“For sale by owner” (FSBO) is presented as a great way to save thousands of dollars when you sell your home. The standard real-estate agent’s commission is 6% – that’s $15,000 on a $250,000 home. Even after cutting that savings in half so you can pay the buyer’s agent, acting as your own seller’s agent will surely be worth the savings, you think! Here are eight reasons why you should think again-
- Buyers’ agents may not want to show your property to their clients.
In a for-sale-by-owner deal, the buyer’s agent knows there won’t be a professional on the other end of the transaction, which can mean numerous headaches. Even if a client insists on seeing your home, the agent might discourage making an offer, ignoring the hassles and risks of trying to close the deal without a professional representing the seller. If an agent shows FSBO property its most likely for these two reasons – the is no other inventory available or the price is ridiculously low. With that said, buyer who is looking to buy FSBO is most likely bargain shopping.
- Agents have a larger network than you do.
Yes, you can list your home yourself on Zillow, Redfin, Craigslist and even the Multiple Listing Service (MLS) that agents use. But will that be enough? Even if you have a large personal or professional network, those people will likely have little interest in spreading the word that your house is for sale. You don’t have relationships with clients, other agents or a real-estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers means less demand for your property, which can translate to waiting longer to sell your home and possibly not getting as much money as your house is worth. The more exposure, the bigger is the potential to get multiple offers, which means that most likely you will get offers above the list price. Research shows that only 8% of buyer’s shop for sale by owner and sellers who use listing agents are actually seeing final sales prices that are up to 11% higher than those who go “for sale by owner” route.
- Selling homes is not your full time job.
Can you rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? At the end of a long work day, do you have the energy to take advantage of every possible opportunity to market your home? Are you an expert in selling homes? Do you have any experience doing so? Your answer to all of these questions is probably “no.” An agent’s answer to all of these questions is “yes.” In addition, by going through an agent, you’ll get a lockbox for your front door that allows agents to show your home even when you aren’t available.
4.Negotiating the sale is tricky and awkward.
Even if you have sales experience, you don’t have specialized experience negotiating a home sale. The buyer’s agent does, so he/she is more likely to win the negotiation, meaning less money in your pocket.
Not only are you inexperienced, but you’re also likely to be emotional about the process, and without your own agent to point out when you’re being irrational, you’re more likely to make poor decisions. An agent can turn an emotionally charged, inappropriate response from an offended seller to a buyer into, “The seller has declined your initial request, but has made the following counteroffer.”
Sellers who go solo also typically aren’t familiar with local customs or market conditions.
Agents know the pulse of the market and what’s driving demand, which gives them an advantage by knowing what terms are worth negotiating for and which are worth letting the other party win.
And agents know the local customs for selling a home, such as whether the buyer or the seller typically pays fees such as transfer taxes and closing costs.
- You subject yourself to needless showings.
An agent can find out whether someone who wants to view your house is really a qualified buyer or just a dreamer or curious neighbor. It’s a lot of work and a major interruption every time you have to put your life on hold, make your house look perfect and show your home. You want to limit those hassles to the showings most likely to result in a sale.
Realtors are trained to ask qualifying questions to determine the seriousness, qualification and motivation of a prospect. Realtors are also trained to ask closing questions about how long buyers have been looking, whether they’ve seen any other homes that would work for their needs, if they are paying cash or have been prequalified, what schools they are looking for and so on, and can move a qualified and motivated person to the point of purchase.
It’s also awkward for buyers to have the seller present, rather than the seller’s agent when they’re touring the home.
When showing a house, the owner should never be present, nothing makes a potential buyer more uncomfortable than the current owner being in the house. When a seller is present, most buyers will rush through a house and won’t notice or remember much about what they saw.
- It’s difficult to keep your emotions out of the sale.
Selling your home is typically an emotional process. Having an agent keeps you one step removed and makes you less likely to make stupid mistakes such as overpricing your home, refusing to counter a low offer because you’re offended or giving in too easily when you have a deadline for selling your home. The emotions will always be there for the seller, but constructive criticism can become easier to digest for the seller when it comes from a real estate agent who is on their side, trying to get the best for them.
- You can’t see what’s wrong with your home.
Agents are experts in what makes homes sell. They can walk through your home with you and point out changes you need to make to attract buyers and get the best offers. They can see flaws you’re oblivious to because you see them every day – or because you simply don’t view them as flaws. They can also help you determine which feedback from potential buyers you should act on after you put your home on the market to improve its chances of selling.
- You put yourself at risk of being sued.
A lot of legal paperwork is involved in a home sale, and it needs to be completed correctly by an expert. One of the most important items is the seller’s disclosures. A seller of real estate has an affirmative duty to disclose any fact that materially affects the value or desirability of the property. The seller can be held liable for fraud, negligence or breach of contract if he/she does not disclose properly.
Unless you’re a real-estate attorney, your agent probably knows more about disclosure laws than you do. If you fail to disclose a hazard, nuisance or defect and the buyer comes back to you after they’ve moved in and found a problem, they could sue you. Agents can make mistakes, too, but they have professional errors-and-omissions insurance to protect themselves and to give the buyer recourse so the buyer may not need to pursue the seller for damages.