Is For Sale By Owner A Good Idea or Not?
Does For Sale By Owner Really Save Money
Many people who are ready to sell their homes think that For Sale By Owner (FSBO) is the way to go. After all, you get to cut out the real estate commission, so technically you can sell the home yourself cheaper and keep all the profits.
Many do not realize the headaches and costs of selling by owner. Certainly, you cut out the commission, but usually, the realtor just adds this 5-6% to your asking price so that the buyer actually pays the commission. According to NAR, “a typical FSBO home sells for $200,000, while a typical home sold by an agent sells for $280,000.” That adds up to homes sold by agents getting an average of 28.6% more than FSBO sales. This number reflects the expert knowledge real estate agents bring to a sale.
Sale By Owner Advertising Cost
By selling yourself, you assume all the costs related to advertising. A simple sign in the front yard just will not get the job done. Whatever prospects you get are usually bargain hunters who see the sign and immediately think it is a distressed sale. Many of the prospects are not qualified and are merely lookers who also have a house to sell before buying yours.
Sale By Owner Home Showings
You also are the one to show your house to prospects. It is true that this way you can set your own time for viewing, but you may find that it really interferes with things that you really want to do.
Pricing Your Home For Sale
Another thing to consider is that unless you are well versed in housing values in your neighborhood, you may overprice or underprice your house. An overprice will result in your house is up for sale for an extended period of time. An under price may result in a fairly quick sale, but you will have lost money that was left on the table so to speak. You will have also devalued your neighbors’ properties, as real estate values are often set by comparable sales within a neighborhood.
Sale By Owner disclosures
If you do make a sale, you then have to worry about what information must be disclosed to keep you within the law. There are certain disclosures, such as a leaky roof, foundation settlement repairs made after storms, and others. Many of these will come out during an inspection of the house, but if not disclosed or discovered before closing you may leave yourself open to a lawsuit.
Using A Real Estate Agent
With a realtor, you do not have to worry about advertising costs, showing the house, or entering negotiations until the end. A realtor will be able to show and negotiate on your home without an emotional attachment. Your Agent will want to sell it for the best possible price, as this is the way he makes his living. He or she will do the best to get the figure that you are expecting to the net. Your agent will prequalify prospects, get them signed, and point them in the right direction for financing. He will see your sale all the way through closing. All of this is included in the commission that you did not want to pay. When you consider all of this, a realtor’s commission may well be worthwhile.
Bottom Line
Is For Sale By Owner really saving you any money and is it really worth the time you spend? Our experts in real estate will be able to advise you from start to finish. Your real estate agent will also know exactly what information needs to be divulged to keep you legal. The statistics show selling by owner is like throwing away $63,200.00 after paying out commissions. So in the end, is it worthwhile to post an FSBO sign in your yard? You may still want to if you enjoy the rigors of selling a home. But for most people, the sale of a home is better left to trained real estate professionals.