I am sure you are thinking that as a Realtor that I would want to deter anyone and everyone from listing their house as a For Sale By Owner, after all this could be seen as one less opportunity for me as a listing agent. On the contrary, having recently contemplated this myself I can tell you that everyone should consider selling their house by themselves as a viable option. Although the trend is declining there are still plenty of resources available and even companies that will act as pseudo agents to give you the tools and exposure you need to get your house on the market. The obvious question then is why do we have Realtors if we can do it all by ourselves?
There are many differences between FSBO and the services offered by a licensed Realtor, and no matter how you spin them they all ultimately boil down to an evaluation of time and money. Let me share what I think are the three most important factors in selling a home FSBO:
1) Days on Market- Past sales data confirms that FSBO homes will take 20 to 90 days longer to sell with the shorter time period being recorded at the height of the housing boom. This impacts the success of selling in many ways but probably the most important for sellers is that we are usually forced into selling our home because of a pressure to move quickly such as a job transfer or outgrowing your current home. The longer we are tied to our old home the longer it takes for us to reach the desired change.
2) Selling for top market value- On average FSBO will return 20% less on the sale of a home compared to a realtor assisted sale. Some will argue that this loss can be offset by the savings of not paying the realtor commissions but most realtor commission’s range between 5%-6%, which means a lot of money left on the table. We should also not overlook that there are costs associated with FSBO that can vary greatly depending on how creative your marketing strategy and the fees associated with using third party services.
3) Formalities of Real Estate- This will be the most challenging factor for many of those people wanting to sell their own home. There are not too many of us who are comfortable with such things as writing contracts or negotiating a price with buyers. These can be complicated and contentious interactions. It can also be difficult to know if you have met all the many legal requirements and prepared all the right documents to protect yourself in the transaction. You can obviously solicit the services of an attorney to help but you may not have the connections and contacts to know who will do the best job.
These are only some of the issues to consider but I do believe that for some FSBO could be a legitimate alternative. The pressures of your personal situation will determine how viable this option will be but I would encourage anyone to start with all the options on the table and narrow down from there. There are no realtors who will reject a listing if things don’t work out so why not give it a go if you can?
Written by Nitan Soni