Putting your property on the market as a ‘for sale by owner’ (FSBO) is a big mistake for most people. While do-it-yourself projects are a great way to save money in many cases, it simply is not advisable when it comes to something as complex as selling a home. You need the services of an experienced professional, and even a Brookfield real estate attorney, as well, to help you through the process. Leave the do-it-yourself projects for smaller household repairs. Get yourself a qualified real estate agent.
Selling on Your Own Rarely Saves Money
The big temptation of FSBO is the promise that you could save a lot of money. Trying to save money wherever you can is certainly an understandable impulse. However, unfortunately, selling your home on your own is unlikely to save you much, if any, money. The National Association of Realtors (NAR) conducted an extensive study of home sales in the year 2015. During that period, the average
FSBO home sold for $210,000. This is in sharp contrast to the average sale price for real estate agent assisted sales, which was $249,000 during the same time period. With that large of a gap, it is clear that real estate agents often more than pay for themselves. The simple fact is that it is very difficult to sell your home for as much as an experienced real estate agent will be able to fetch. This is true for a variety of different reasons. First and foremost, most homeowners are not professionals. They lack the knowledge and experience needed to price and move a home for maximum value. Additionally, they are forced to sell to a much smaller market.
Most Homebuyers Avoid FSBO Sales
According to NAR, FSBO sales only accounted for 8 percent of total home sales in 2015. Clearly, that is a very small share of the overall market. This leads many homebuyers to avoid all FSBO sales as a rule. From the perspective of a homebuyer, they are simply eliminating a small fraction of possible homes as a starting point. They still have 92 percent of the market to choose from. However, from the perspective of the seller, they immediately lose a large portion of potential buyers. From there, they are generally left with more ‘thrifty’ perspective buyers who are willing to buy from an owner, but would like a significant discount for doing so. This means that not only do FSBO homes tend to linger on the market, but when they do finally get offers, those offers tend to be underwhelming.
FSBO is a Lot of Work
When going the FSBO route, you are starting off in a hole. You have a smaller market to work with, and less eager buyers. Beyond that, you will also need to invest a considerable amount of time to sell your home on your own. Without the pre-existing network that a real estate agent has, you will be forced to put a lot of work into marketing your home. Posting a few craigslist ads will not cut it. Additionally, when you finally do secure a homebuyer, you will have to deal with the complex negotiation and closing process. Many issues can arise during this stage, from financing problems to a buyer dropping out at the last second. There are many potential legal problems that you may have to deal with. There is no reason to subject yourself to those stresses. A qualified real estate agent is well worth the investment.
Guest Blog Post by Jordan Herring, OBO J Peterman Legal Group Ltd