For Sale By Owner Not Good for Most
In today’s real estate market, with home prices rising and low inventory of homes for sale, some may consider selling their home without the expertise of an agent. This is know known as a For Sale by Owner (FSBO). There are several reasons why this may not be a good idea for most sellers.
1. Exposure to Prospective Buyers
Recent studies have shown that 88% of buyers search online for a home. By comparison, only 21% look at newspaper ads. Real estate agents have an robust internet strategy to market your home. Do you?
2. Homes Bought Come from the Internet
Where did buyers find the home they actually purchased?
- 44% found their home online
- 33% found their home through a Real Estate Agent
- 9% purchased a home from a yard sign
- 1% found their home through a newspaper ad
The days of selling your house by putting a sign in your yard and advertising in the paper are long gone. You need a strong internet presence.
3. There Are Many Entities to Negotiate With
A list of some of the people you must be prepared to negotiate if you decide to For Sale By Owner includes:
- The buyer who wants the best deal possible
- The buyer’s agent who represents the best interest of the buyer
- The home inspection company, which work for the buyer and will almost always find some problems with the house
- The appraiser and the buyer’s lender if there is a question of value
4. Selling Your Own House Has Become More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become burdensome. This is one of the main reasons the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest figure since the National Association of Realtors began collecting data in 1981.
5. You Net More Money When Using an Agent
Many homeowners believe they will save the real estate commission by selling on their own. However, the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission and get a better deal, i.e., a lower purchase price. Both sides of the transaction can’t save the commission.
Studies have shown the typical house sold by homeowners sells for $210,000, while a comparable house sold by an agent sells for $249,000.
Real Estate Bottom Line
Before you decide to take on the challenges of selling your own house, let’s talk about your particular situation. You could net more money by NOT selling on your own.