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9 Reasons You Should NOT FSBO

Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a For Sale By Owner). However, a FSBO might not be a good idea for the vast majority of sellers.

Our top 9 reasons are listed below:

1. Bidding Wars Lead to Maximum Profit

But what exactly does that mean?

Eric Levanduski, Real Estate Specialist at Brick & Corbett explains it simply, saying:

“Let’s say your neighbor down the street just sold their home for $30,000 over list price, and had 8 different offers to choose from. How do you think that happened? A BIDDING WAR. Bidding wars happen when you maximize your home’s exposure to as many qualified buyers as possible. From exposure on the MLS to social media and third-party website syndication; if you want the most money and the best terms you need a professional taking the brunt of that stress off of your already-full plate.

You need a Realtor.”

2. Online Strategy for Prospective Purchasers

Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use print newspaper ads. Most real estate agents have an Internet strategy to promote the sale of your home. Do you?

3. Results Come From the Internet

Here is where buyers found the home they purchased:

  • 50% on the Internet.
  • 28% from a Real Estate Agent.
  • 7% from a yard sign.
  • 1% from newspapers
  • The days of selling your house by putting up a sign and listing it in the paper are long gone. Having a strong Internet strategy is crucial.

4. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer, who wants the best deal possible.
  • The buyer’s agent, who solely represents the best interest of their buyer.
  • The buyer’s attorney (in some parts of the country).
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house.
  • The appraiser, if there is a question regarding value.

5. The Percentage of FSBO Home Sales in 2020 Declined to 7% of All Home Sales

Bob Brick, Owner/Leadership Team at RE/MAX Bayshore lets the data lead the way, explaining:

“The National Association of Realtors (NAR) statistics reveal that the percentage of FSBO sales in 2020 declined to only 7% of all home sales. This is because FSBO-negotiated homes sell for an average of 14% less, can take up to 3 times as long to sell, and also have a significantly higher degree of the deals falling through. In contrast, the same NAR report shows that 93% of buyers and sellers preferred having the guidance of a full-service Realtor to navigate them through the waters of today’s ultra-competitive housing market.

For the very best results, I recommend you hire a trusted Realtor.”

6. Pricing

It sounds pretty simple, won’t Zillow just figure that out? Don’t count on it.

Alexa Hughes, Real Estate Specialist at Brick & Corbett puts this all into perspective by saying:

“Firstly, pricing is not what Zillow suggests- not by any stretch of the imagination. Next, do you know how to evaluate comps? And, what do you do next if there aren’t any recent comps in your area? Is the bathroom remodel you did truly worth what you think it is? Do you know and understand the methods appraisers are using to value your home, and if it doesn’t appraise, do you know what your next step should be? Also, did you know that the appraised value doesn’t align with the offer price, the whole deal could fall through? Some appraisals can even lock you into your property for up to 6 months!

The questions about price alone are enough to keep even the most seasoned realtors awake at night.”

7. Time Costs The Seller

The biggest cost to a homeowner is one that is also frequently forgotten- their time. You might hear the argument that it doesn’t take an agent very much time to sell a house. And, given the technology at our disposal, that’s often true — to an extent. But it will take a homeowner a whole lot longer.

What is their own time worth to them? How much time will the seller be able to spend researching the market and contracts, especially if they’re also preparing for a move of their own? Is the seller going to leave work to unlock the house each time there’s a showing? Personal time is a factor that simply cannot be ignored.

8. FSBO-ing Has Become Increasingly Difficult

The paperwork involved in the process has increased dramatically as industry disclosures and regulations have become mandatory. This is just one of the many reasons that the percentage of people FSBO-ing has dropped from 19% to 7% over the last 20+ years.

Alexa Hughes not only agrees, but offers additional food-for-thought by saying:

“Most buyers actually prefer to work with an agent, so as a FSBO, you will likely receive an offer from a seasoned agent- one who has been specifically trained to negotiate AGAINST YOU. Even more worrisome is the chance that you may be approached by an unrepresented buyer and find yourself in a situation where both buyer and seller have zero experience deciphering numerous pages of complex legalese that ultimately result in a legally-binding transaction.”

9. You Net More Money When Using an Agent

Wait. WHAT?

Many homeowners believe that they will save the real estate commission by selling on their own. What they don’t realize is that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The reality is, seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

This further validates Eric Levanduski‘s previous statement that the more buyers that view a home, the greater the chance of a bidding war for the property. The same study also found that the difference in price between homes of comparable size and location is currently at an average of 6%.

Listing on your own leaves you to manage the entire transaction yourself. Why do that when you can hire an agent without additional cost?

Bottom Line

At Brick & Corbett we firmly believe that knowledge is power. So, before you decide to take on the Herculean challenge of selling a house on your own, let’s get together to discuss your needs and goals, allowing you to make highly informed decisions that will reap you maximum rewards.

Tommy Corbett, Leadership Team at Brick & Corbett leaves this favorite FSBO quote as a final thought:

 “Listing your home yourself is like winking at a girl in the dark. You know what you did, but nobody else does.

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