11 Reasons Why FSBO Sellers Should Reconsider Hiring a Realtor
/ FSBO, TIPS & ADVICE / FSBO, HOME SELLING
While selling your home by yourself, without getting a seller’s agent involved, may seem like a great way to save money on a commission fee, the fact is that most potential FSBO sellers end up regretting the decision. If you’re considering going FSBO, or you’re already listing your home that way and things aren’t exactly working out as planned, then keep reading. Using recent National Association of Realtors statistics, here are a few reasons you may want to reconsider.
1) FSBO Market Share is Shrinking
According to the most current data from the National Association of Realtors (NAR), FSBO sales accounted for only 9% of all home sales in 2013*. Not too impressive, is it? Well, it gets even worse when you take into account that FSBO sales seem to have been steadily declining over the past decade from a 2004 peak of just 14%*.
2) The Price Isn’t Right
While “location, location, location” might be the home buyer’s mantra, as a home seller, that’s one variable you really can’t change. Instead, the key factor to selling your home in a reasonable amount of time is pricing it correctly, which isn’t nearly as easy to do as you might think. Sure, you can go online and see what nearby homes have sold for, but are you really comparing apples to apples here? An experienced Realtor will be able to perform a detailed market analysis which not only takes into account your home’s condition and any improvements you might have made, but can generate an up-to-the-minute temperature reading of just how hot (or not) your local market really is.
3) Yard Signs and Newspaper Ads Just Won’t Cut It
Believe it or not, many FSBO home sellers still believe that all they have to do is throw up a “For Sale” sign in the yard and the world will beat a path to their doors. Sorry, but today’s tech-savvy buyers (See reason #4) prefer to house-hunt in more methodical ways than simply driving around the neighborhood. And yet, according to the NAR, this is still the top FSBO marketing method, as 36% of would-be sellers rely on yard signs*. The key word here is “would-be”, since only 10% of all buyers actually find their homes via yard signs**. Statistics are even more dismal for sellers who choose print media, since only 1% of buyers find homes through newspaper ads.
4) Craigslist Can Be Creepy
Okay, so you’re internet-savvy, you know all about Craigslist and similar online, free classified listings. That’s fantastic, since NAR’s 2014 housing market profile shows that 92% of all home buyers use the internet to help them in their search***. But (and it’s a really big but) – these online classifieds are also seen as a happy hunting grounds for scammers, criminals, and dangerous people you really do NOT want to be admitting to your home. Realtors don’t have to resort to dubious bargain-basement listings, but can instead list your home on highly-qualified sites such as Zillow or Realtor.com. (See reason #6 for more on what resources Realtors have available.)
5) Your FB Friends Just Aren’t In the Market
Marketing via social media, what could be more up-to-the-minute? Sure, you may have hundreds of Facebook friends and Twitter followers, so that’s a potentially sizable audience if you decide to advertise your home that way. Think about it, though – how many of them actually live in your area? And of these, how many are actually looking for a new home? If you do manage to sell your home that way, you’ll be one of the lucky few.
6) Realtors Have All the Right Tools
91% of all Realtors make use of social media sites as a marketing tool****. Just about everyone browsing their page is interested in buying a home in the local area. What’s more, Realtors are actively engaged in driving traffic to their own websites and they also have the capacity to list homes on the Multiple Listing Service (MLS). In order to list a home on the MLS, an FSBO seller will have to pay an outside agency several hundred dollars, as well as having to cover the cost of the buyer’s agent fee. At present, NAR data shows that only 7% of FSBO homes are listed on an MLS website*.
7) They Can’t Buy It If They Can’t See It
One thing you might not be taking into account as a potential DIY home seller is just how available you’ll need to be in order to show your home. Are you really going to be able to call in sick or cancel your plans every time someone wants to look at your home? Potential buyers aren’t going to want to work around your convenience. A professional Realtor, however, doesn’t need to take a day off work in order to show your home, since this IS his/her job.
8) You Don’t Want To Waste Your Time With Bargain Hunters
If you’re acting as your own sales agent, how do you decide who’s a legitimate buyer and who’s just going to be wasting your time? Seller’s agents have the necessary tools to determine whether a buyer is pre-qualified with a home loan sufficient to cover the cost of your listing. What’s more, FSBO homes are more likely to appeal to the type of buyer who’s out for a rock-bottom bargain-basement deal and may even go so far as to want you to give them a cut of the commission you’re saving by foregoing a Realtor’s services.
9) You’re Drowning in Paperwork
In case you’re not already getting the picture, selling a home is pretty hard work! Not only do you have to find and vet potential buyers, but once you’ve found that buyer, then the real headaches begin. Every detail must be attended to in order to make the sale go through…and what’s more, if you neglect something crucial like a mandatory disclosure or inspection report, you may find yourself facing not just the loss of the sale, but also potentially serious legal repercussions. There is some paperwork to go through even if you work with an agent, but that’s still a lot easier than doing it all yourself.
10) Hiring a Selling Agent Needn’t Cost You a Penny
What? How can this be? Don’t all seller’s agents work on commission? Well, yes, they do. But real estate agents themselves bear many of the costs you might otherwise have to pick up, like marketing your home and screening buyers. A savvy sales agent can also build the cost of his/her commission right into your home’s asking price, so you won’t feel a thing.
11) In Fact, You Might Even Make Money With A Realtor
And the survey says…bottom line, the average FSBO home last year sold for $208,700 while the average agent-assisted home sale was $235,000***. This means that an agent-assisted home sale can net you an 11% larger profit. Assuming you paid a 5% agent commission on a $235,000 home, or $11,750, you would still come out $14,550 ahead! Looks like a win for everybody.
If you’re willing to put up with all the headaches of listing, selling, and closing on a home, and you don’t mind settling for what may well be a lower price, then an FSBO sale may be for you. If, on the other hand, this all sounds like too much work for too little payoff, you’re in good company. It seems that, according to a Massachusetts Real Estate News article, over 80% of all FSBO sellers eventually wind up choosing to sell their homes by using an agent instead (and this number applies nationwide, not just in Massachusetts).
*2013 National Association of REALTORS® Profile of Home Buyers and Sellers
**NAR Survey of Home Buyers and Sellers Shows Dual Income Couples Fueling Market
***Highlights From the 2014 Profile of Home Buyers and Sellers
****2013-14 REALTOR® Technology Survey