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The Hidden Horrors of Going FSBO (For Sale by Owner)
So you’re thinking of selling your home?
Placing your home on the market and successfully finding a buyer who is willing to purchase your Port St Lucie FL home for sale requires a lot of hard work. Without proper guidance, it can quickly become a complicated process.
Many home sellers have considered skipping the real estate agent to save on closing costs, but very few have actually succeeded in seeing those savings. There’s a good reason: the average homeowner doesn’t have the rigorous training and real estate knowledge that a licensed agent does.
Before we talk about what makes For Sale By Owner (FSBO) such a bad idea, let’s first discuss why some sellers choose to sell by themselves.
Top Reasons Why Sellers Choose FSBO
1. The number one reason why many people choose to sell their home solo is to save money. This is because most real estate agents charge about 4% to 6% of the selling value as commission.
Some sellers believe that by going FSBO, they will be able to save thousands of dollars. However, this is easier said than done. In fact, according to the National Association of Realtors, more than 90% of all for sale by owners end up hiring a real estate agent.
2. Another reason why some sellers choose to go FSBO is so that they can have complete control over the sale. Without an agent, they don’t have to listen to anyone’s opinion about how they should market the home, how to price it, how to negotiate, and how to make decisions regarding the home sale.
3. Some sellers also choose to go solo because completing a home sale without the help of a real estate agent can give a sense of accomplishment. Since the owners know their house best, it will be easy for them to focus on the good aspects of the house and highlight their property’s best features. In addition, with an FSBO sale,
However, the truth is that the disadvantages of selling your home with a real estate agent far outweigh the benefits of going solo. From incessant inconveniences to costly paperwork mistakes, here are a few of the horror stories that FSBO sellers inevitably encounter.
The Daunting Task of Marketing Your Home
It takes more than a “For Sale” sign in your front yard to make buyers notice your home. According to the National Association of Realtors, 95% of buyers use the Internet in their home search.
This means that online marketing — starting with listing your home on the local listings database, sharing your listing to dozens of social media platforms, and advertising your listing on numerous websites with a global audience — is essential to selling your home.
While you might be able to post your home on facebook and Craiglist a few times, without an agent, you will not have any access to the ultimate home selling tool – the MLS. A multiple listing service (MLS) is a marketing database set up by a group of cooperating real estate brokers to provide accurate and structured data about properties for sale. It is also the way to get your home listed on sites like Realtor.com, Zillow, and Trulia.
Without an Agent, Home Marketing Isn’t Cheap
This is where it gets expensive: yard signs, newspaper ads, brochures, high-quality photographs, and a professional-looking website — things real estate agents have at their disposal — are your responsibility to finance and maintain when you have to do your home’s marketing yourself. Since most buyers start their home search online, you are unlikely to get the exposure you need if you try to sell without the help of an agent. FSBO sellers would have to spend big bucks on advertising and still might not reach the most important audience.
However, if you decide to work with an agent, you will automatically receive widespread exposure for your listing through the multiple listing services.
Incorrect Home Pricing: The Ghosts of Lost Profits
Even after all that marketing, FSBO sellers don’t actually make more money. In fact, many lose money.
The research backs it up: the National Association of Realtors reports that the average home sold with an agent sells for $240,000. FSBO homes, however, sell for only $185,000. What you could save in commission you lose by pricing your home incorrectly or skimping on the marketing.
Without an Agent, Finding the Right Price is Impossible
Pricing your home incorrectly when you list it can be the worst mistake you can make as a seller. It can greatly affect the number of days your home will stay on the market and its final sales price.
If you price your home too low, it will send a message to the buyers that there might be something wrong with the property. In the same way, if your home lingers on the market, it can also signal a negative message and can ultimately mean less money upon the final sale.
Real estate agents, such as myself, have more tools and resources, plus an intimate knowledge of the local housing market, so we can spot a wrongly priced listing from a mile away. FSBO sellers, however, have only limited access to home value tools and resources about past sales activity.
