
1. Exposure to Prospective Buyers
Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
- 97% of home buyers searched online for a home
- 88% used a Real Estate Agent
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.
3. 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 For Sale By Owner:
- 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
4. FSBO 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 homes has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.
5. You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by FSBO their home. The main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the FSBO homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home, as studies have shown that people are more likely to FSBO a home in markets with lower price points. However, it does show that selling your own home might not make sense.
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.
I recently wrote an ebook titled FSBO IT: A Broker’s Guide to Selling Your Own Home. It offers a complete step-by-step guide to help the do it yourself home owner become a do it yourself home seller. Grab your copy here.
The author, Rick Sheppard, is a licensed real estate broker with RE/MAX Achievers, Inc in Pennsylvania and a 32+ year veteran of the real estate trenches. He knows a lot because he’s seen a lot. If you have any questions about this or any real estate related topic, feel free to contact Rick at [email protected] and he’ll do his best to answer your questions.