While saving on Real Estate commissions can seem appealing when trying to sell your home, listing your home For Sale by Owner, or FSBO, can end up costing you more time and money than what it’s worth. Consider the following pitfalls of selling your own home to determine if you want to move forward on your own or if you would rather hire a Real Estate professional to assist you.
1. The amount of time you need to sacrifice. Selling your own home takes more time and effort than just listing your property online and placing an ad in a newspaper. You need to do your research on the current market and comparable listings in your area. You will also need to schedule every showing of your home and ensure that you are available to those who want to see it, and those appointments take up a lot of time. You will often have people just stop by at all hours of the day and night. You will also need to verify a buyer’s preapproval status, screen buyers, and negotiate contracts.
2. You may end up losing money. Statistically, FSBOs sell for significantly less than homes sold by Real Estate agents. Your listing price is extremely important to the sale of your home and is often either overestimated or underestimated by sellers who try to determine this on their own. Real Estate agents have a better sense of the market and they know what a comparable home will sell for. They also have access to your local Multiple Listing Service (MLS) to research local home sales. Most homeowners have never had to negotiate such a big transaction before, so it can be overwhelming, causing some sellers to settle for a lowball bid. Also, even small mistakes in the process may cost you the money you were trying to save on agent commissions.
3. Exposure of risk. FSBOs can be targets for theft and burglaries. While a majority of potential buyers have a genuine interest in looking at your home with the intent to purchase, a “For Sale By Owner” sign can sometimes be an invitation to strangers to enter your home. Extra security measures should always be taken when you list your home yourself
4. Lack of advertising resources. As mentioned above, Real Estate agents have access to your local MLS, which Real Estate professionals use to market homes. Agents also use signs, newspaper ads, mailings, open houses, flyers, websites, social media, and current and previous clients to advertise the homes they sell. Most home searches are done online, so if your home is not listed on your local MLS, it may get missed by many potential buyers. In addition, most Real Estate agents use professional photographs for their listings. Some also use professional home stagers to help present your home in the most appealing way. While you can do this on your own, it may come at an extra cost, and unless you have professional contacts or experience yourself, you may be missing out on a number of resources.
5. Lack of knowledge about the law. Selling your home is one of the largest transactions you will make. Local laws and requirements in the housing industry are constantly changing. When you sell your home yourself, you will also likely be the one preparing the paperwork, legal forms, disclosures, etc., and you will be required to know everything that must be done to close the sale properly. While you can do your research, if you are not skilled in writing contracts, you may end up having the transaction fail, or worse, end up with a legal or financial liability because you made a mistake. Many homes sales have been lost due to incomplete or incorrect paperwork or not meeting the necessary disclosure laws.
Many unrepresented sellers find the amount of money they save disappointing and say that the time, paperwork, and responsibility was not worth the money they saved. If you are considering selling your home, consider using a professional Real Estate agent and give us a call today.