So how do real estate agents set the right asking price for a home? Here are several things we consider when coming up with a price tag for a property:
1. Past sales
To come up with the right asking price, we review the sales history of an area over the past six months. This provides us insights into what buyers are prepared to pay for homes situated in a particular neighborhood. We also consider the time homes spent on the market as well as the gap between the initial asking price and the final selling price.
We use a comparative market analysis (CMA) to accurately determine the value of a home. We gather information and statistics from different sources and compile them together to conduct an in-depth analysis of a home's worth in today's market.
2. Market Trends
We also consider certain factors such as interest rate decisions, access to finance, government policy, and unemployment. These elements can affect the neighborhood and influence the perceived value of a property.
3. The neighborhood
Location and neighborhood have a lot to do with the perceived value of a home. If a seller’s home is situated in a neighborhood of run-down homes or noisy neighbors, it can negatively affect the sale of the home. In contrast, a positive neighborhood will have a beneficial impact on the value of the home.
The Mountains of Paperwork
Understanding the paperwork involved in a real estate transaction is one of the biggest challenges of selling For Sale By Owner. And unless you have a background in contracts or law, you might want to leave the paperwork to the professionals. After all, the contract isn’t just an agreement about the price; it also includes contingencies (like those for home inspections and financing), the closing date, and other important terms.
If you decide to go solo, you will need to understand the jargon and know the answer to some really hard questions. The closing process can entail more than 20 pages of complicated paperwork, including the contract and addendums designed to cover all of the situations that could go wrong. If you are not careful even seemingly minor details can derail the sale of the home, or worse, it could even cause a legal dispute.
Selling a home is a complicated process that involved a lot of back and forth negotiations. It can be overwhelming. However, if you have a trusted Port St Lucie FL real estate agent by your side, you will have a professional who will handle the transaction from start to finish. You will also have someone who will look out for your best interest and help you review sales offer and write your counter-offer and so forth.
Without an Agent, Sellers Can Make Costly Mistakes
The paperwork involved in a home sale can be complicated and full of legal jargon. An oversight could mean a costly mistake or even a lawsuit. Real estate agents, however, have the knowledge and understanding to take care of all the necessary disclosures.
It would greatly help if you will consider the following questions:
Do you possess enough knowledge and expertise to conduct a real estate market analysis?
Will you be able to handle all the legal documents and paperwork?
Will you have enough time to manage and show up for showings whenever a potential buyer requests one?
Do you have the right marketing strategies and tools that will attract potential buyers?
If you’re not sure about your answers, it will be far better to hire the services of a competent real estate agent to save yourself from making costly mistakes.
The sale can take a while
Be prepared to spend a lot of time if you decide to sell your house by yourself. Aside from staging and getting the house ready to sell, you also have to sacrifice time showing the property, entertaining potential buyers, and agents who won’t take you seriously.
Likewise, without the help of a real estate agent, the sale can take longer. This can be a serious disadvantage if you are selling because you are relocating for your job o are financially strapped.
You can fall victim to low ballers
Selling a home without an agent catches the attention of investors and low-ballers who might take advantage of your inexperience and ignorance. There are many people out there who think they can get a reduced price simply because you aren't being represented by an agent.
What may seem like a reasonable offer to you may actually be a steal to them. With an experienced agent on your side, you will have someone who understands the scenario and will negotiate the most money possible for you.
Don’t Become the Next FSBO Horror Story
Luckily, you can avoid the hidden fees and lost profits, not to mention the added stress, that comes with selling a home by yourself. The best way to save money, save time, and save headaches is to work with an experienced real estate professional.
Trying to sell your home by yourself is more work than you probably realize. It is a lot to take on. That’s why we’re here to help!
Call me, Melissa Conrad, at 772-240-2589 and let’s talk about the home selling process.
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