Pros And Cons Of Selling FSBO
Happy Wednesday everyone! Today, I would like to share some pros and cons of selling your home FSBO (For Sale By Owner). Sure, there are some good things that can come about selling this way, but there are some things that can go wrong and lead to one big headache! So to help you try and avoid that, here are a few good and, not-so-good, things about FSBOs!
Pros of FSBO:
1. Not Having To Pay Commission Fees
Okay, so this is the biggest thing every homeowner that's looking to sell will consider. Sure, it's very attractive that you don't have to pay the real estate commission fee that you would if you were to use an agent. More money in your pocket? Yes, please! However, what sellers tend to not fully understand is just how much goes into the process of selling your home. It's A LOT of work, but if an agent doesn't enjoy it, they wouldn't be an agent!
2. Control Over The Sale
Whenever you sign a listing agreement with a real estate agent, you are basically giving them the full right to how everything, or basically everything, will go throughout the process. To some people, that may seem like no big deal but you'd be surprised just how frustrated some clients can get over certain things that go on during the process.
When you sell on your own, you have complete control of the marketing and pricing of your home. However, you feel is best is how you can go. You don't have to listen to anyone if you don't want to. Although with saying that, it can be a dangerous game when it comes to pricing your home so if you're serious about going the route of FSBO, then you need to be prepared for various different obstacles.
3. You Have Insider Knowledge
You probably read this and thought to yourself... yeah, no duh! It's extremely true that no one knows your home better than you do! You know first hand just what it is like to be a resident in your neighborhood and how the community is as a whole where you live. Whether you think so or not, knowing how the neighborhood and surrounding community is can affect someone's decision on purchasing a home or not. It's always great to know what the surrounding area of a potential home is like, that's why many prospective buyers will ask multiple questions about the location of your home.
But also, you are able to give a different outlook on what it's like actually living in the home. You know every single detail (even if you don't realize it) and can really sell someone on your home. That's why any agent you may speak to will ask you various different questions trying to get every little detail that they can!
Cons Of FSBO:
1. Lack Of Real Estate Knowledge
Okay so like I talked about previously, you don't have to pay a real estate commission fee... which sounds awesome, but having a real estate agent is a huge weight off your shoulders. Agents are educated on how to sell properties efficiently and the correct way. They know how every single step of the process will go down and how to handle everything that comes their way. If you try and sell your home alone, it could work out for you, but there is about a 90% chance that it won't work and you'll end up having to hire a realtor anyway!
Not to mention, it is the agent's job to help you get the best deal possible and so they can properly negotiate any offers that may come along. They are the best assets you can have on your team.
2. Inaccessibility To Marketing Channels
Your target audience to get your home consists of two categories:
You might read the chart and think to yourself, "Seems easy enough." But don't underestimate the process like that because it is way harder to properly market your property in order to get it maximum exposure. Believe it or not, just putting out a "For Sale" sign in the yard and uploading a post on Facebook won't always get you an offer. There's plenty more to what really goes into proper marketing tactics!
So as you can see from the graphic above and on the pie chart, the two highest percentages taken from a poll of how buyers found their homes were from the internet, and through a real estate agent. That's 85% right there! And then on the right, it shows how FSBO properties are marketed... and it's not great. That's why a lot of these properties either sit on the market for a very long time, or the sellers will give up and hire a realtor to do the job.
3. No Pricing Strategy/Biased Opinion
One of the main jobs of a listing agent is pricing your home at the most accurate price as possible. Sometimes you will like the price, and sometimes you won't... that's just how it goes. Mainly what I'm trying to get at is that assessing a property and giving a valued price that you believe it's worth and will sell for is extremely hard. Priced too low, the seller won't get as much as they should and will be left feeling cheated, but at a way-too-high price, the seller's property could sit for a very long time on the market.
And of course, being the homeowner, you will always believe your home is worth way more than what it might truly be. And if you don't already know, that's called being biased. Meaning, you aren't just putting the property up for sale at a price that suits the structure and home itself, you're also including the memories and special factors that made it your home. Pricing a property is difficult for even agents to do sometimes, so imagine what it's like trying to price your home as the owner!
4. Selling FSBO Is A Major Commitment
No matter what you do, selling your home is a major commitment. But in this case, do you have the time to commit to getting your house sold? Real estate agents spend their days showing homes, listing homes, speaking on the phone, and replying to messages and emails. What makes an agent a good one is being able to manage their time correctly and get everything done in the right amount of time. They know what it takes and just how long it can take in order to sell a home and they are constantly working. It's very rare that an agent isn't working on something real estate related. They have the time in order to do what needs to be done to get your house sold because it's their job! If you don't feel like you have the time, trust in me when I say that you should just at least speak with an agent before deciding to go the FSBO route. Like the Disney Tangled Movie quote says, "Mother knows best," in this case "Agents know best!"