Should I Market And Sell My Home Alone?
Some Thoughts On For Sale By Owner Properties
Homes for sale by owner, or FSBO as they are known, are commonly seen in seller's markets or whenever homeowners want to try and eliminate paying a commission to sell their home. A home sale by owner option sounds like it could be a good option for a seller that wants to do all the work of selling the home and wants to put more money in their pocket, but is that what actually happens? Let's take a look.
Many buyers will not call or pursue FSBO properties since buyers often prefer not to deal with homeowners directly and prefer to work with an agent. In 2019 88% of buyers used an agent to purchase their home. This results in many FSBO properties never being looked at and getting passed over as Buyers look at other homes that are being handled by a real estate professional. If buyers do call, you have to be prepared to respond immediately or you risk losing their interest to another home where an agent can get to them quickly. You also need to understand how to put the entire process together as real estate professionals do on a daily basis. If you have a job you may not be able to show your home when convenient for a buyer.
There are also statistics that show selling your home with the assistance of a professional real estate agent will help you obtain a higher profit, enough to cover the commission as well as put more money in your pocket. According to the National Association of Realtor®'s 2016 Profile of Home Buyers and Sellers, the average FSBO sales price was $185,000, while the average price for a home represented by an agent was $245,000. That's a difference of $60,000!
Houses for sale by owner leave a seller to do everything: Determine a market value, advertising, handling calls, showing the property, handling offers and negotiating, working with attorneys, home inspectors and appraisers and lenders. You'll be relying on your own skills to finalize a contract, leaving yourself open to potential legal problems and a smaller profit when all is said and done.
Here are some of the top reasons why for sale by owner homes can cause major headaches.
Marketing your home online isn't easy
Buyers always start online, and "for sale by owner" sellers are unlikely to get the exposure they need on a number of listings websites to reach their audience. Sticking a sign in your yard or trying to pull off some DIY social media marketing hardly has the same effect. You also lose the networking and connections a good real estate professional will have.
How an agent can help: Using an agent automatically offers widespread exposure for your listing through the multiple listing service and other sources an experienced agent will use. Your real estate agent will also have the means to promote your house to fellow agents to share with their clients. FSBO sellers would have to shell out big bucks for advertising and still might not reach the most important audience.
Homes for sale by owner could be improperly priced
Those who put their homes on the market as FSBO tend to set a price based on an online assessment tool or the lofty sum that the neighbor down the street claims they were offered—two methods that are liable to put the listing price way off. Most online valuation tools are not very accurate. There is no substitute for an experienced agents knowledge of the market and your specific property. Some online valuation tools might undervalue the uniqueness of your property while some might overprice it. Overpricing tends to make a home sit for a longer period of time and that causes some buyers to assume there must be something wrong with the house if it isn't selling. Even lowering the price later can still make it hard to overcome the lost interest and time wasted initially. This can lead to offers being lower than they would have been had the home been priced properly from the start. How much does each extra mortgage payment cost you? Saving those payments can help cover a commission so you come out ahead.
How an agent can help: A good real estate agent will provide an accurate and unbiased home value based on a comprehensive market analysis to help you arrive at the right listing price. The goal is to make sure you’re pricing your home in the sweet spot—not too high so that you are turning off potential buyers, and not too low so you are leaving money on the table.
You could underestimate (or overestimate) how much money to spend on curb appeal and repairs
Home sellers get the benefit of staging and repair advice from an experienced agent. That advice can help the seller spend money in the right places where they will see the highest return and it will protect the seller from spending money unnecessarily. In some cases sellers believe they need to redo a kitchen or bathroom for example, two expensive areas, only to find the house can be properly priced to take that into consideration and help the seller come out ahead while not needing to front those costs or deal with the hassle of renovations.
How an agent can help: Your agent has an eye for detail and can recommend simple, budget-conscious swaps that can translate into real dollars when it comes negotiation time.
Showings are not always fun
FSBO sellers don’t realize how draining it can be to set up showings, many of which don't show up as promised. On top of scheduling actual potential buyers, you also have to deal with both looky-loos (gawkers with no intention of buying the house) and “sharks,” (investors looking to flip your house for a profit) and potentially criminals. Sellers who advertise their FSBO can be inundated with calls from real estate investors who are looking to save the same commission the seller hopes to save thereby not saving the seller what they thought. It is also common for a FSBO seller to believe they have lots of interest as a result of calls from buyers that are not qualified and cannot purchase the home. Real estate professionals know how to qualify and screen potential buyers to help ensure time is not wasted.
How an agent can help: Your agent will handle all the scheduling and staff the tours for you, so all you have to do is quickly tidy up and vacate. In fact, that is another key reason to have an agent: Buyers can get uncomfortable with a seller hanging around during the showing. Agents also will weed out unqualified offers and collect feedback that potential buyers might be unwilling to share directly with the seller, which can make subsequent showings even stronger.
Preparing your own paperwork can be tricky
Unless you have a background in contracts or real estate law, you might want to leave the paperwork to the pros. The closing process can entail more than 20 pages of complicated paperwork, including the contract and addendums designed to cover all of the situations that could go wrong. For example, houses built before 1978 require an addendum regarding lead-based paint and homes in subdivisions can require additional HOA disclosures.
How an agent can help: Your agent will take care of all property disclosures and corresponding documentation to avoid future liability. Don't open yourself up to potential lawsuits unnecessarily, let an agent help use industry proven contracts to limit your exposure and make the process easier.
If you would like to speak with one of our property experts, call or email us today via our contact form. We know how to make the experience a good one and look forward to helping you.
The Statesboro Properties Team