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Top 5 Reasons You Should Not For Sale By Owner

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Top 5 Reasons You Should Not For Sale By Owner | Keeping Current Matters

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

  • 51% on the internet
  • 34% from a Real Estate Agent
  • 9% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies, which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many homeowners believe that they will 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 the commission.

Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.


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33 Responses to “Top 5 Reasons You Should Not For Sale By Owner”

  1. Michael January 26, 2017 at 12:34 am # Reply

    This article seems o have no basis, merely suggestions and I believe the real estate agent profession will diminish substantially over the next decade.

    • Walter February 1, 2017 at 10:50 pm # Reply

      Not likely, in fact I believe that in the future with all the regulations that a homeowner
      May by so overwhelmed with regulations that they could not navigate the process without the help of a professional. Remember the old saying that a person who acts as their own attorney has a fool as a client? Need I say more?

    • Casey February 7, 2017 at 8:03 am # Reply

      Agree. We just sold our house FSBO in less than a week for over appraisal price. Buyers want houses, no matter who is selling it. Get listed on MLS with a small fee. Contracts aren’t rocket science if you can read, and we all know the title companies do all the work anyway. Real estate professionals have convinced the general public that their job is so daunting as job protection.

      • Michael February 7, 2017 at 3:18 pm # Reply

        You may be able to sell your home FSBO, but actually making more money is questionable. Selling a home over “appraised value”, seems unlikely. Maybe what you were give. As a Competitive market analysis, ands are pending at a higher price. A bank WILL NOT give a loan for more than appraised vale as they have to be able to use the home as collateral. Trust me when we say an agents job is a lot more then meets the eye!

        • Maggie Lee February 8, 2017 at 6:21 pm # Reply

          Agree! The lender will not do a loan if the house sold over the appraisal amount. Someone is going to have to make up the difference – either the buyer will have to bring the difference to closing (that should never happen) or the seller will have to reduce their agreed upon amount to match the appraisal.

        • Andre Tenthorey February 9, 2017 at 7:35 pm # Reply

          For Sure Mike.. ;)))

        • Ian Williams, Realtor February 9, 2017 at 8:08 pm # Reply

          A home can easily sell for over the appraised value if a Realtor has a cash buyer. Since over 90% of buyers use a Realtor (and since they aren’t paying for the Realtor out of their pocket), this increases the exposure and is therefore more likely to occur. Also, knowing the market is important. I’m North of Austin, TX, where everyone wants to live. Due to this, the appraised value is ~10% higher in a lot of cases. Many people don’t study the appraisal trends.

        • Jeanette February 11, 2017 at 3:42 pm # Reply

          I’ve sold numerous homes over appraised value. In our seller’s market, most appraisers can’t keep up. And if you have a cash buyer coming from California who thinks the house is a steal, it isn’t going to matter what it appraises at.

      • Tom February 7, 2017 at 7:14 pm # Reply

        Agreed! Save yourself the expense and aggravation…

      • Jeanette February 11, 2017 at 3:40 pm # Reply

        That is HILARIOUS! What Realtor are you working with to have that opinion?!?!? LOL Just listing your home in MLS(which with my company exposes you to 178 different websites all over the country takes sometimes days of work to gather all the information, pictures etc. It has been proven that Realtors MORE than pay for themselves, not to mention the stress reliever of knowing things will be done correctly–

      • Jacqueline February 14, 2017 at 11:29 am # Reply

        Have you ever been a Realtor, you truly have no idea what you are saying. Ask our spouses what we go through.

        • Ana Williams February 14, 2017 at 9:44 pm # Reply

          Jacqueline, well said. It is Valentine’s Day and I just finished working while my poor husband is watching an old Western.

        • Allison C February 16, 2017 at 10:45 am # Reply

          Yes, our kids too.

      • Michelle Smith February 17, 2017 at 8:48 pm # Reply

        Follow me around for 24 hours and then repeat the line about the title companies doing “all the work.” I have never laughed so hard in all my life.

        • Beth Allen February 27, 2017 at 11:38 pm # Reply

          #word Some of these people have absolutely no idea what they’re talking about! 20 years ago we were “smart” FSBO sellers before I was a Realtor. We “saved” $6k on the commission and probably lost $20K in too low price and inspection items that we shouldn’t have paid for but we had no one guiding us or fighting for us and we are so lucky we didn’t lose any more money or miss any of the state-mandated disclosures (there are way more now). Gotta stop reading these ridiculous comments. I’ve got a listing to input, an offer to write, and emails to answer for my wonderful, loyal clients that I would do anything for! And it’s 8:30 pm.

      • Wanda February 25, 2017 at 11:38 am # Reply

        Shame on you. What most consumers do not understand is when we represent someone as a client, we are assuming all of the liability of representing the client.

        • Susan O'Hara February 28, 2017 at 6:26 pm # Reply

          BINGO! I was surprised the article did not talk about liability and how we keep our clients out of the courtroom.

    • Jason February 8, 2017 at 6:53 pm # Reply

      Yes, you can sell on your own! However you still open yourself up to possible law suits est. Example. You did not disclose a past insurance claim as required by law. They have the same issue after moving in and find out you did not disclose this. You can now be held liable for damages up to three times the amount. Or in Texas you are required to have a T-47 signed and notarized to the title company with in 72 hours of contract acceptance. If not the buyer can back out of the contract at anytime and you are required to return all earnest money.

      There is more to it than just a sign in the yard and a hand shake.

      • Jacqueline February 14, 2017 at 11:30 am # Reply

        Agreed Jason!

