Why Selling on Your Own May End Up Costing You
As we are currently in a hot seller's market, with more Home-buyer demand than housing inventory, it may be tempting for home-sellers to consider selling on their own - For Sale By Owner (FSBO). In an effort to save paying the real estate commission, some home-owners may rationalize that they really don't need a real estate sales agent to handle the sale, as they believe they can do it themselves.
However, a Collateral Analytics study showed that For Sale By Owner sellers don't actually save anything, and in some situations, they may be costing themselves more, by not hiring a professional real estate agent.
Analyzing home sales in various markets across the country, The study found that: "For Sale By Owners tend to sell for lower prices [than those] of comparable home sales, and in may cases, below the average differential represented by the prevailing commission rate."
Why Would For Sale By Owners pocket less than had they used a REal Estate Agent?
The study finds:
- Some Buyers could hold a systematic bias towards For Sale By Owners. FSBO's might attract more strategic buyers than those from MLS sales, in particular, buyers who already expect to offer lower because the seller is not paying a real estate commission. [Here lies the saying, no two people can save the same commission]. These strategic buyers might seek out and target sellers who have not hired an agent. These buyers are bargain shoppers looking to score a great deal.
- Experienced Professional AGents are experts at "staging" homes to appeal to buyers, which could potentially net the seller more money.
- Properties listed for sale in the local Multiple Listing Service (MLS) will be exposed to all brokers/agents who are members of the local Realtor Board. In addition to appearing in MLS, the property will be listed online, syndicated to all Realtor and 3rd party websites exposing the property to everyone who is looking online in that particular neighborhood. MLS listed properties offer compensation to agents working with buyers, giving them an incentive to show and sell the property and again, exposing the property to a larger pool of home-buyers. If more buyers view a home, there is a better chance for multiple interest which leads to bidding wars and multiple offers.
Conclusions from the Study:
- For Sale By Owners achieve significantly lower sales prices that sales of similar properties sold by Realtors using the MLS.
- The findings show the average price was near 6% lower for For Sale By Owner Sales of similar properties.
As explained by Dave Ramsey, a well respected Money Adviser, "Research has shown that, between mistakes, lack of negotiation skills, pricing errors and general exposure on the market, you'll cost yourself more than the real estate commission... You'll come out slightly better and with a lot less hassle if you use a top-shelf agent."
If you are considering selling your Fort Lauderdale home or Fort Lauderdale Condo, let's get together. Give us a call today.
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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.