6 Reasons Why Selling Your House on Your Own Is a Mistake
There are many benefits to working with a real estate professional when selling your house. During challenging times, like what we face today, it becomes even more important to have an expert you trust to help guide you through the process. If you’re considering selling on your own, known in the industry as a For Sale By Owner (FSBO), it’s critical to consider the following:
- Your Safety Is a Priority
Your family’s safety should always come first, and that’s more crucial than ever given the
current health situation in our country. When you FSBO, it is incredibly difficult to control entry
into your home. A real estate professional will have the proper protocols in place to protect not
only your belongings, but your family’s health and well-being too. From regulating the number
of people in your home at one time to ensuring proper sanitization during and after a showing,
and even facilitating virtual tours for buyers, real estate professionals are equipped to follow
the latest industry standards recommended by the National Association of Realtors (NAR) to
help protect you and your family.
- A Powerful Online Strategy Is a Must to Attract a Buyer
Recent studies from NAR have shown that, even before COVID-19, the first step 44% of all
buyers took when looking for a home was to search online. Throughout the process, that
number jumps to 93%. Today, those numbers have grown exponentially. Most real estate agents
have developed a strong Internet and social media strategy to promote the sale of your house.
- There Are Too Many Negotiations
Here are just a few of the people you’ll need to negotiate with if you decide to FSBO:
- The buyer, who wants the best deal possible
- The buyer’s agent, who solely represents the best interest of the buyer
- The inspection companies, which work for the buyer and will almost always find challenges with the house
- The appraiser, if there is a question of value
As part of their training, agents are taught how to negotiate every aspect of the real estate
transaction and how to mediate the emotions felt by buyers looking to make what is probably
the largest purchase of their lives.
- You Won’t Know if Your Purchaser Is Qualified for a Mortgage
Having a buyer who wants to purchase your house is the first step. Making sure they can afford
to buy it is just as important. As a FSBO, it’s almost impossible to be involved in the mortgage
process of your buyer. A real estate professional is trained to ask the appropriate questions and,
in most cases, will be intimately aware of the progress being made toward a purchaser’s
mortgage commitment.Further complicating the situation is how the current mortgage market is rapidly evolving
because of the number of families out of work and in mortgage forbearance. A loan program
that was available yesterday could be gone tomorrow. You need someone who is working with
lenders every day to guarantee your buyer makes it to the closing table.
- FSBOing Has Become More Difficult from a Legal Standpoint
The documentation involved in the selling process has increased dramatically as more and more
disclosures and regulations have become mandatory. In an increasingly litigious society, the
agent acts as a third-party to help the seller avoid legal jeopardy. This is one of the major reasons
why the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.
- You Net More Money When Using an Agent
Many homeowners believe they’ll save the real estate commission by selling on their own.
Realize that the main reason buyers look at FSBOs is because they also believe they can save the
real estate agent’s commission. The seller and buyer can’t both save on the commission.A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the
help of an agent. In some cases, the seller may even net less money from the sale. The study
found the difference in price between a FSBO and an agent-listed home was an average of 6%.
One of the main reasons for the price difference is effective exposure:
“Properties listed with a broker that is a member of the local MLS will be listed online withall other participating broker websites, marketing the home to a much larger buyerpopulation. And those MLS properties generally offer compensation to agents whorepresent buyers, incentivizing them to show and sell the property and again potentiallyenlarging the buyer pool.”
The more buyers that view a home, the greater the chance a bidding war will take place.
Listing on your own leaves you to manage the entire transaction by yourself. Why do that when you can hire an agent and still net the same amount of money? Before you decide to take on the challenge of selling your house alone, let’s connect to discuss your options.