For Sale Buy Owner- Risks and Rewards

           

Some homeowners consider trying to sell their home on their own, this is known in the real estate industry as a For Sale by Owner (FSBO). Many people who want to save the Realtor commission think that they can handle the sale of their home themselves,  however there are several reasons for using a Realtor is best for the vast majority of sellers.

BETTER PRICE- Realtors firmly believe they can get you more money through the art of negotiation, leverage of local knowledge, use of incredible marketing tools, access to a greater marketplace and ability to qualify buyers. There are statistics that show that this is true:    

• “FSBOs typically have a lower median selling price: $208,700 compared to $235,000. Thus the typical agent-assisted home sale typically has a 13 percent higher sales price than the typical FSBO sale.”     

There are also conflicting statistics that show there is no difference between the sales price of a FSBO home versus a home that is represented by a Realtor: 

•  “Real estate agents in Madison, Wisconsin did not sell their clients’ homes for a higher sales price than FSBOs.  The difference was 0%.”

STRONG MARKETING- Realtors know how to market a home using photographs to maximize value when showing it to prospective buyers. They will use a strong internet platform that includes sites that only the real estate industry can access.

Realtors know that buying a home is an emotional process, and as a third party, can better manage that. A good Realtor can help get potential buyers excited about a lifestyle that a house can offer. Also, potential buyers don't always trust the homeowner.

ACCESS TO QUALIFIED BUYERS - Good real estate agents will request financial statements to determine a potential buyer's credit-worthiness, and, in the case of an all-cash offer, verify the funds. Most sellers would rather not waste time showing their home to not-so-serious buyers. A knowledgeable Realtor has the foresight and know-how to verify exactly where the funds to purchase the home are coming from (pending home sale, mortgage), so that it's less likely a deal will break down at the contract stage.

THE ART OF NEGOTIATIONS- A Realtor is a trained negotiator.  Through the home sale process they must negotiate with the buyer, the buyers real estate agent, the home inspector, and the appraiser.  Each person has their own agenda, for example the real estate agent is working towards the best interest of their client.  The buyer wants the best possible deal.  The inspector works for the buyer and always find some problem with the home.  This makes them knowledgeable and needed. And finally the appraiser who has the difficult job of identifying the value of the home in a market that changes daily.  With all of these people having different agenda, a Realtor representing the home owner’s best interest is critical.

PAPERWORK- The paperwork involved in selling a home has increased dramatically as industry disclosures and regulations have become mandatory.  A Realtor is experienced in preparing and managing the  contracts and paperwork.  The contracts that a Realtor uses has been prepared and vetted by lawyers to make sure that the contract are solid and safe.

SAVING TIME – Many home owners do not have the time or inclination to properly stage their house, market their home, manage phone calls from would-be-buyers, negotiate with buyers, set up an inspection, and manage the paperwork. A good Realtor can manage all of that, plus guide sellers to attorneys and inspectors who are fair and reasonable, so that a seller doesn't have to worry about one who may pad bills with unnecessary charges.

For the majority of home owners who want to sell their home, using a Realtor is the way to go.  For those few owners who have lots of time, marketing resources, and organizational skills to spare, selling your home For Sale By Owner may be the choice for you.

In a survey the National Board of Realtors found some interesting statistics about For Sale By Owners.

·        The most difficult tasks for FSBO sellers:

o   Understanding and performing the paperwork: 12%

o   Getting the right price- 6%

o   Preparing or fixing up the home for sale- 6%

o   Selling within the planned length of time- 18%

o   Having enough time to devote to all aspects of the sale- 6%

·        The methods owners used to market a FSBO:

o   Yard signs- 42%

o   Friends, relatives, or neighbors- 32%

o   On-line classified adds- 14%

o   Open House- 14%

Although every home owner is different, it seems that the majority of  owners of FSBO homes were not using a full marketing platform to attract buyers and sell their home.  Perhaps this is why 18% of FSBO said that it was hard to get the home sold within their planned length of time.