There’s usually only one reason why home sellers choose not to hire a real estate agent: they don’t want to pay money towards commission.
In their minds, they get to keep the money they otherwise would have paid for these services. But the truth is, there is a lot of value in these services, which cannot be performed properly without education and experience in the real estate business.
Before you choose to become a For Sale by Owner (FSBO), consider the following 6 reasons to think again.
1. It’s Extremely Time-Consuming
Selling your own home isn’t as easy as posting a few pics online to garner interest from prospective buyers. If you’ve ever sold anything online, you know that a certain amount of time is needed to get the item sold. Even selling something as small as your child’s bike on CraigsList can be time-consuming, between taking pictures, posting the listing, fielding calls, and showing the item before selling it.
When it comes to selling real estate, you can expect that time to be dramatically amplified. Getting your home ready to show, conducting all the prep work, being present to show the home at a moment’s notice, conducting follow-up calls, managing open houses and seeing the sale through can take up a huge chunk of time you might not be able to spare.
2. Pricing Your Home Properly is Difficult
Price is not arbitrary when it comes to establishing a listing price for your home. This is the most crucial component when selling. If you list the home at a price point that’s far too high, you risk scaring off potential buyers and wind up with a stale listing that gets no attention. On the other end of the spectrum, if you price the home too low, you stand to lose a good chunk of change.
Home owners have an emotional attachment to their properties, and usually think it’s worth more than the market dictates. A real estate agent with experience in pricing homes appropriately will understand your local real estate market, and will know how to price your home according to its specifications. These experts are skilled at finding the sweet spot when it comes to establishing a listing price that will attract buyers while bringing in as much money for you as possible.
3. The Paperwork Involved is Complicated
When it comes to buying and selling property, disclosures and regulations have become more involved and complicated. As such, the associated paperwork involved in the industry has increased. This paperwork is not only lengthy, but it’s also complex, which is enough to convince anyone to leave it to the experts to deal with instead. In fact, the number of home owners going the FSBO route has dropped significantly over the past couple of decades – from 19% to 9%.
4. There Are Too Many Parties to Negotiate With
Selling your home is a huge business transaction involving negotiations with a number of parties. Obviously, one major party you’ll be negotiating with is the buyer. And your negotiations will probably be more involved than just a simple acceptance of the initial offer. Most likely, there will be at least one counter offer, then a post-offer period that will involve inspections and requests for adjustments.
In addition to the buyer, other people will also have to be negotiated with, including the buyer’s lawyer, the appraiser if there is any question of the home’s value, and the bank if you’re involved in a short sale. No matter how confident you might be about sitting down with a buyer and coming to an agreement, there’s something to be said about understanding the real estate industry and having a little negotiating experience.
5. Exposure is Minimal Compared to the MLS
One of the most important things involved in the home selling process is advertising. Ideally, you want to get as many eyes on your house as possible to maximize the number of offers coming in. While there are tools available for FSBO’s, they’re no match to the type of tools available to real estate agents, namely, the Multiple Listing Service (MLS).
This internet advertising platform is by far the most effective means of advertising properties for sale. All licensed agents in your community will see it, and be notified when a property comes up that matches their clients’ criteria.
In addition, real estate agents will have the means and the know-how to prepare all sorts of other marketing materials, including internet marketing, brochures, and open houses. He or she will also make sure to regularly network with other industry professionals who have interested buyers – perhaps the buyer for your home.
6. FSBO’s Can Deter Buyers
The biggest group of potential buyers will most likely be represented by a real estate agent of their own. These agents just might prefer to work with other agents instead of FSBO’s for the simple fact that they might be concerned about earning their rightful half of the commission.
As the seller, if you already planned on forking over the buyer’s agent commission, you’re saving very little at the end of the day, if anything at all. If you’re not planning on contributing a commission portion to the buyer’s agent, consider them gone.
Going the DIY route during a home sale isn’t as easy as you might initially think, nor will you be saving as much as you had hoped. At the end of the day, there’s a lot of work involved in the process. This work requires a lot of time, which might be tight depending on your schedule. The work involved might be over your head, putting you in a compromised position where money is being gambled.
To take the stress and hassle out of the equation, and ensure you get the most money out of the deal, hire a real estate agent to do the dirty work.