Deciding to sell your home is a big decision, but deciding to sell your home without the help of a real estate agent is even bigger. There are a lot of reasons that homeowners are tempted to sell their home on their own, but most of them can be boiled down to these three:
- Commissions: FSBO (For Sale By Owner) sellers save money by not paying a commission to an agent that is representing their home on the market.
- Convenience: When you sell your home yourself you’re the one who shows it, so you don’t need to scramble to get yourself (and the kids) out the door because a potential buyer is on their way over.
- Control: You have control over every step of the selling process when you sell FSBO, which gives some homeowners greater peace of mind.
But you have to decide if those reasons outweigh the responsibilities you take on when you decide to go the FSBO route. Before you make a decision, ask yourself these five questions.
- Do I know the real market value of my home?
Pricing your house correctly is one of the trickiest parts of selling. It’s not just about what you think your house is worth, or how much you’ve invested into the home. The biggest mistake FSBO sellers make is pricing their home too high, which can lead to a long time on the market with little interest from potential buyers. If a home is listed for too long, buyers wonder what’s wrong with the property.
To price your home competitively, you need to look at sale prices of similar houses in the area as well as current market trends. You can use realty websites to do some comparisons, but you typically won’t have access to the same information as a real estate agent. Even if you don’t want to bring an agent on, you should still consider hiring one to do a price estimate or paying for an appraisal to get a better idea of what your home’s listing price should be.
- Am I able to market my home to potential buyers?
One of the best things a real estate agent does is get your home in front of the right buyers. Without an agent’s connections, you need to spread the word on your own. From listing your home on websites to taking professional-grade photos, you might be surprised at how much effort goes into marketing your home. Some of the marketing duties you need to be ready for include:
- Placing an attractive “For Sale” sign in the yard
- Making promotional fliers that showcase your home’s highlights
- Staging your home for photos and showings
- Taking photos for promotional materials (online, fliers, etc.)
- Writing effective marketing descriptions of your home and property
- Answering inquiries from potential buyers (email, phone, in-person)
- Organizing and conducting showings
- Do I want to hear what people don’t like about my home?
Nobody likes to hear that their baby is ugly, but when potential buyers walk through your home it’s likely to happen. Some people have a hard time separating emotions from the business of selling a home. When you’ve invested a lot into a property to make it a home that you love, it can hurt to hear that someone else wants to tear out the special-order tile you so carefully laid in the bathroom.
Just remember that buyers are looking for reasons to pay less for your home, so a lot of their comments may be a play to knock off a few thousand dollars from the asking price. But if that’s not enough to save your feelings, you may want to go with an agent just to save yourself from negative comments that may be hard to swallow.
- Am I prepared to screen potential buyers?
Another valuable thing that a real estate agent can do for you is to vet potential buyers before they ever step over your threshold. When you sell your house on your own, making sure buyers have the money to follow through on the deal is up to you.
You don’t want to take your home off the market or spend time deep in negotiations only to discover the buyer can’t come up with the funds to purchase your house. One thing you can do if you’re FSBO, is ask potential buyers for a preapproval letter from a bank or other reputable lender. This letter will tell you that the buyer has already been approved for a mortgage and the amount they’re approved for.
- Can I negotiate with a buyer’s agent?
If you’re up for pricing, marketing, and showing your house without the help of a real estate agent, then you also need to be ready to get in the trenches and negotiate. Just because you don’t have an agent doesn’t mean the people who want to buy your house won’t have one. If they do, you’ll need to work with their agent to hammer out the sales contract.
You also need to be prepared to pay commission to the buyer’s agent. That will probably be about three percent of the purchase price. If you choose not to offer any commission to a buyer’s agent, you could put your sale in jeopardy. Familiarize yourself with the laws and ethics governing real estate transactions in your state, and be prepared when you go head-to-head with a professional.
The Bottom Line
No matter why you’re thinking of selling your home without the help of a real estate agent, make sure you know what you’re getting into before you get started. And be sure to tally up the value of all the time and effort you’ll be putting into the sale of your home. Make sure the potential savings are worth what you’ll be putting into the process.