For every success story you may have heard about people deciding on “for sale by owner” for their home, there are countless other stories you don’t hear, all about the many issues that can arise when going down this route.
When you try “for sale by owner,” (we’ll shorten it to FSBO), you give up the helping hand of a real estate agent. During a real estate transaction, an agent can be a vital partner, one who knows the ins-and-outs of the housing market and all that goes into selling a property, including marketing efforts, negotiation strategies, and navigating the oftentimes lengthy closing process.
If you’ve done FSBO in the past, it may be worthwhile to investigate the current realities of selling a home without a real estate agent.
According to the Chicago Tribune, 20 years ago for FSBO-sold homes accounted for nearly 20% of transactions. In contrast, in 2017, 92% of home sellers were assisted by a real estate agent.
So, what do these people know?
Here are three big things to keep in mind before you attempt to sell a home all alone…
1.) Pricing Your Property Incorrectly
Though you might think that choosing to forego a real estate agent’s service could save you money on upfront fees, bear in mind that you could actually lose an even greater sum of money when it comes to pricing your home.
Thinking about home renovations that you’ve completed over the years, large and small, can trigger the “isn’t my house worth $X because I put $Y into that one project?” response. It’s common to believe your house is worth more than it actually is in current market conditions.
Using online tools to price your home or going off of word of mouth from neighbors down the street can be difficult way to price your home. Without a professional to compare home values around the neighborhood, and trends around the area more broadly, choosing the right price to list your home at can be extremely tricky.
And data shows that finding the right price from the beginning really matters. Pricing too high could mean that your home sits on the market longer than you want, which could also turn off potential buyers - all while adding to your budget in carrying costs and other unexpected fees. Price too low, and you’re not getting the advantageous sale that you might have hoped for.
Here’s one more thing to consider: A recent study of hundreds of thousands of FSBO transactions revealed that, on average, FSBO listings sold for about 5.5% less than comparable properties sold through the MLS with the help of an agent.
2.) Marketing Your Home Can Be Tricky
Most real estate agent pros have tried-and-true plans to expose homes to the right audience of buyers. Experienced agents have current and former clientele that are kept up-to-date on new listings that go on the market, plus a network of professional contacts throughout the area.
Without the help of a pro, online and print marketing campaigns for selling a home can be complex, and difficult to do right. And that’s not to mention how time-consuming it can be to tackle all of these things on your own!
For instance, consider what it might take to establish a strategic social media plan to put your listing out into the online market. Creating posts on multiple social media platforms can be a daunting task for any individual, due to the time commitment and frustration when your posts aren’t performing the way you intend.
Attempting to list your home through printed newspaper ads is a dying art form and won’t generate the same response as online-focused advertising. Currently 92% of buyers search online for a home while only 28% search for homes through print newspaper ads.
Crafting an online presence for listing your home also means taking professional-grade photographs and creating videos. A quick phone photo won’t do your home justice and can turn off buyers if they see a lack of professionalism in the images you use.
In all? An experienced real estate agent will know what strategies really work, and have the time and resources it takes to make marketing your home a top priority.
3.) The Many People Involved with Selling A Home
Going down the FSBO path means you’ll be left alone to deal with the negotiation process - and remember, negotiations go beyond conversations with the prospective buyer!
When selling a home, there’s an expansive list of people that you’ll need to prepare yourself to communicate with.
Beyond the potential buyer (and remember, there can be multiple!), selling a home means talking to the buyer’s agent, inspection companies, the appraiser, the bank if there’s a short sale, and even the buyer’s attorney in certain parts of the country.
The list can go on if additional problems are found with your listing including the title company if there are issues with permits including the certificates of occupancy (CO) and more.
It’s not only having the ability to effectively and professionally negotiate with this group of people and the many moving parts of a negotiation, but also making sure you have the time and resources to do so. Think phone calls, emails, and in-person meetings that can take up huge swaths of your time.
Ready to Talk to an Agent?
Selling your home doesn’t have to be a stress-inducing process, but when you choose FSBO, anxiety is almost all-but inevitable.
From negotiations to marketing your home online, FSBO, in our view, is no longer the easy way to sell your home.
If you’re debating whether or not to do FSBO, get in touch with Real Group RE to discuss the benefits of choosing an experienced real estate agent to sell your home! Whether you’re looking for a referral, a helping hand, a guide to your neighborhood market, or just a sounding board for your ideas, drop us a line today to get the conversation started!
