Selling Your Home Yourself: The Risks and Rewards
When it comes to selling your home, you may be tempted to avoid a real estate agent and save thousands of dollars by selling it yourself, also known as “for sale by owner” (FSBO). After all, the standard real estate agent commission is typically around 5% to 6%, which can add up to thousands of dollars on a home sale. However, before you decide to go it alone, here are some important factors to consider.
- Realtors May Not Show a “For Sale By Owner” Home
Some agents have in their Buyer Agency that if a seller won’t pay a commission then the buyer is obligated to pay. Also as real estate agents, we understand sellers and seller behavior. If a seller is too cheap to pay for professional assistance are they going to negotiate with a buyer? Most likely not. Have they kept their home in good condition or is there deferred maintenance? We see that A LOT on FSBO homes? Are there issues they don’t want to disclose and an agent would make them disclose it? Are they really people that seem reasonable? Not to me!
One of the biggest risks of selling your home yourself is the potential for limited exposure to potential buyers. In an FSBO deal, the buyer’s agent knows that there won’t be a professional colleague on the other end of the transaction. Even if a client insists on seeing your home, the agent might discourage making an offer, citing the hassles and risks of trying to close the deal without a professional representing the seller—and without a guaranteed commission.
While some buyers’ agents may still show your property, it may be more difficult to get a showing than if you were working with a real estate agent. Experienced brokers have generally been burned by an FSBO transaction in which the seller did not pay the full agreed commission—or any commission at all—to the agent who brought the buyer. As a result, FSBO sellers are often viewed as unrealistic, unreasonable, and difficult sellers whom professional realtors have rejected.
- Agents Avoid Emotional Sales
Selling your home can be an emotional process, and having an agent can help you stay one step removed and avoid making mistakes that could cost you money. An agent can help you avoid overpricing your home, refusing to counter a low offer because you’re offended, or giving in too easily when you have a deadline for selling.
Additionally, an agent can take the sting out of any negative feedback or rejection you receive from potential buyers. Constructive criticism can be easier to digest for the seller when it comes from a broker who is on their side, trying to get the best for them.
- Real Estate Is a Full-Time Job
Selling a home requires a significant amount of time, energy, and expertise. Are you able to rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? Are you an expert in marketing homes?
The answer to all of these questions is probably “no.” An agent’s answer to all of these questions is “yes.” In addition, by going through an agent, you’ll get a lockbox for your front door that allows agents to show your home even when you aren’t available.
- Agents Access Large Networks
Real estate agents have access to a vast network of potential buyers and other agents who can help promote your home. While you can list your home yourself on various websites, including Zillow, Redfin, Craigslist, and even the multiple listing service (MLS) that agents use, it may not be enough to reach a large number of potential buyers.
Real estate agents have established relationships with clients, other agents, and even professional organizations that can help them market your home effectively. They also have experience in pricing homes, negotiating offers, and closing deals, which can be invaluable when it comes to selling your home.
- Legal and Regulatory Requirements
Selling a home involves numerous legal and regulatory requirements that can be difficult to navigate without the help of a professional. This includes disclosures, inspections, appraisals, and more. A real estate agent can help ensure that you comply with all of the necessary requirements, reducing your risk of legal issues and potential lawsuits.
- Pricing Your Home
One of the most critical factors in selling your home is pricing it correctly. If you price your home too high, it may sit on the market for months, causing you to lose money and miss out on potential buyers. On the other hand, if you price it too low, you may leave money on the table.
Real Estate Agents Have Tools That You Don’t
Real estate agents have access to data on recent home sales in your area, which they can use to help you set a realistic price for your home. They can also advise you on how to price your home competitively to attract more potential buyers and maximize your sale price.
It is Crazy to Sell Your Home FSBO
In conclusion, selling your home yourself can save you money on real estate agent commissions, but it also comes with risks and challenges. Limited exposure to potential buyers, emotional sales, the need for a full-time commitment, lack of access to a large network, legal and regulatory requirements, and pricing challenges are just some of the factors to consider. Working with a real estate agent can help you navigate these challenges and sell your home for the best possible price.