So you’re getting ready to sell your house. And someone says “Why don’t you just sell it privately?”
On the surface, it may seem like a feasible idea: putting your home up for sale and handling everything on your own. It might be tempting to save on REALTOR® commissions, right? But all too often, sellers eventually realize they are in over their heads and lose money on their sale.
Homes that are For Sale By Owner (FSBO) can and will actually cost you more than you bargained for.
According to the National Association of REALTORS®,
Homes that were sold privately accounted for 10% of all sales in 2021. The typical FSBO home sold in 2021 for over $100,000 LESS than a home sold with a REALTOR®.
Are you prepared to leave that much money on the table? Even if you pay 4-5% in real estate commissions between your listing agent and the buyer’s agent, you’ll still net a great deal more from your sale than if you were to sell privately.
But if that doesn’t convince you, maybe these will help you reconsider:
1. You’re missing out on MANY buyers that will never see your home.
When most sellers list their home privately, they stick a sign on their front lawn and hope that the phone calls just start rolling in. Maybe they’ll make a post about it on their social media (for their friends to see) and that’s it. Outside of their small circle of friends, or the occasional passer-by on the street, nobody is going to know that the house is for sale and what it offers.
In other cases, FSBO properties are listed with “discount brokerages” that promise to put your home on the MLS® (Multiple Listing Service) for a fee. But that doesn’t mean adequate marketing has been done or that your listing will be shared amongst REALTORS® and prospective buyers. Your listing is just quietly sitting on the internet, hoping someone notices it.
2. Some REALTORS® won’t even show a FSBO home to their buyers.
You may not believe this, but some real estate agents don’t want to show their buyers a home that is For Sale By Owner. I want to stress, this isn’t The Kate Broddick Team. But it is hard to deny that some REALTORS® are more likely to shy away from transactions without another trained and licensed agent representing the other side of the sale.
Again, our Team doesn’t agree with this and would be happy to show our buyers any home that meets their criteria. But you may find other agents in town perceive FSBO homes (and their owners) as a difficult and potential problem they actively try to avoid.
3. You MUST price your home right from the beginning.
More often than not, FSBOs will price their home too high from the get-go. Their emotional attachment to the house and its property means they over-value what it’s worth. This guarantees that the home will just sit stagnant on the market until the price is adjusted. And by this time, the price may have to drop even lower than anticipated just to regain some buyer interest.
Working with a REALTOR® from the start means you’ll have comparable home sales, up-to-date market analysis and actual concrete evidence of why your should list your home at a certain price, to gain the most attention.
4. Private sellers may not be the marketing experts they think they are.
How many homes have you specifically marketed to buyers? Do you know all the ins & outs of where you’ll get maximum exposure on the property?
There’s a LOT more to selling a home than listing on the MLS® and putting a “For Sale” sign on the lawn. To really catch buyer attention in today’s market, your home needs to be professionally photographed, a fully edited video tour produced, with multiple online promotions and campaigns spread over a variety of websites & social media.
A licensed REALTOR® knows what will attract more buyers, how the home should be staged and presented to gain the most interest, and garner a higher offer from interested buyers.
5. You’ll need help identifying the best buyers.
More often than not, FSBO sellers are targeted buy “bargain shoppers”. It wouldn’t be unusual for deal hunters to assume you’ll be willing to settle for less money because you don’t have to pay a real estate agent.
A REALTOR® can also tell when a buyer isn’t fully committed to a purchase and they’re just “kicking the tires”. Are they pre-approved for a mortgage? Are they going to be asking for an extraordinary number of conditions with their offer? For Sale By Owner sellers need to understand how to qualify their buyers if they want to avoid getting burned.
6. The art of negotiation isn’t for everyone.
What’s the best way to be flexible for your buyers, and yet still do what’s in your own best interest? Are you caving to their demands for fear you’ll lose the sale? Or are you being too stubborn with your needs to accommodate any of their requests?
There’s truly a fine line to walk when it comes to negotiating a mutually agreeable sale of a home. And if you’re not familiar with the process inside & out, you may be leaving money on the table without even realizing it.
Negotiations don’t always involve going back-and-forth over the price. There are other conditions to consider that could mean the difference from an offer being accepted, to being declined. A REALTOR® is infinitely more familiar with these negotiating tactics.
7. Paperwork is not an option.
How familiar are you with things like a Confirmation of Cooperation document? An irrevocable date? Amendments, Notices of Fulfillment and more? These are all documents you’ll probably encounter if you sell your home privately. And if you’re not familiar with the pages and pages of legal jargon, you could be missing something potentially devastating.
As a FSBO seller, you’re LEGALLY LIABLE for all the documents pertaining to your home’s sale. If you overlook something like a mandatory disclosure or inspection report, you could not only lose the sale, but set yourself up for legal ramifications. And that can be very costly!
In the end, the decision to sell your home with a REALTOR® is yours to make.
But if you’re feeling like you might be getting in over your head, one of our Team of Real Estate Agents would be happy to come assess the situation and give you a free home evaluation. We can help get your listing back on track and in competition with the rest of the houses in your neighbourhood!
Give us a call!