In this do-it-yourself age, it’s no surprise that many consider selling their home on their own when they’re ready to move on. There can be some big benefits: lower cost; more control; a chance to “test the waters”, but there are also plenty of pitfalls. In the US, For Sale By Owner (“FSBO”) transactions accounted for 10% of home sales in 2011, but sold for significantly less on average (up to 25%) than assisted home sales by agents. [1]Aside from the possibility of a lower sales price, consider the following if you are considering listing your home on your own:
Time and effort involved
Roll up your sleeves and prepare to spend a lot of time preparing your home, researching the market, developing sales strategies and marketing materials, answering calls, showing your home, and finally managing negotiations and paperwork. Estate agents have well-developed tools and typically have a team of resources to count on, including front desk staff who may be available 24 hours a day. It all sounds easy, but the work is surprisingly detailed and complex, and mistakes can be costly.
fair price
Pricing it right can be challenging for anyone, but when you’re emotionally attached to a property, it can be even more so. Too low and buyers may be suspicious; too high and your property will sit while others around you sell. Real estate agents rely on current and historical market data along with industry and marketing expertise to help set the right price for a motivated seller. The right price for a well-organized home can have a significant effect on attracting a large number of qualified buyers; and that leads to a sale.
Legal and financial implications
How much should you disclose about that leak or buried wiring? What about the well and septic system? The knowledge and paperwork involved in crafting a secure and binding sales agreement that protects both parties is considerable. Professional real estate agents, their associations, and their brokers have the necessary training and experience to identify potential problems along with contractual language developed to help ensure that your interests are secure. Important issues that are not visible and not disclosed can lead to litigation and other costly consequences. Missing clauses in a contract can have the same costly effect.
Needless to say, there are many FSBO success stories, however, we’ve all seen FSBO signs linger in a front yard for what seems like months before being replaced by a real estate agent’s sign. If you have time on your hands and want to “test” the market, a FSBO strategy may work for you. But if you are a motivated seller with a deadline and the best price in mind, then perhaps a real estate agent is your best option. I have worked with more than one FSBO client who was exasperated with the process: “…never again!”
[1] National Association of Realtors, 2011
