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July 27, 2015

'For sale by owner' vs. hiring a real estate agent

Do you really save money selling a home yourself?

Real Estate For Sale by Owner

Content sponsored by Anne Koons - Native 020715

For Sale by Owner Sign Outside of Home tab1962/iStock.com

Some homeowners assume they can save money by marketing their house by themselves, without the assistance of a licensed real estate professional. While this may seem like a cost-saving strategy in the short term, these homeowners often end up spending a lot more in the long run – in terms of money, time, inconvenience, and unforeseen surprises. Here are just a few of the many reasons why going the “For Sale By Owner” route – often abbreviated as FSBO -- may not be the best option.

Market Familiarity

Simply put, a qualified real estate professional’s experience is worth its weight in gold. Arriving at an appropriate asking price based on community comparables, so that you don’t waste weeks or months on the market at an unrealistic price. Shielding you from unqualified buyers who would otherwise waste your time trooping through your home. Doing the heavy lifting when it comes to negotiating an offer with a buyer who wants to play hardball. The list of services a real estate agent provides is a long one, and full of tasks that the FSBO seller must take on themselves. And many non-professionals are simply not up to the task.

Legal Issues

Real estate professionals are intimately familiar with all the local and state laws that govern residential transactions in your area. This is not a small thing – making mistakes in preparing paperwork, researching encumbrances, drafting contracts, understanding contingencies, and complying with disclosure laws on everything from mold to lead paint can cost you thousands -- and can even kill a sale.

Access 

Even the most determined FSBO seller’s marketing efforts generally can’t match the reach of a professional real estate agent. Sure, real estate websites have made the mechanics of publicizing a home for sale easier. But when you choose to go it alone, you’re missing out on access to the established network of would-be buyers that most real estate professionals are already working with. And obviously, a larger universe of buyers means the likelihood of more demand for your home. A real estate agent’s relationships and contact-list are priceless assets to sellers that they forego when they opt for FSBO.

Negative Incentive for Buyers

The fact is, there are buyers’ agents out there who avoid showing FSBO homes to their clients simply because they know that, without a seller’s agent involved in the deal, it’s going to be more work for him or her. Many agents have been burned by having to deal with FSBO sellers who are amateurish, unprofessional and unrealistic. And remember, even if a buyer’s agent does want to work with you on a FSBO deal, he or she is working for his client – the buyer – not for you.

Dedication & Objectivity

In hot or not-so-hot real estate markets alike, selling your home is a full-time job, and most sellers already have a job! When you engage a real estate agent, he or she is fully invested in selling your home – 24/7 – to a degree that, with most sellers’ personal and career obligations, they never can be. As a FSBO seller, you’re on-call around-the-clock. On top of that, a real estate agent can be objective about your house in a way that, as the owner, you can’t be – helping to point out flaws that can be corrected, advising you how best to stage your home, etc.

The Statistics

Numerous studies have been conducted, by sources ranging from USA TODAY to the National Association of Realtors®, on whether it pays to hire a real estate agent, and the results suggest the answer is yes.  In fact, the average FSBO home sold for $190,000 in in 2016 while homes sold with the assistance of a real estate agent averaged $249,000. 

None of this is to say that selling your home yourself is impossible. If you have a firm sense of your home’s value, feel prepared to work directly with a buyer’s agent, are comfortable performing all sales and marketing tasks, have the time and savvy to screen would-be buyers, and are immune to the inevitable criticism of your home that comes from buyers, FSBO isn’t out of the question. However, be aware that the deal you strike will not necessarily be easier or more profitable.