Whether it's a buyer's market or a seller's market, there seem to be some homeowners who insist on trying to sell their own property. If you ask them why they can no doubt provide you with several reasons as to why it's better not to get a real estate agent involved. The primary goal is usually saving money.
But if you examine the pros and cons of using a realtor to sell your home, it's easy to see that being a FSBO probably won't result in a huge savings – or a savings at all – and you'll add plenty more stress and frustration to the entire process as well.
Below we've compiled a list of 10 reasons why you should avoid the For Sale by Owner sign and opt instead for the placard of one of your area's top realtors.
- Underpricing – Statistics show that many homeowners who are selling on their own don't do the work it takes to determine the proper price for their house, nor do they have the tools available to them to make the proper determination. Hence they may lose money many when pricing too low.
- Overpricing – FSBO's don't have to pay commission to a realtor so, often, they get greedy and try to get as much as possible, pricing their home at the top of the acceptable range in hopes of keeping for themselves the few extra bucks they'll save by not paying that commission. But buyers these days are very well educated, and chances are they'll come in with an offer under the asking price. Or, because the home is overpriced, the seller won't get any showings and will not only waste valuable time but will have to lower the price in the end.
- Inability to qualify buyers – Determining that a buyer can purchase your home is paramount to a good deal. While everything else might look good on paper, if your potential buyer has poor credit or other financial problems you haven't discovered, you may wind up with a deal that doesn't go through. As a result, you will have not only lost this deal but perhaps other buyers in the meantime. You may wind up starting all over again!
- Lack of exposure from advertising – While it's true that FSBOs do indeed spend money to advertise their home, the fact remains that strength lies in numbers. You – the FSBO – are selling only one home, but if you have a real estate brokerage selling your home and someone calls them about another ad, they can also mention your home during the conversation. That results in way more exposure for your house.
- Lack of experience – Simply put, you probably haven't sold a home before. Maybe you're good at selling in general, or perhaps you think you're terrific at staging your home so it will sell quickly. Still, the fact remains that someone who does this all day, every day is going to be better at the details, including issues such as follow-up and techniques used to "close" the deal. As a result of your inexperience, you lose both buyers and time.
- Strangers have access to your home – When you sell with the help of a realtor, there is always someone there to accompany your potential buyer as they wander through your house. When you're a FSBO, buyers come on their own and – honestly – you don't know if they're really interested in buying your house or just interested in gaining entrance to your home for more ominous reasons. In short, they may be "casing" your home and fishing for information as to when you're at work and at what time the property is empty so that they can break in and steal your valuables. It happens!
- You lose showings because you're not home – Those selling by owner don't generally use lockboxes to allow prospective buyers to gain access and take a look at their property, so showings are at the mercy of the owner's schedule. If you're married and you both have jobs, for example, you may find that you lose a lot of opportunities to show your house simply because you're not available. If you list with a realtor, a lockbox is a good option, and your home can be shown even if you're hundreds of miles away.
- You're judged by your curb appeal – When you put a FSBO sign on your lawn or in your front window, all potential buyers see when they drive by is what's on the outside. They totally miss the wonderful things you've done on the inside. That might mean that they just drive by and don't take the time to consider what they're missing or don't call the number on the sign, which would have allowed you to chat about the rest of the property and its assets.
- Buyers don't believe you – A person who's selling their own home has a huge vested interest in making that sale happen, so buyers often believe that the seller isn't totally honest about the property's assets. They may think you're exaggerating and that your opinions are biased just because of an emotional connection to the home. When a house is shown by a realtor and the owners are not present, that problem disappears.
- Getting to settlement – Many homeowners who are considering selling on their own don't realize what it takes to get from that signed contract to the settlement table. Loan processing, titles, deeds, inspections…snags can happen with all of these. Furthermore, these things must be coordinated on a particular time schedule so that everything is completed by the agreed-upon date of settlement. When the two parties – buyer and seller – are navigating this on their own, problems may arise due to lack of knowledge. It could result in a delay of settlement at the least and – at the most – loss of the whole deal.
So, before you head to your local home improvement store to pick up that FSBO sign, think about the items above and consult a local realtor to learn more about their services. Chances are you'll discover that garnering the help of an experienced agent is worth way more than a small percentage of commission you'll save if you sell on your own.