Home Sellers and Selling a home as a FSBO<\/span><\/h2>\n\u00a0<\/p>\n
So you\u2019re thinking of selling your home by yourself. You think, \u201c\u2026how hard can it be?!\u2026\u201d<\/strong>. You\u2019re smart. You can do just about anything you put your mind to. Plus. A big plus. You want to save some money. You\u2019re not alone as this is a very common belief held by many homeowners who decide to venture out into the lands of home selling without any experience selling a home. Here, I welcomed another person\u2019s viewpoint on selling a home as a for sale by owner.\u00a0 <\/em>Ben will take it from here \u2013 thanks Ben:<\/em><\/p>\n\u00a0<\/p>\n
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![\"Selling](\"https:\/\/www.imagineyourhouse.com\/wp-content\/uploads\/2020\/06\/why-home-sellers-shouldnt-fsbo-1-e1593026434706.png\")
<\/a>A\u00a0for sale by owner<\/span><\/a><\/span>\u00a0(or FSBO) means a home is being sold without the representation of a listing agent. Instead, the owner sells the home completely on their own, including setting the listing price, staging, photographing, and marketing the home. They also negotiate directly with buyers, or through the buyer\u2019s agent. Selling FSBO is usually chosen to save the seller money by avoiding agent commissions. But, there are some downsides, which we\u2019ll discuss here. Additionally, the seller may not be saving as much as they think.<\/span><\/p>\n\u00a0<\/p>\n
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FSBOs sit on the market longer<\/span><\/h2>\nFSBO homes typically spend\u00a0more time on the market<\/span>\u00a0b<\/span>efore a buyer is found and the sale is closed. On average,\u00a0<\/a>18 percent of FSBOs were unable to sell<\/a><\/span>\u00a0<\/span>within their chosen time frame last year. There are several reasons for this \u2014 the most obvious being marketing.<\/span><\/p>\nWhile FSBO sellers do have access to popular listing platforms like Zillow, Trulia, or Facebook Marketplace, they\u2019re unable to post to their local multiple listing service (MLS) unless represented by a licensed real estate agent. Exclusion from the MLS means that buyers and their agents who regularly scan these lists will miss the listing, resulting in a smaller buyer pool for the FSBO seller.<\/span><\/p>\nAdditionally, FSBO sellers typically overvalue and overprice their home. This results in buyers skipping over the home, as they assume the seller would be unwilling to lower the price to a more reasonable number. Good real estate agents find the sweet spot to make the most profit, while also\u00a0selling the home quickly<\/a><\/span>.<\/span><\/span><\/p>\nAnother reason for the delay in the sale of a FSBO home is that these probably have full-time jobs and families and may not be able to keep up with all the interested buyers or expedite paperwork and negotiations like a real estate agent would.<\/span><\/p>\n\u00a0<\/p>\n
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FSBOs sell for less<\/span><\/h2>\nAccording to the National Association of Realtors,\u00a091% of sellers<\/a><\/span>\u00a0are assisted by a real estate agent when selling their home. Many that start as a FSBO eventually sign on with an agent in order to sell their home. On average, agents sell homes for 33% more than if the home were listed as a FSBO.<\/span><\/p>\n\u00a0<\/p>\n
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Hidden costs of FSBO<\/span><\/h2>\nWhile on the surface it may seem a seller could save lots of money by listing the home themselves, costs begin to add up. Lots of extras are included when you work with a real estate agent that are often overlooked \u2014 this may include signage, flyers, photography, MLS listing, negotiations, contracts, etc.<\/span><\/p>\nIt is true a FSBO seller can save on the commission they would have otherwise paid a listing agent \u2014\u00a0usually around 3% of the purchase price<\/a><\/span><\/span>. The costs add up\u00a0in expensive areas like Chicago<\/span> neighborhoods<\/span><\/span>\u00a0or\u00a0San Diego<\/span>.<\/span><\/span><\/p>\nHowever, sellers are probably still on the hook for paying the buyer\u2019s agent, which can also be around 3%. Sellers often overlook this cost and think they won\u2019t need to pay any agent commissions. On a $200,000, you\u2019d only save around $6,000 and have to do all the work yourself.<\/span><\/p>\nOne often overlooked cost is the expense of being unable to line up your closing date with the date you can move into your new home. While agents are quite skilled at this, it can be tricky to manage if you\u2019re inexperienced and could result in you having to\u00a0pay for storage<\/a><\/span>\u00a0for the in-between time, a bridge loan while you pay two mortgages, etc.<\/span><\/p>\n\u00a0<\/p>\n
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Agents have expertise and experience<\/span><\/h2>\nYou can\u2019t assign a dollar amount to the expertise and experience of a long-term agent. Experienced agents can, however, save you money by streamlining the selling process,\u00a0pricing your home at the best price<\/a><\/span>\u00a0for the market, and using their extensive marketing connections \u2014 both through their brokerage and personal network.<\/span><\/p>\n\u00a0<\/p>\n
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![\"\"](\"https:\/\/www.imagineyourhouse.com\/wp-content\/uploads\/2020\/06\/Real-Estate-Agents-are-your-security-blanket-Tweet-1.png\")
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Agents can protect sellers<\/span><\/h2>\nAn agent\u2019s expertise could prevent costly errors in contracts or negotiations. Having an agent that has worked in the industry for several years \u2014 if not decades \u2014 will help you feel at ease. There\u2019s a lot at stake and\u00a0potential legal issues may arise<\/a><\/span>\u00a0if certain paperwork is not filed correctly or other mistakes are made.<\/span><\/p>\nAn agent will carry errors and omissions insurance, which covers any potential mistakes an agent would inadvertently make. FSBOs, on the other hand, don\u2019t have such protections and may not have the experience or know-how to make sure things are done exactly right.<\/span><\/p>\n\u00a0<\/p>\n
