One of the main reasons people try to sell their house without the assistance of a Realtor is commission. For some reason it irks people to have to pay commission for something they believe they can do on their own. Many can and are successful, but it can be a dangerous practice if you try to do it yourself.
There are some major risks with going FSBO (For Sale By Owner), from a lower sales price to landing in legal hot water.
Before you pursue this route, here are a couple things to consider when contemplating selling your home yourself, according to Patrik Welty, owner/broker of Legacy Realty Professionals in Fenton.
It is important to consider security.
“When real estate agents schedule a showing on your home you usually do not know the buyer but we capture the name, company, phone number, and license number of the agent showing the home,” Welty said. “When a FSBO gets a call from a potential buyer they have no idea who they are meeting.”
A Realtor will qualify buyers.
Welty said, “A buyer will rarely tell a seller about their financing or the lender they are working with. Although there are some buyers that play it close to the vest with their personal information, most agents collect the pre-qualification or pre-approval letter in advance from the buyer they are working with. A good agent also is familiar with which lenders are best at qualifying buyers and bringing the deal to a successful closing.”
Negotiating a deal takes training.
“Studies have shown that even sellers that are well informed, and price their homes with the assistance of an appraisal or a competent market analysis, tend to lose more than what they would have paid a real estate agent in the negotiations,” Welty said. “Most sellers are not trained to negotiate and buyers take advantage of that fact.”
Real estate professionals have the power of marketing.
Welty said, “Today there are a number of online locations where sellers can advertise their homes but these are inferior to the exposure an agent can get through their Multiple Listing Service and the many websites that their data is syndicated to.”
According to realtor.com, one key thing a real estate agent will do for you is create an eye-catching ad for your home, with attractive photos and a winning description that will reel in buyers. Sure, you can probably cobble together your own ad, but there’s one thing you absolutely can’t do if you go FSBO as Welty said, which is post that ad on the multiple listing service.
Carol Ray, associate broker with Berkshire Hathaway Home Services (Michigan Real Estate) in Fenton said, “A Realtor’s knowledge is priceless. In reality, a home sold by a Realtor will net a higher sale price than a FSBO.
“FSBOs will sacrifice time and energy showing their home to unqualified buyers and ‘door-kickers,’” she said. “Also, they are opening their doors to strangers.”
Ray says Realtors have many marketing tools and resources to assist such as appraisers, home inspectors and great handymen that can do minor repairs. “Relocation is a consideration,” Ray said. We work with corporations moving employees on a daily basis. Employees relocating do not have the time or knowledge of an area to consider a FSBO. Our goal is a successful sale.
“Great agents spend hundreds of dollars of their own money to market, stage and hire professional photographers in order to sell your home,” Ray said. “If it doesn’t sell we are out the time and money, not the homeowner.”
Tammy Tipton, associate broker for New Michigan Realty (Tammy Tipton Team Realtors) in Fenton, summed it up when she said, “We work for you and with you. We are strong negotiators and get the deal done right for you.”
Safety should come first, Tipton said. “You don’t have to show strangers or non-buyers homes, we do that all for you. You will save time and frustration,” she said.
“We know the market,” Tipton said. “Even though you pay a commission to a Realtor, you end up with more money and less stress at the end of the day. We’re strong negotiators and will get you the most money possible.
“We do this every day so we know the ins and outs and trust me it can be stressful, but not for you,” she said. “We can get you where you’re going. Most of the time you are selling to buy and we can coordinate both sales for a very fun time. Which home buying should be — fun!
Tipton said 90 percent of FSBOs end up using a Realtor.
Other FSBO pitfalls
According to realtor.com, pricing a home can be far more challenging than most FSBO sellers assume. The majority of sellers price their homes based on emotions and what they think it should sell for. A real estate agent, by contrast, will provide an accurate home value based on a solid market analysis.
Selling a home is fraught with legal pitfalls that only a real estate agent will know. As such, when you choose the FSBO route, you could do something that skirts the law but not even know it. Disclosure requirements may be the most likely issue. Most states, maybe all of them, have requirements involving seller’s disclosure of defects in the property.
Even if your FSBO listing gets an offer that you accept, you could be dealing with a buyer who can’t get a loan, which means you’ll have to start back at square one. A real estate agent will confirm a buyer is pre-approved for the correct loan amount, and then will ensure there is an airtight contract in place so the entire process will proceed smoothly.