When Is “For Sale By Owner” The Right Option?
When you put your home on the market, one of the first decisions you’ll make is whether to hire an agent to represent the property or to go the “for sale by owner” route.
While a portion of homeowners initially goes into selling their home on their own, they end up ultimately hiring an agent.
Some of the big reasons homeowners decide to try and sell their home on their own are because they think it will save them money and time. Some homeowners also feel like they understand their home better than a real estate agent will.
So when is it the right option to try and sell your home on your own without an agent?
The Basics of For Sale By Owner (FSBO)
FSBO means that as a homeowner, you list your home for sale without a real estate agent, making you responsible for the process from start-to-finish. Some of the things you’ll have to do include pricing and listing your home, staging it, negotiating, and closing.
The standard real estate commission fee is around 6%, and trying to save that is one of the primary motivators for people to go the FSBO route.
Along with avoiding the listing commission, there are other benefits of FSBO.
• You’ll have full control over the price at which you list your home.
• You can schedule your open houses and showings, so you’re not stuck at the last minute trying to leave the house.
• You’re going to be motivated to get the highest possible amount for your home.
• You know not just your home but also your neighborhood best.
What Are the Downsides of FSBO?
Some of the potential downsides of trying to sell your home on your own, aside from the commission you’ll pay, include:
• A real estate agent understands how to properly price a home to sell based on fair market value.• You may be emotionally attached to your home, which can be problematic. You may think your home is worth more than it is, or you might be offended if someone criticizes your home. A real estate agent doesn’t have that emotional connection so they can be objective.
• Real estate agents have access to local listing portals, the MLS, networks, and other agents.
• Some agents won’t show a home that’s FSBO.
• Real estate agents understand how to efficiently manage the procedural aspects of selling a home, such as the paperwork.
When Does It Make Sense To Sell Your Own Home?
In many circumstances, working with an experienced, professional real estate agent is best.
There are a few cases where it can make sense to opt for FSBO, however.
• If you already have a qualified buyer who’s interested in your home before it goes on the market, you may not need a listing agent. One of the big roles of an agent is marketing, and if you have someone who plans to buy your home, you won’t need an agent’s expertise in that area. It is important to separate interested buyers from qualified buyers in this case.
• Is there a lot of demand in your market? If you’re in a high-growth market and inventory is limited, you may be able to sell your home quickly and for top-dollar without an agent.
• Can you take your time? If you’re in no real hurry to sell your house and you can wait, then you might be able to sell it on your own successfully.
If you do the research and think FSBO is best for you, remember to price it accordingly, based on market research rather than emotions.
Create a listing that’s high-quality with professional photographs and an optimized description.
Finally, if you aren’t going to have a real estate agent, you should work with an experienced real estate attorney early on to protect you and help guide you through the process.
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