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Are you considering selling your home? If so, the for sale by owner (FSBO) route may look enticing. You won’t have to pay real estate agent commissions and additional fees, which can reach up to 10% of the home’s total sale price. Plus, there are plenty of online tools that make it easy to list and advertise your property.
For sellers who are highly motivated and willing to put in the effort, FSBO can be a feasible option. Research shows that FSBO homes sell more quickly than agent-assisted listings, with 58% sold in less than two weeks.
Still, inexperienced sellers can run into many issues, many of which are costly. Is FSBO the right route for you?
What FSBO Pitfalls Can Inexperienced Homeowners Run Into?
While selling your home yourself may seem like a good choice, you can run into challenges that may cost you time and money. Below are a few examples.
You Won’t Gain As Much Exposure
Real estate agents know how to market a house for maximum exposure. They take care of professional photography and print and online advertising. They also have connections with other agents and can list your home on a multiple listing service (MLS). If you decide to take on the task of selling yourself, you may find fewer potential buyers making offers.
You Won’t Make As Much Money
Typically, if you sell your home on your own, you’ll make less money than if you use a real estate agent. In 2019, FSBO homes sold at a median of $200,000, while agent-backed homes sold at $280,000. That’s a considerable chunk of change you could miss out on by deciding to handle the sale alone.
You Won’t Have As Much Free Time
With an agent, all you have to do is follow their instructions and let them take care of the rest. They respond to buyer inquiries and attend open houses.
When you choose the FSBO route, you now have all of this responsibility. You’ll dedicate your weekends and after-work hours to showing off your property and posting online, meaning date night will have to go on the backburner.
You Won’t Know the Right Price
There’s a science to determining a home’s sale price, and statistics show that calculating the right value is the most challenging task for FSBO sellers. If you price your home too high, you may get no bites from interested buyers. If you price too low, you could lose out on money. A Realtor, on the other hand, will perform a comparative market analysis before they list, finding the sweet spot.
You Won’t Have Negotiation Experience
A seasoned real estate agent will know exactly what to expect when a buyer makes an offer. You, however, may not know how to respond. What terms and conditions could be disadvantageous to you? How can you negotiate in a way that keeps buyers in the running — and allows you to milk a bidding war? Agents can strike a balance between protecting your interests and getting a final agreement.
You Won’t Have Inspection Know-How
When a potential buyer looks at your home, they may request an inspection or repair. What kind of inspections can you expect? What kind of repairs does the seller usually handle? How do you know if you’re getting a bad deal?
Selling a house without a real estate agent can mean you’re out of your depth here. An experienced real estate agent will know the answers to these questions. Plus, they’ll have a list of trusted repairmen they can turn to at a moment’s notice.
You Won’t Remain Completely Objective
When you hire a real estate agent, they’re entirely objective to your property, meaning they can make reasonable decisions without letting emotions get in the way. They’ll calculate the value and try to get the best deal possible.
You, however, will likely have some attachment. It is your home, after all. Because of this, you may ask for more money than you’ll probably get or turn down reasonable repair options. In the end, you could miss out on a sale.
Is Selling a House Without a Real Estate Agent a Good Idea?
If you have a lot of motivation, marketing finesse and free time, you could sell your home on your own and get a great deal. However, for most people, using the services and expertise of a real estate agent makes sense. The right agent will save you time, money and plenty of headaches.