When selling your home, skipping out on a real estate agent may seem like a great way to save a couple of bucks. After all, the standard real estate agent’s commission is 5% to 6% which adds up quickly. Given the size of this fee, you may think taking on the responsibility would pay off.
However, 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:
1. Your safety is a priority
Your safety should always come first, and that’s more crucial than ever given the current health crisis in our world. When you opt toward an 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 health and well-being too. From regulating the number of people in your home at one time to ensuring proper sanitization before, during, and after a showing, and even facilitating virtual tours, 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 potential buyers.
2. 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. During 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. They have the appropriate tools to feature your home on members-only platforms, produce professional photography, and upscale videography to promote virtual tours.
3. 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 company (which works for the buyer and will almost always find challenges with the house)
- The appraise (if there is a question of value)
As part of their training, real estate 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.
4. You Won’t Know if Your Purchase 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 an 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. You need someone who’s working with lenders every day to guarantee your buyer makes it to the closing table. Otherwise, you could be wasting time on the market if you devote yourself to someone who doesn’t have all of their ducks in a row.
5. FSBOing is Becoming More Difficult from a Legal Standpoint
The documentation involved in the selling process is growing dramatically as more and more disclosures and regulations 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.
6. You Net More Money When Using an Agent
Many homeowners think they’ll save the real estate commission by selling on their own. The main reason buyers look at FSBOs is because they also believe they can save a buck in the form of the real estate agent’s commission.
The reality is 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 a real estate agent. In some cases, the seller may even net less money from the sale. The study found the difference in price between an FSBO and an agent-listed home was an average of 6%. One of the main reasons for the price difference is effective exposure.
The more buyers that view a home, the greater the chance a bidding war will take place, too.
To Sum It Up:
Listing on your own leaves you to manage the entire transaction by yourself. Why do that when you can hire a real estate agent and still net the same amount of money? Before you decide to take on the challenges of selling your house alone, connect with a real estate agent and discuss your options.