Why You Should Not Sell FSBO (For Sale By Owner)
In today's real estate housing market, with soaring home prices and a shortage of supply of inventory, some homeowners may consider selling For Sale By Owner (FSBO). There are many reasons why this may not be the best decision for the vast majority of home-sellers.
1. Buyer Exposure - According to a recent study from NAR (National Association of Realtors) in 2017, 95% of home-buyers begin their search online for a home as compared to only 15% who search the ad section in the local newspaper. Most professional real estate agents have an internet strategy to promote your home for sale online. Do you?
2. Internet Results - Where did actual home-buyers find the home or condo they purchased? the study revealed: 49% from the internet, 31% from a local real estate agent, 7% from a sign in the yard and finally 1% from newspaper ads.
The days of simply putting up a sign in front of your home to sell and advertising in the local paper are long gone. Being found on the internet everywhere is crucial.
3. Negotiations with too many people - Below is a list of some of the people you will have to deal with when you sell FSBO:
- The buyer who wants the best deal possible.
- The Buyer's agent who will be looking after the buyer's best interests.
- The Closing AGent/ Attorney who will be handling the sale on behalf of the buyer.
- Home Inspection Companies, who are hired by the buyer and will almost always find issues.
- The home Appraiser - if the buyer will be financing or a cash buyer who wants to be sure the property appraises for the purchase price.
4. Selling FSBO has increasingly become for difficult - The Purchase & Sales Contract, Addenda and disclosures are numerous. It is no longer "Buyer Beware" but "Seller Must Disclose". This issue along has contributed to the drop of sellers selling on their own from 19% to 8% over the last 2 decades.
5. Your Net is higher when selling with an agent - Many home-sellers are under the assumption that selling themselves saves them the commission. However, buyers that look at FSBO homes believe they should save the commission. No two people can save the same commission!
A Collateral Analytics study recently found that For Sale By Owners don't actually save anything, and often end up costing themselves more, by not using the services of a real estate professional. One reason for the price difference at sale closing is:
"Properties listed with a broker that is a member of the local Multiple Listing Service (MLS) will be listed online with all other participating broker websites, marketing the home (or condo) to a much larger pool of buyers. And properties for sale in the MLS generally offer a selling commission to agents who bring the buyers, incentivizing them to show and sell a property and again growing the pool of buyers."
If a property is exposed to more buyers, the result is a greater chance there could be multiple offers are a bidding war for the home. The study also revealed the difference in price between comparable properties of similar size and location is at an average of 6% this year.
With that being the case, it doesn't really make financial and business sense to sell on your own when you can hire a professional agent to get you top dollar and handle all aspects of the sale.
When you are ready to begin the home selling process, let's get together and discuss your needs. Call us or contact us here.
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Disclaimer:The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. John Sabia PA and Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. John Sabia PA and Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.