When thinking of selling, most people wonder, “Should I try listing for sale by owner?” Many people think that they can do it themselves and save money….only that’s not usually the way it works out. There are many benefits to listing with a real estate agent. Read on to discover the debate of real estate agent vs. for sale by owner (FSBO).
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FSBO thought #1
“I will save so much money by selling my home For Sale By Owner.”
The main thing that FSBO’s think that they are saving is the 5-6% for the realtor commission. Let’s say it’s an even 5%. The listing agent keeps 2.5% and gives 2.5% to whomever the buyer’s agent is.
Now, even when listing for sale by owner, most buyers are working with a real estate agent – and prefer to. So, you will most likely still have to dole out 2.5% to a buyer’s agent. If you won’t work with realtors at all, you are cutting your buyer pool down tremendously. So, you’re really only saving 2.5%. Not 5%. The majority of buyers have buyer’s agents, and if you aren’t willing to work with a buyer’s agent, they will not show your house.
Also, according to the National Association of Realtors (NAR), a home nets – on average – 10-30% higher profit with a real estate agent than for sale by owner. This is because the marketing, networking, and understanding of the market that realtors have. So by selling with an agent, you are ending up with more money in the long run. Selling faster also ensures that you are moving on to your next adventure quicker – and not continuing to pay on your mortgage and taxes while you wait for your home to sell. Sure you have to pay the commission, but you are still keeping more money in your pocket & moving on quicker.
FSBO thought #2
“I can market my house myself.”
Sure you can. But will you really do all that a real estate agent can? Real estate agents get homes professionally photographed, order brochures for showings, advertise on social media, e-mail other agents & offices, send out just listed cards, promote on 700+ websites (at least my company does!), and do print ads. All of this is coming out of the agent’s pocket before you pay a dime anywhere. You don’t pay for the advertising and marketing – it’s part of the commission. And they don’t get the commission unless your house sells!
Agents also have interested buyers at their fingertips. They may have their own buyers they are working with, or know another agent who does. Networking in their office and with other agents is a key resource for them.
What about the MLS? That’s become the main spot that homes are found these days. Zillow pulls all of their information straight from the MLS (multiple listing service). Realtors put the information of each listing straight in to the MLS. I belong to 2 MLS’s here in NJ. That alone reaches thousands upon thousands of potential buyers in our area.
A professional sign in your front yard is also going to be perceived as more serious than a “For Sale By Owner” sign. Many people will think that you are just trying out the market, or not very serious about selling when listing for sale by owner.
Of course there are For Sale By Owner pages that you can list on and add your pictures to. But, most buyers just aren’t looking there. And neither are their agents.
RELATED: How to Find the Best Realtor for You
FSBO thought #3
“I know what my house is worth.”
Unfortunately, many home owners really don’t know what their house is worth. I’ve had just as many home owners that think their house is worth the moon, as owners that didn’t think their house was worth peanuts. They were happily surprised to hear that in the market they were in, it was indeed worth more than they ever imagined. The other owners who thought their house would go for more were disappointed to say the least.
Real estate agents do a CMA (comparative market analysis) on your home to ensure you can see where the numbers are coming from. They compare similar homes that sold in your area in the last year and take into consideration the condition, location, market, age, and improvements done to your home.
Many home owners get caught up in “what they’d like to get” for their home instead of what it’s actually worth. Maybe you did spend too much money on upgrades. Or you shouldn’t have gotten rid of that bedroom to have a ginormous master bathroom. A second mortgage is not usually a good idea. Just because you grew up here doesn’t make it’s extra special to anyone else.
Home owners make a lot of decisions for their time in the home and not for resale. They aren’t always the best decisions and can negatively affect your home’s worth. While it can be hard for an owner to see that, a real estate agent can help you understand and navigate towards the best selling price.
Trying to put your For Sale By Owner home on the market too high is just going to make it sit for a looong time. On the other hand, not knowing the true worth of your home could leave you with far less than you could have gotten for your house. Pricing right for your market will do wonders for selling quickly and for the most profit. A real estate agent can help you with that. Sometimes there is just too much emotion attached when doing a FSBO.
RELATED: Sell Your House – How to Dominate the Market
FSBO thought #4
“I can do this all on my own.”
Now, let’s not forget that a real estate agent literally does this as a job. You most likely have a job that takes up most of your time. It’s hard to do it all yourself when listing for sale by owner! You want to hold your own showings and Open Houses in your free time? Do you know all of the paperwork that goes along with it? Incorrect paperwork can lead to lawsuits and worse. Do you really want to be responsible for all of this? Realtors are insured by E&O insurance (errors and omissions insurance) for when times get rough.
The real estate agent acts as a “buffer” between the buyers and the sellers. Many buyers do not want to deal directly with a seller. They also don’t like going to owner Open Houses, because it’s just awkward. It’s better to keep things separated and let the agents handle Open Houses, negotiations, and keeping things running smoothly. Give yourself time to breathe. Selling a house can be stressful – let your agent take care of everything!
Real estate agents can also give you guidance and advice. Sometimes people may be excited to list and do tons of upgrades that weren’t really needed or go with a style that’s too particular. Spending too much money on things that you won’t get the money back on is a waste. They can also guide you if you need to stage the home, and what simple and quick updates you should do to get the house ready. Like I said – this is their job. They do this all the time!
Closing Thoughts
I know that since I’m a Realtor, this post may seem biased! BUT, I’ve seen it so many times! FSBOs on at the wrong price, sitting for so long – then finally listing with an agent. Just do it from the very beginning. Save yourself the hassle and give yourself a break! Have your agent take care of everything and you can sit back, relax, and wait for the offers to come rolling in.
