With today’s market, home prices, and a lack of inventory, homeowners may consider trying to sell their home independently, this is known in the industry as a For Sale by Owner or FSBO. There are several reasons why this might not be a good idea for FSBO sellers.
Reasons Not to Use FSBO:
Exposure to Prospective Buyers
The National Association of Realtors research reports shows year-over-year that the greatest majority of buyers search online for a home now. Little to nothing comes from newspaper ads. Real estate agents have an internet strategy to promote the sale of your home.
Who’s coming from the Internet
- 93% of all buyers looked online for properties and 65% of them walked through the home after viewing it online
- 87% contacted a real estate agent
- 72% Used a mobile or tablet device to search
- 12% Looked online for information about the home buying process
- 11% Looked in newspapers but <1% actually found the home they were looking for from a print newspaper advertisement
The millennial generation: buyers 22 to 29 years (Younger Millennials/Gen Yers) and buyers 30 to 39 years (Older Millennials/Gen Yers). Millennials still made up the largest share of home buyers at 38%: Older Millennials at 25% and Younger Millennials at 13% of the share of home buyers. Eighty-six percent of Younger Millennials and 52% of Older Millennials were first-time home buyers, more than other age groups. Buyers 40 to 54 (Gen Xers) consisted of 23% of recent home buyers. Buyers 55 to 64 (Younger Boomers) consisted of 18% of recent buyers and buyers 65 to 73 (Older Boomers) consisted of 15% of recent buyers. Buyers 74 to 94 (The Silent Generation) represented the smallest share of buyers at 6%.National Association of Realtors – Home Buyer and Seller Generational Trends
All generations of buyers continued to utilize a real estate agent or broker as their top resource to help them buy and sell their homes.
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.
You will have no choice but to negotiate
Be prepared to negotiate if you decide to do an FSBO. If you lack representation, you will find yourself up against equal or more skilled people than you. Be prepared. Here are some people you may need to work with.
- The Buyer – like you, wants the best deal possible, but this person may also be a con-artist looking to get your house for a steal.
- The Buyer’s Agent – This person may befriend you but make no mistake about it. They represent the best interest of the buyer.
- The Buyer’s Attorney – Attorneys are highly skilled in negotiation, and again this is someone who represents their client, not you!
- Home Inspectors – In most cases, they won’t speak to you at all unless you’re present when they inspect. These people also work for the buyer and will almost always find problems with your house.
- Appraiser – you may not have your house priced right, and if an appraiser comes in and says your house is thousands less than you thought it was, a real estate agent would have already pulled comps and proven to you the actual price before the appraisal.
FSBO Has Become More And More Difficult
It is this very thing that has caused a dramatic decrease in FSBO over the last 20+ years. If you get stuck signing on the dotted line and then realize an error, you may be left paying money to the buyer. Most FSBO’s don’t have Errors and Omissions insurance.
You Net More Money When Not Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. A person doing FSBO will not be able to avoid paying the Buyer’s agent commission when the buyer is using an agent.
Additionally, consider the money you will need to invest in marketing your home online, in a paper, etc. Do you really save much? If you are considering FSBO, call me today and ask me for a reduced commission.
A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more by not listing with an agent. One of the main reasons for the price difference at the time of sale is:
“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.”Collateral Analytics – Saving Real Estate Commissions at any price
Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?
Before you decide to take on the challenges of selling your house on your own, sit with a Heidi Tallos Real Estate Professional in your market to see what I have to offer. Also, check out my client reviews!
Bottom line, if you have any concerns over a For Sale by Owner situation, schedule some time with me, a real estate professional, and at least see what I can offer.