LIST: Things to Know Before Choosing to Sell by Owner
Published | Written by Erin Epperson
At a time where sales are at an all-time high and market inventory is low, a driving selling factor for many is to cut costs and choose the For Sale By Owner (FSBO) route. The thought of not paying a commission is enticing, but there are pros and cons to choosing to list FSBO. It is always advised you entrust in a local agent throughout the process. Selling your home is one of the most costly and important transactions you can make in a lifetime and it's vital the process is handled in a thorough and legal manner from the start. Please continue reading for a breakdown of what it means to choose the FSBO process.
[PROS + CONS]
Pro: No Seller's Commission
Perhaps the most obvious reason sellers are tempted to choose to take on the home selling process themselves. Do consider paying your buyer's agent's commission, however. This is a standard practice and opting not to do so limits your buyers pool greatly. After all, A buyers agent will not bring their buyer to a home that isn't offering paid commissions, otherwise, they wouldn't get paid. The only way to avoid this situation completely is to either find a fully qualified buyer also willing to pay their agent's commission, or find a buyer who doesn't have agent representation. Again, adding specifications to your buyers pool, limits it.
Pro/Con: Management of Marketing, Showings, Open Houses + All Aspects of a Sale
For anyone with prior selling experience, whether that be you were once an agent yourself or you have sold your own homes in the past, this may feel like a breeze. You're in the drivers seat calling all the shots as you see them and making all of the decisions as they come. You have no one advising you on "best practices." For those selling their home for the first time, all of the components and moving parts can be overwhelming. The longer a home sits on the market, the more expensive marketing the home becomes, and the less potential buyers want to pay you. You should also consider this eats up more of your personal time.
Con: Minimal Networking Experience
Real estate agents have connections with agents in their brokerages, agents outside of their immediate network, international connections, past clients and regularly attend community events + networking socials. This is a high priority and a pertinent component in their everyday job as a real estate agent. This is a characteristic many sellers don't possess on their own.
Con: Selling is a Full-Time Job for Agents for a Reason
As mentioned before, when you sell your own home you are taking on the full responsibility of all aspects of the sale. In addition to the time spent selling your home, you're also in the process of looking for your next move on top of your usual commitments to work, family and friends.
Con: Beware of Bargain Hunters
People looking to score a good deal often gravitate towards a For Sale by Owner with the expectation that the home is already below market price and that they can get that price tag even lower. You will spend a lot of time in negotiations with individuals that you can never convince to match your needs.
Con: Access to Tools
Once your home is priced, it's hard to retract. It's imperative to get the price right the first go around. A realtor has research tools that allow them to compare your home to others like it that have just sold, or are currently active on the market. This is just one of the many market analysis conducted before pricing a home on the market.
1. Price your Home
2. Stage and Repair the Home for Sale
3. Market your Home Online & in the Area and Host Open Houses
4. Negotiate with Potential Buyers (make sure you have all paperwork needed via your real estate agent, or a real estate attorney should you choose FSBO)
What are your thoughts on the state of the market right now? Do you have any questions or concerns regarding its future? We want to hear from you! Drop your thoughts in the comments below.