“For Sale By Owner” or “FSBO” is a growing trend in the real estate market. It is super tempting, as it often cuts out the middleman, however, most people are not thinking about the pros and cons beyond that point. Many people think that if they do this on their own, they walk away with more money, which can sometimes be the case. But, are you taking into consideration the cons of making this move? When it comes to selling a home on your own without the aid of a real estate agent, you are going to find that there are both pros and cons that need to be considered before making this decision.
The Pros of Selling Your Own Home
There are several benefits of selling your own home that are going to be obvious to those who are ready to make this leap. The benefits of selling your own home include:
- Not having to deal with a listing agent which means you are don’t have to pay them a fee for simply listing your home. In most cases, listing agents take 2-3% of whatever the homes sell for.
- You have total control over the entire process. For those who like to have control, then this is the ultimate way. You get to control who comes to see the house and when you schedule showings, without having to coordinate with an agent.
- You avoid agent-seller conflicts. Believe it or not, there are many people who end up hating the entire selling process just because they are not seeing eye to eye with their agent. This type of conflict is to be expected, after all, you have two personalities coming together that may not fit together.
- You have the knowledge to speak about your home to potential buyers, and this could make it sell easier. You may have built this and can talk about this and that, making it look even more appealing to potential buyers. After all, who better to up-sell your home than you?!
- You are directly communicating with potential buyers so there is no middle man involved. For many people, this can make the discussions that much easier and direct, so everyone knows what page they are on and nothing is lost in communication.
Drawbacks of Selling a Home On Your Own
For many people, the thought of saving money is enough to make them decide that they would rather sell their home on their own. However, with any decision, there are also some drawbacks to consider. For those who are on the fence about whether this would be a good move or not, consider these drawbacks:
- The home may sell for a lower price than if you were to list it with an agent. Statistically speaking, homes that are sold by owners often sell for $20,000 to $40,000 less than what a selling agent would have gotten out of the home. Why is this? Often there are fewer bids on the home since it is not being marketed in the same circles that a listing agent has access to. Thus, you have to weigh whether a lower selling price is worth the 2-3% commission that a listing agent would take.
- You may price the home incorrectly. Since you aren’t an expert on the local housing market, you may overprice or underprice the home, resulting in fewer showings, offers, and ultimately a lower sales price.
- Selling a home on your own is going to be time-consuming. You are going to be the main point of contact for those who are interested in this home. Thus, you will have to set up viewing times, arrange for the marketing of this home and the like. These are tasks that a listing agent would normally handle and you are doing all on your own.
- Lack of resources is also a big drawback to selling your own home. Do you have all the resources that a listing agent would have in order to make sure that the home is priced right? Do you have the marketing talents that agents have? Will you take beautiful photos of the house? And most importantly, do you have the network of contacts that an agent has?
FSBO (For Sale By Owner) Advice and Tips
If you decide that the positives outweigh the negatives, then you will find that there is a ton of work to do in order to get the house you live in on the market.
- You will have to price your home correctly. You will have to do your research to find homes that are comparative to yours in size and in the area to find out what you should price this. You are not going to have to access the full version of MLS like the agents do so you will have to rely on free sites like Redfin and Zillow that have limited information.
- You will need to get the legal paperwork in order. Since New York is an attorney state, you will have an attorney on your side to help you out. However, you must ask them for the standard paperwork that a real estate agent normally brings to the table and rely on the attorney for some extra help. Do note that some attorneys may charge extra if you choose to sell your home on your own because they know it will require more hand-holding to get the deal closed.
- Negotiate the sale. Since this is likely the largest transaction of your life, you may want to read up on some tips about negotiating the price. A real estate agent has the luxury of negotiating without the emotion of owning and having lived in the house. However, you must be able to separate the emotional aspects of an offer with what you can realistically get for the property. But, in the end, you are going to have to take an amount that is going to sell the home, especially if you are in the position that you need to sell the home fast.
Alternative to Selling a Home Yourself
Once you realize the pros and cons of selling a home on your own and just what all goes into this, you may decide that selling on your own is not up your alley. Which is fine…not everyone can be a success at doing this. So, what alternatives do you have?
You can always work with a real estate agent to get your home priced and sold. However, you may still find that you are dealing with someone who does not have a personality that fits yours. In this case, it can make this process something that you regret. So, what other choice do you have?
You can opt to sell your home to a home buying company, like Leave The Key Homebuyers. With this option, we look at your home, assess the value and give you a cash offer. It is an easier way to sell a home quickly without having to do the work on your own or hire an agent to sell this for you. For those who are dealing with a home that they need sold and out of their hands, this is the speedier process as you can often get an offer within 24 hours.