For Sale By Owner
Have you ever wondered why only 16% of all homes put on the market each year are listed as "For Sale By Owner" (FSBO)? Wouldn't you think that more people would sell their own homes so that they could save money on brokerage fees? Especially in today's booming house market, doesn't it seem like more people would try selling their own homes so as to put some extra cash in their pocket by not having to pay a broker?
However, when you look at the facts and see that only 3 out of every 10 FSBO sellers said they would sell by themselves again and then check out the statistics that show the average sale price of an FSBO is less than agent sold homes, you might begin to wonder how good of an idea FSBO really is.
If you're thinking about selling your own home, let's look at some of the benefits and drawbacks of going the FSBO path.
What is the major perceived benefit of selling your home FSBO?
The major perceived benefit of selling your home yourself is that you will save the brokerage fees that you would pay if you chose to work with a professional realtor. Many homeowners who choose to sell "By Owner" are hoping to make a little more money on their home sale by choosing not to use the services of a realtor. In theory, this seems like a good idea. How can you argue with the idea of saving a few thousand dollars on commissions, right? How difficult can it be to sell a home, especially in today's hot market?
You might be surprised, however, to learn that many FSBO sellers actually make less money on their home sale than if they'd worked with an experienced professional realtor. FSBO sellers quickly learn that the demands on their time, their lack of experience, and their inability to negotiate the fast-paced landscape of home sales might leave them with more stress and less money in their pockets than if they'd just paid the brokerage fees in the first place.
Time and time again, once the reality of their situation sinks in, we see many FSBOs wishing they would have secured the services of trained professionals from the start.
What can a realtor bring to the table that a FSBO can't?
Many FSBOs feel that they can bring all the same things to the home selling experience as would a realtor. The reality, however, is that this is just not simply possible. For example, when a single realtor lists his properties with the Multiple Listing Service (MLS), thousands of realtors see the listing. When an FSBO lists his property with a sign in the front yard or in the local classifieds, the numbers of prospective customers dwindles significantly.
In addition, the fact that over 75% of homebuyers use the services of realtors when buying a home, FSBOs are left with the 25% who often are less desirable homebuyers (e.g., those who are not qualified to obtain a mortgage, bargain hunters, or just lookers who end up wasting the homeowners time). FSBOs quickly discover that these types of homebuyers can make their home selling experience a real nightmare.
What does the realtor do to earn his commission?
Many FSBOs simply do not understand what a real estate professional does to earn his commission. Making sure that your real estate agent is doing everything you deserve to make your home selling experience as great as possible is important. The first step toward making this a reality is in knowing what a realtor is supposed to be doing for you as the home seller. Here is just a small sampling of the common tasks that a realtor will perform for the seller:
· Assist home seller in setting the best price for the home.
· Make sure that all the paperwork is filled out and delivered appropriately and on time.
· Attract qualified buyers to the view and bid on the home.
· Market the home to prospective buyers using his experience and skills as a professional salesperson.
· Help the seller navigate and understand all the financial aspects of the transaction.
· And, ultimately, do everything in his power to make sure that the seller comes out with the highest sales price and the least amount of stress and worry.
For most people, when they truly understand all of the benefits of working with a realtor, they are glad to pay the commissions that the realtor earns through his hard work and dedication to your home sale. FSBO can and does work, but with a decision as important as selling your home, why take a chance that it won't work for you? With such a major financial and legal transaction as a home sale, why risk your peace of mind, your bank account, and your future just to try and save a few extra bucks?
Contact us to discuss how Team Hodnett can assist you in selling your home.