6 Pitfalls to Selling Your Home on Your Own – aka FSBO

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There are lots of benefits to working with a Realtor® when selling your house. Given everything going on right now it has become even more important to have a trusted expert to help guide you through the process. If you have been thinking selling your home on your own, which is known as a For Sale By Owner or FSBO in the real estate industry here are a few things to consider:

1. Your Safety Is a Top Priority

With everything going on your family’s safety comes first. When you sell your home on your own it is difficult to control entry into your home. Your trusted local real estate expert has the proper protocols in place to protect not only your belongings, but your family’s health and well-being too. From regulating the number of people who are allowed to enter your home at one time to ensuring proper sanitization during and after a showing, as well as facilitating virtual tours for buyers to preview the property prior to scheduling an in person appointment, agents are equipped to follow the latest industry standards recommended by the National Association of Realtors (NAR) in order to help protect you and your family.

2. A Powerful Online Strategy Is a Must to Attract a Buyer

The internet has quickly become the go to place to search for everything you are looking to purchase and that’s true for buyers looking for a home. Even before COVID-19 and stay at home orders, the first step 44% of all buyers took when looking for a home was to search online. With stay at home orders in place, that number jumped to 93%. This is why great real estate agents  have developed a strong Internet and social media strategy to promote the sale of your house. Have you?

3. There Are Too Many Negotiations

Often sellers who choose to sell their home on their own do not realize how many negotiations are involved in the process.  Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who solely represents the best interest of the buyer & is there to make sure the buyer gets the best deal possible
  • The inspection companies, which work for the buyer and will almost always find items with the house that the buyer will ask to have fixed
  • The appraiser, who works for the buyers lender, and if there is a question of value another negotiation will ensue with the buyer and their agent

One of the facets of training that real estate agents go through is how to negotiate every aspect of a real estate transaction, as well as how to mediate the emotions felt by buyers who are preparing to make the largest purchase of their lives.

4. You Won’t Know if Your Purchaser Is Qualified for a Mortgage

Having a buyer who wants to purchase your house is just the first step. Making sure they can afford to buy it is just as essential. As a FSBO, it can be almost impossible to be involved in the mortgage process of your buyer. Your local real estate expert is trained to ask the appropriate questions and, in most cases, is aware of the progress that’s being made toward a purchaser’s mortgage commitment.

Now add in the fact that the current mortgage market is changing on a daily basis due to the number of families out of work and in forbearance you may find yourself with a buyer who has a loan program that is now gone.  Meaning they can no longer afford to purchase your home.  Real Estate agents work with lenders every day to make sure that your buyer makes it to closing.

5. FSBOing Has Become More Difficult from a Legal Standpoint

There is a lot of documentation  involved in the selling process and it has increased dramatically as more and more disclosures and regulations have become mandatory. In a society that likes to sue, the agent acts as a third-party to help the seller avoid legal jeopardy. Legal issues are one of the major reasons why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

6. You Net More Money When Using an Agent

I know that lots of  homeowners believe they’ll save the real estate commission by selling on their own. Realize that 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.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by not using agent. In some cases, the seller may even net less money from the sale than they would have if they had used an agent. The study found the difference in price between a FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance a bidding war will take place.

As you can see listing on your own leaves you to manage the entire transaction on your own, which can quickly become a full time job for you.  So if you can still net the same amount of money why not hire an agent?  Before you decide to sell your home on your own give me a call so we can discuss your options.  I promise no pressure, no sales tactics just the help and guidance you need.