    • Dean February 20, 2017 at 2:59 pm # Reply

      The amount of people that now use an agent has grown to 89% from about 69% 15 years ago. The trend has gone the other way as the marketing and paperwork has gotten more complicated.

    • Shelley February 21, 2017 at 7:28 pm # Reply

      Not going to happen. There is too much to know and to learn in the real estate business for that to happen.

    • Shawn Schwartz February 25, 2017 at 10:53 pm # Reply

      Real estate agents will not disappear! If you think so then you will be hiring a lawyer to sell your property which will cost you more . Your home is the biggest investment of your life. When you have a legal issue. Do you try to represent yourself? NO!
      Your agent knows the market more than anyone. It is a small amount to pay so you get top dollar for your big investment ! Never question your real estate agent and what they do for you. We work 24/7. I don’t know any other profession that puts that much time on the job.

  2. matt maloney February 9, 2017 at 7:52 pm # Reply

    You don’t “negotiate” with the appraiser.

    • Jeanette February 11, 2017 at 3:44 pm # Reply

      Oh I beg to differ–I’ve provided numerous comps to appraisers and negotiated raised appraisals to substantiate an offer–negotiation is everywhere. If you don’t have the comps to substantiate your listing price or buyer’s offer, you’re not going to be able to negotiate!

      • Allison C February 16, 2017 at 10:47 am # Reply

        Agreed!

  3. Debby Cirelli February 10, 2017 at 8:42 am # Reply

    I sold our home myself and all paperwork was handled by attorney for a small fee. It was sold in 10 days and we saved $45,000 that would’ve been commission.

    • Rebecca Roble February 12, 2017 at 10:47 am # Reply

      How do you know you saved “$45,000?” Did you have a bidding war? Did you pull comps? Did you valuate the difference with location, square footage, renovations, market trends? There’s a lot involved with coming up with a price, and unless you are a seasoned broker, most will not have this knowledge.

      • Jacqueline February 14, 2017 at 11:31 am # Reply

        Agreed

    • Rebecca Roble February 12, 2017 at 10:49 am # Reply

      How do you know you saved “$45,000?” Did you have a bidding war? Did you pull comps? Did you valuate the difference with location, square footage, renovations, market trends? There’s a lot involved with coming up with a price, and unless you are a seasoned and numbers-savvy broker, most will not have this knowledge.

  4. dave carr February 16, 2017 at 8:08 am # Reply

    #1 problem is authentication of buyers and nosy people who want to see your house. Who are they? How will you know their intentions? I recommend FSBOs look at the drivers license and mortgage pre – approvals of everyone who comes in their home,and require 24 hours appointments.

  5. Skye February 18, 2017 at 2:02 am # Reply

    Yeh, said by the realtor. Unless??? You have a firm grip on how to advertise your house online. Being a social media/search engine programmer marketer I can almost guarantee that I can get as much if not more exposure for my house then a realtor can. Plus, I have the added bonus of taking a serious interest in my home as appose’ to a number of other realtors that tried to sell other homes of mine. It was basically, put up the lock, sign and mls and then sit around until someone called.

    Here’s some pointers for anyone that wants to sell their own home. Eye candy is important as well as curb appeal. Not all improvements are a great idea. Some potential buyers like to do things like paint and carpet in their own way (unless it is bad and takes away from the eye candy).

    Open a browser, go to Google (or some other better search engine hehe) and type in ‘free classified ad sites’. Don’t list on them all but take a look at the list. Determine which one will be most effective in your area. Look at your local stores and see what kind of magazines are out. Look them up online and if the price is right.. put some money into advertising. and and and… did you know there are places as well that will put your home on the MLS service for you? It’ll cost but it depends on how bad you’d like to sell your house.

    Then theres the social media platforms. Go to facebook, do a search on classified ads groups in your area. Join and ask if you can list your home. Make a nice little instagram ad and post it and ask all your friends to share.

    • Shawn Schwartz February 25, 2017 at 11:18 pm # Reply

      First of all we realtors don’t just put up a sign and sit around and wait until it sells.
      We work 24/7 believe it or not. I am a full time realtor and I work very hard for my buyers and sellers. With the market being low in inventory, it is a challangr for buyers to find properties and they better be pre qualified before their search.
      Sellers want pre approved buyers. They are getting multiple offers and it takes a talented agent to be able to handle 5-15 offers on their listing. NAR has proven stats that 16% of sellers could have gotten more money for their home even with listing it with an agent. We currently have 22 forms that we use to protect buyers and sellers buy and sell homes. Why would you not hire a professional to help you sell the biggest investment in your life? If I need legal advise I would not go to court by myself. I would hire an attorney. Sellers beware if selling your home in your own. Realtors know the market and can get you top dollar for biggest investment!

  6. Melisa Smith February 20, 2017 at 4:22 pm # Reply

    I have sold several for sale by owner homes (5 of my own and 2 for family) and it is only when realtors are involved does it get way more complicated. Selling for sale by owner is extremely easy. The scare tactics listed here are quite comical and the points are irrelevant. Anyone can sell on the Internet, it is 2017 right?? I have worked with and without realtors and I cannot believe how much easier it is without one. There is no middle man when dealing with the home inspectors, appraisers, ect ect. I believe the only reasons to hire a realtor is:
    1. You do not live in the same state as property you are selling.
    2. You truly don’t have a clue what you are doing and have no desire to figure it out.
    Otherwise you should definitely sell by owner and you will save thousands!

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