Selling Your Home on Your Own May Cost You Thousands More Than You Think.

Top 5 Reasons You Should NOT FSBO | MyKCM

Rising home prices coupled with a lack of inventory in today’s market may cause some homeowners to consider selling their home on their own (known in the industry as a FSBO or For Sale By Owner). Market conditions may be perfect for many sellers, but Selling Your Home on Your Own May Cost You Thousands More Than You Think. Here are the top 5 things you need to consider before you DIY:

1. Online Strategy for Prospective Purchasers

Recent studies have shown that 95% of buyers search online for a home. In comparison, only 13% use 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?

  • 50% on the Internet
  • 7% from a yard sign
  • 28% from a Real Estate Agent
  • 1% from newspapers

The days of selling your house by putting up a sign and listing 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 Increasingly Difficult

The paperwork involved in the process 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 7% over the last 20+ years.

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. What you must consider is 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. In many cases, you’ll have to pay at least 3% commission to the Buyer’s agent, who represents their interests, so shouldn’t have you someone representing your interests too?

A study by Collateral Analytics revealed that FSBOs don’t actually save anything by forgoing the help of an agent. In some cases, they may actually cost themselves more. One of the main reasons for the price difference at the time of sale is:

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

The more buyers that view a home, the greater the chance of a bidding war for the property, which can substantially increase the amount you receive at closing. The study found the difference in price between comparable homes of size and location is currently at an average of 6%. A For Sale By Owner approach may leave you selling at thousands of dollars below market.

Bottom Line

Before you decide to take on the challenge of selling your house on your own, The Donnelly Group can help you create a strategy for your neighborhood and potential buyers. Contact The Donnelly Group today to get started!

The data relating to real estate for sale on this web site comes from MRIS. Listing information comes from various brokers who participate in the MRIS IDX. Properties listed with brokerage firms other than The Donnelly Group of Keller Williams Integrity are marked with the MRIS Logo and detailed information about them includes the name of the listing brokers. The properties displayed may not be all the properties available. All information provided is deemed reliable but is not guaranteed and should be independently verified.