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The United States is a country built on the concept of DIY. Colonial settlers in the early days of our country’s history constructed their homes from materials found on the land. They made home ownership a major component of our American psyche. Even today, having a home of your own is a cornerstone of the American Dream.
Pluses and minuses of selling your home yourself
For Sale By Owner homes with hand lettered signs offering the property for sale are spotted in neighborhoods all around our community. Called FSBOs for short, these properties are marketing by their owners. According to the National Association of Realtors, “FSBOs accounted for 8% of home sales in 2015. The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sales.”
People going FSBO are not without support. To help individuals taking the FSBO route market their homes, there are websites and products to help them. Tools such as Zillow’s Make Me Move Price which allows you to list your home and set your ideal price and websites like ForSaleByOwner.com offer people the support to market their homes. But, are these tools likely to help owners get the best prices for their homes? Do they lead to the best marketing? Do they lead to quicker sales?
When is saving money not a bargain?
People who go FSBO claim that they choose to represent their own homes for sale because they prefer to save the money they might pay to a Realtor®. Despite making this choice to save money, they might be losing money.
Realtors offer marketing savvy, knowledge about contracts and disclosure
Charleston Realtor Kristin Walker shared her thoughts regarding FSBOs during a recent conversation. When asked if FSBOs save sellers money, she said, “Not necessarily because often they (FSBOs) price their home using Zillow and if they go too high, they get no action.” She also notes that a Realtor’s “local knowledge” allows them to successfully price a home. Realtors know “facts about the current market” and comprehend features, benefits, or aspects of the listed house that are sales advantages or can cause issues. Understanding both positive and negative aspects of a property combined with local knowledge yields a better pricing and marketing strategy.
Many FSBOs, Walker says, lose money because “without the massive exposure that the MLS and Realtors yield, properties for sale do not draw the volume of attention from prospective buyers — attention which can lead to multiple offer situations that drive higher prices.”
There is a lost time cost to factor into the equation. First there’s a real estate marketing learning curve plus with most of us working full-time in another field more than likely time is limited. It is going to take you longer to determine what activities to undertake to sell your property than it does a Realtor. Realtor’s already know what to do. It’s part of their strategic approach to marketing your property.
Another concern for a seller representing themselves is centered on the legal requirement to disclose issues related to your property. Walker points out “the possibility of exposing yourself to a lawsuit because you did something you didn't know you shouldn't do or failed to disclose something you should have.”
Do you know how to qualify a potential buyer?
If you’re selling your property yourself, how do you know who is safe to invite into your home for a showing? How will you vet people? Walker says there is a real risk in opening yourself and your home to a buyer who has not been qualified. She points out that entering a contract with a buyer can also entail a huge risk: your property is off the market, and you don’t have the ability to be assured they have the finances to go to closing.
Not paying a commission, may not save and cost you in the long-run
It all comes down to false economies. Do you sell your home yourself and save a bit of money while having to learn everything a Realtor already knows and learn all the legalities of selling a home? Or would you rather have professional representation and achieve a stronger sale price which comes from knowledgeable marketing from a real estate pro?
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