For Sale By Owner or Through a Realtor?

by Jessica Brita-Segyde

To FSBO or not to FSBO? In a market where listings are scarce and buyers are plenty, selling a home by owner may look like an easy option. Not so fast! Take a moment to consider all that goes into marketing, selling, and transferring a home before you decide whether or not to go it alone. Taking on the stress and time of a for sale by owner endeavor might not be worth the single-digit percent you could save on a professional’s commission fee. Listing agents (Realtors who represent sellers) do a lot of things for an extended period of time to earn their pay. Plus, they only get paid if and when they broker your home at a price you approve. Read on for the topics that a seller should consider when determining whether to sell by owner or hire a real estate agent.

Market Research

An experienced real estate agent knows his or her market. The internet can only go so far in selling a home. Ultimately, someone has to see it, want it, agree to a price and several dozen other contract terms, pay for it, and take possession. This is not a simple process and there will be more than a few bumps in the road. Professional marketing is essential to the process. Presenting your home at its best will bring in more buyers who are willing to pay full value for the property. The internet does have a place when it comes to research and marketing, but it does not replace the knowledge, skill, influence, and work ethic of an experienced Realtor.

Pricing Decisions

Real estate professionals have the tools, knowledge, and experience to properly price a home. According to data from the National Association of Realtors (NAR), homes listed with a real estate agent sell for an average of 35% higher than FSBO properties. This increase in price/cash at closing for the home’s seller far surpasses the single-digit commission fees charged by most Realtors.

Agents know their markets and will price your home to sell with the highest net gain possible for their clients. Expert pricing combined with professional marketing will result in the best deal for a seller. Here are a few scenarios that could occur when an FSBO is priced incorrectly:

  • The seller might undervalue the home and accept a lower price than the home is actually worth. The buyer may have a Realtor representing them and the buyer’s agent is under no obligation to inform the seller that his or her home is underpriced.
  • The seller might overvalue their home and ask too high a price. In this case, homes sit on the market and “go stale.” This ultimately creates a stigma on the property and increases the likelihood that offers, when they finally come, will be lower than fair market value for the home.
  • A seller might overprice the home, accept a high offer, then discover that the appraised value is lower than the negotiated sales price. This can be a stressful situation for all parties and results in a renegotiation of the offer, or worse: A re-listing of the property.

You Already Have An Offer: What Could Go Wrong?

Trying to sell on your own means you’ll do everything on your own. If real estate isn’t your day job, selling FSBO could make for a long, time-consuming process (and a lower sale price as described above). Following are some of the tasks an FSBO seller can expect to do:

  • Cleaning
  • Photographs and editing
  • Marketing
  • Web placement (at a cost)
  • Signage (at a cost)
  • Scheduling and preparing for closings
  • Ensuring COVID-safe protocols are followed in accordance with state regulation
  • Phone calls, texts, emails, door knocks at any time of the day or night
  • Negotiating with buyers and/or agents
  • Interpreting preapproval letters
  • Writing your own contract
  • Interpreting contracts and addenda
  • Proper handling of earnest money
  • Appraisal and inspection responses
  • Ordering a title search
  • Transfer of title
  • Closing documents
  • Post-closing calls from the buyers when questions or issues arise

Also, know that real estate agents can see and sometimes prevent problems before they happen. Issues with property boundaries, flood insurance, and structural defects are all common occurrences in the real estate industry.

Do you want to interview a few Realtors to see if the professional route is right for you? Contact Ruoff Mortgage for a referral to a great agent in your area!


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