Everyone has a bit of a DIY streak, and this can also be applied to selling your home. While hiring an agent has its fair share of pros and cons, there’s a lot to be said about selling your home on your own. Certain circumstances may indeed favor FSBO (for sale by owner), and while it’s not for everyone, if you’re thinking about it, it’s worth knowing the pros and cons of going it alone before diving in.
Pros of FSBO
Choosing the For Sale by Owner approach to selling your home has its appeal, and it’s not just because of the savings it brings.
The average commission charged by real estate agents is 5%, which is typically paid by the seller. It may sound like a small percentage, but every homeowner looking to put their house on the market knows that’s several thousand dollars you’d prefer to keep in your pocket. As a result, FSBO is very attractive because you’re crossing off this expense right from the beginning. One detail to bear in mind, however, is that you will still be expected to pay the buyers’ agent commission.
More control of the sale
With FSBO you have the first and last say in terms of how you want the sale to go down. From the asking price to the way your home will be advertised, which buyers to show it to, and even potential negotiations, you are in control of the sale.
You know your home
Most real estate agents aren’t selling just one home at a time. This means that your home is on a list with several other properties that are part of the agent’s portfolio, and it can sometimes become a blur. As an FSBO seller, you know exactly what the strengths of your house are, and how to showcase them in front of your potential buyer. Not only that, but as someone who has lived in the house and neighborhood for a long time, you can use your knowledge to help buyers envision their lives in their future home.
You can take your time
For real estate agents, time is money, and the sooner they can see you and the buyer shake hands on the deal, the sooner they can move on to the next listing on their agenda. This approach may not work for every seller though, so if you’re going down the FSBO route, you can do things at your own pace. You can take your time with last-minute decorations, and even arrange showings based on your own schedule, as opposed to being rushed by the agent calling you half an hour in advance.
Cons of FSBO
Being left to your own devices when it comes to the sale sounds great, but there’s more to selling a home than just putting up a listing and waiting for the calls to roll in. So let’s take a look at some of the cons of For Sale by Owner.
No professional help
Opting for FSBO means you are missing out on the exposure you would otherwise get if listing through the MLS (multiple listing services). For Sale by Owner websites do exist, but they get far less traffic than professional listing platforms. Not only that, but you also run the risk of failing to attract buyers, due to the fact that your listing’s photos and description aren’t appealing enough. On top of that, you will also have to handle all the paperwork and legal requirements, organize open houses, as well as screen your potential buyers to make sure that nothing is amiss.
Lack of real estate expertise
There’s a difference between knowing your home and knowing the market, and the most common mistake FSBO sellers make is overpricing their house. A real estate agent can help you with not only a correct assessment of how much your home should be listed for, but also protect you from buyers who will try to negotiate the price below its actual value.
Selling a home on your own will leave you to deal with inspectors, appraisers, and even the buyers’ agent. You might also find it difficult to determine whether a buyer can, in fact, qualify for the purchase. A mortgage letter is not enough to go by, and you might find yourself in the awkward position of having agreed to the sale, only to find out that the buyer does not actually qualify for a loan.
If you’re considering For Sale by Owner as a seller, it’s always best to remember that it’s practically a part-time job, as you are now fulfilling the role of a real estate agent. If you don’t have the time to advertise your home, show the buyers around, discuss the transaction details and deal with the ensuing paperwork, you might find it more trouble than it’s worth.
You might not close the deal
Say what you will about real estate agents, but it is in their best interest to see your home sold. FSBO can be more stressful and time-consuming for both sellers and buyers, and as a result, some buyers might be put off buying your home, and opt for the smooth sailing that comes with a real estate agent.
Sometimes, homeowners can display a lot of bias regarding their homes, and may not appreciate the buyers’ attitude or feedback, which can result in emotional involvement getting in the way of the sale. It’s also good to bear in mind that most buyers tend to associate FSBO with bargains, which means that you risk selling your home below what it’s worth, or even not selling it at all if the buyer is proving to be problematic.
FSBO can be a great way to sell your home to friends or family, or even outside buyers if you play your cards right. However, if marketing, advertising, real estate research and even time resources are not your strong points, perhaps it’s best to consider relying on the expertise of a real estate agent instead.