5 Reasons You Should Not For Sale By Owner

Dated: 12/30/2017

Views: 297

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In today’s "sellers market", with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, as a for sale by owner or FSBO as it is known in the industry. 

Here are the top five reasons why this might not be a good idea for most home owners selling their home:

1. Exposure to Prospective Buyers

Recent studies have shown that 87% of buyers recently purchased theirhome through a real estate agent or broker, and sevenpercent purchased directly from a builder or builder’sagent.  In contrast, only eight percent of recent home sales were FSBO salesagain this year. For the third year, this is the lowest sharerecorded since this report started in 1981.

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 51% on the internet

  • 34% from a Real Estate Agent

  • 9% from a yard sign

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. 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

  • The buyer’s agent 

  • The buyer’s attorney 

  • The home inspection companies

  • The termite company

  • The buyers lender

  • The appraiser

  • The title company

  • The town or municipality

  • The buyer's buyer

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

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

Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

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