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Bottom Line<\/span><\/h2>\nIt may be tempting to try to save where you can when selling your home, but it\u2019s best to\u00a0trust the experts<\/span><\/a><\/span>\u00a0<\/span>when you\u2019re dealing with real estate.<\/p>\n
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\u00a0<\/p>\n \u00a0<\/p>\n FSBO homes typically spend\u00a0more time on the market<\/span>\u00a0b<\/span>efore a buyer is found and the sale is closed. On average,\u00a0<\/a>18 percent of FSBOs were unable to sell<\/a><\/span>\u00a0<\/span>within their chosen time frame last year. There are several reasons for this \u2014 the most obvious being marketing.<\/span><\/p>\n While FSBO sellers do have access to popular listing platforms like Zillow, Trulia, or Facebook Marketplace, they\u2019re unable to post to their local multiple listing service (MLS) unless represented by a licensed real estate agent. Exclusion from the MLS means that buyers and their agents who regularly scan these lists will miss the listing, resulting in a smaller buyer pool for the FSBO seller.<\/span><\/p>\n Additionally, FSBO sellers typically overvalue and overprice their home. This results in buyers skipping over the home, as they assume the seller would be unwilling to lower the price to a more reasonable number. Good real estate agents find the sweet spot to make the most profit, while also\u00a0selling the home quickly<\/a><\/span>.<\/span><\/span><\/p>\n Another reason for the delay in the sale of a FSBO home is that these probably have full-time jobs and families and may not be able to keep up with all the interested buyers or expedite paperwork and negotiations like a real estate agent would.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n According to the National Association of Realtors,\u00a091% of sellers<\/a><\/span>\u00a0are assisted by a real estate agent when selling their home. Many that start as a FSBO eventually sign on with an agent in order to sell their home. On average, agents sell homes for 33% more than if the home were listed as a FSBO.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n While on the surface it may seem a seller could save lots of money by listing the home themselves, costs begin to add up. Lots of extras are included when you work with a real estate agent that are often overlooked \u2014 this may include signage, flyers, photography, MLS listing, negotiations, contracts, etc.<\/span><\/p>\n It is true a FSBO seller can save on the commission they would have otherwise paid a listing agent \u2014\u00a0usually around 3% of the purchase price<\/a><\/span><\/span>. The costs add up\u00a0in expensive areas like Chicago<\/span> neighborhoods<\/span><\/span>\u00a0or\u00a0San Diego<\/span>.<\/span><\/span><\/p>\n However, sellers are probably still on the hook for paying the buyer\u2019s agent, which can also be around 3%. Sellers often overlook this cost and think they won\u2019t need to pay any agent commissions. On a $200,000, you\u2019d only save around $6,000 and have to do all the work yourself.<\/span><\/p>\n One often overlooked cost is the expense of being unable to line up your closing date with the date you can move into your new home. While agents are quite skilled at this, it can be tricky to manage if you\u2019re inexperienced and could result in you having to\u00a0pay for storage<\/a><\/span>\u00a0for the in-between time, a bridge loan while you pay two mortgages, etc.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n You can\u2019t assign a dollar amount to the expertise and experience of a long-term agent. Experienced agents can, however, save you money by streamlining the selling process,\u00a0pricing your home at the best price<\/a><\/span>\u00a0for the market, and using their extensive marketing connections \u2014 both through their brokerage and personal network.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n An agent\u2019s expertise could prevent costly errors in contracts or negotiations. Having an agent that has worked in the industry for several years \u2014 if not decades \u2014 will help you feel at ease. There\u2019s a lot at stake and\u00a0potential legal issues may arise<\/a><\/span>\u00a0if certain paperwork is not filed correctly or other mistakes are made.<\/span><\/p>\n An agent will carry errors and omissions insurance, which covers any potential mistakes an agent would inadvertently make. FSBOs, on the other hand, don\u2019t have such protections and may not have the experience or know-how to make sure things are done exactly right.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n It may be tempting to try to save where you can when selling your home, but it\u2019s best to\u00a0trust the experts<\/span><\/a><\/span>\u00a0<\/span>when you\u2019re dealing with real estate.<\/p>\n![\"Selling](\"https:\/\/www.imagineyourhouse.com\/wp-content\/uploads\/2020\/06\/why-home-sellers-shouldnt-fsbo-1.png\")
<\/a>A\u00a0for sale by owner<\/span><\/a><\/span>\u00a0(or FSBO) means a home is being sold without the representation of a listing agent. Instead, the owner sells the home completely on their own, including setting the listing price, staging, photographing, and marketing the home. They also negotiate directly with buyers, or through the buyer\u2019s agent. Selling FSBO is usually chosen to save the seller money by avoiding agent commissions. But, there are some downsides, which we\u2019ll discuss here. Additionally, the seller may not be saving as much as they think.<\/span><\/p>\nFSBOs sit on the market longer<\/span><\/h2>\n
FSBOs sell for less<\/span><\/h2>\n
Hidden costs of FSBO<\/span><\/h2>\n
Agents have expertise and experience<\/span><\/h2>\n
<\/a><\/p>\nAgents can protect sellers<\/span><\/h2>\n
Bottom Line<\/span><\/h2>\n