In the current market, homes in many areas are selling quickly, so it makes sense that some homeowners may opt to sell their house themselves instead of enlisting a licensed realtor. The primary reason people choose this method is profit. By saving the average six percent sales commission, many feel like they’re walking away with more money in their pocket, and while this may be true for some sales, its definitely not the norm. Here’s a few things to remember about listing a home For Sale By Owner (FSBO) versus using a licensed realtor.
Pricing — This is the trickiest part of listing a home and the most important. If the price is too high, buyers won’t be interested, but if its too low, the seller is giving away money. Real estate agents have experience finding a home’s sweet spot in the market by comparing it to recently sold homes in the area, the quality and age of the home and how well its been maintained. Many times FSBO homes are priced too high and can linger on the market longer, which then gives the home a stigma that something could be wrong. A home is most likely to sell within the first few weeks of it being on the market.
Showings — The idea of showing a house sounds easy, but there’s really a fair amount of work involved. For example, it’s a good idea to try and weed out people just wanting to browse, from those who are legitimately interested in purchasing. Then, there’s the scheduling of the showing, cleaning and possible staging that needs to take place. The biggest drawback to showings with a FSBO home is the potential for the seller to be present. Many buyers feel uncomfortable sharing feedback with the seller, whereas an agent serves as third party to receive comments.
Approving the buyer — Just because a potential buyer puts an offer in on a FSBO home, it doesn’t mean they’re qualified and have the funds to afford it. Realtors work with lenders to confirm that buyers have the funds available and are approved for a mortgage. It’s a waste of time and effort to go through the motions thinking a house is sold only to learn the buyer can’t afford it.
Paperwork — In Indiana, buyers of homes built before 1978 are encouraged to pay for a lead-based paint test, and radon tests for any property with a basement. If neither party in a FSBO transaction have an agent, its important that the seller be knowledgeable on what’s legally required to close, including the proper inspections, disclosures and tests. A standard real estate disclosure form allows sellers to identify any known defects in the home, including major systems, roof, mold and water damage, among other details.
Marketing — With so many listing sites and social media available, its easy to think that by posting a home FSBO, with or without an MLS, will get it sold, but agents also use their network to garner attention. Its common for an agent to contact other realtors and let them know a new property is for sale, and many also send notifications to their network of potential buyers letting them know when new houses are available.
Selling a home by owner can require a lot of work and research on behalf of the homeowner, and for working families or people with busy schedules, saving the commission may not be worth the potential headache. Real estate agents are here to help make the home selling process easy.
Samantha Evans is a licensed realtor and broker with Whalen Realty Group, which has more than 10 years of commercial and residential real estate experience. She is a member of MIBOR. She can be reached at [email protected]. Send comments to [email protected].
