Some of the latest statistics as reported by the National Association of Realtors revealed that 8% of homes sales were For Sale By Owner (FSBO) transactions. If you’re thinking about listing your home, there are some pros and cons that are important to understand in making that decision whether you live in Phoenix, Boston, Atlanta or anywhere else.
There’s no commission fee. The reason most homeowners decide to list their home as FSBO is that they won’t have to pay the commission fee. As real estate agents charge a percentage based on the sales price that could mean saving thousands of dollars, depending on the value of the home. A 6% commission on a home that sells for $300,000 is $18,000 – no small chunk of change.
You’re in control. When listing your own home, you have total control of the sales process. You’ll price it, market it, schedule home viewings, negotiate, the whole shebang. You’ll personally get to meet all potential buyers to determine if they’re serious candidates. If you’re emotionally attached to your home, it can be comforting to know you’ve chosen a buyer who will really appreciate it.
You know the ins and outs of your home. You’ll be able to show prospective buyers your home from an owner’s perspective, highlighting its best features while focusing away from the negative.
You may end up losing money in the end. Selling a home probably isn’t as easy as you might think. According to The National Association of Realtors, more than 90 percent of all FSBOs fail, and a real estate agent is ultimately hired to do the job anyway. When they are successful, they often sell for quite a bit less, negating the savings of the commission fee. The NAR also reports that the average FSBO sold for $190,000 – $59,000 less than the average agent-assisted home sale.
Marketing will be challenging. Without an established network, marketing can be extremely challenging. Only realtors can list homes on the Multiple Listing Service, which is one of the primary online tools real estate agents use. Agents also get the word out across a network of buyer’s agent that are working in your area.
It takes a lot of time and effort. You’ll need to devote a lot of time and effort to selling your home, getting it inspected, making necessary repairs done, photographing, listing and showing it. As there are always some people who are just “looking around” and not really serious about buying, a lot of your time will be wasted. It’s typically harder for someone who isn’t experienced in real estate to weed out unqualified or uninterested buyers.
You’ll need to educate yourself on the laws and regulations. As every area has its own laws and regulations when it comes to selling a home, you’ll need to do some research to make sure everything you do is legal as well as prepare all the necessary paperwork. If you don’t you could easily find yourself facing a lawsuit.