Reasons Why You Shouldn't FSBO
In today’s world, we’re able to find the answer to any questions by simply doing a little research. Whether you head over to Google or watch videos on YouTube, there is enough expertise out there for you to become an expert in anything.
When it comes to finances, however, is that really such a good idea?
Consumers make the decision to sell their house themselves because they believe that, with enough research, they’ll be able to save the commission and put more money back in their pockets. But is that really a risk you’re willing to take on your largest financial investment?
Here are five reasons you should skip the headache of trying to sell your house yourself and hire a real estate agent.
All Liability Falls in Their Hands
We’re all human, and mistakes can happen from time to time. As a homeowner, if you sell your house yourself and a mistake happens, you’re liable for that mistake. While attorneys are able to close a home transaction, they typically don’t carry errors and omission (E&O) insurance.
So, if you list that you have quartz countertops but come to find out they’re marble, you could be paying to have those countertops replaced. There’s a good chance that a licensed real estate partner would have recognized the different countertop, but if it was missed, the E&O insurance would have covered the cost.
Understanding the Contracts
There’s a lot of paperwork that goes into a real estate transaction, and if you don’t completely understand each piece of the puzzle, there’s a good chance something could get missed. While ready-made contracts are easy to find and customize, if there’s something you don’t understand, you may find yourself contacting a lawyer, paid hourly, to explain it to you.
Real estate agents are trained to understand each piece of the contract and must attend continuing education classes every few years regarding the contracts to stay current on changes.
Correctly Pricing the Home
According to the most recent National Association of REALTORS? Profile of Home Buyers and Sellers report, the most difficult part of the process for homeowners who sold their home themselves was pricing the house correctly. Real estate agents have the tools and knowledge available to price your home accurately.
In 2019, homes that were sold by the FSBO route sold for an average of $200,000. Houses sold through a real estate agent sold for an average of $280,000. Even if you paid a full 6% commission, you would have netted an additional $63,200 on the transaction. That’s a lot of money to leave on the table.
Finding the Right Buyer
Houses that are sold by the homeowners typically sit on the market longer than those that have a real estate agent. Why? Because a real estate agent has a marketing plan in place to get your house in front of the right buyers. 36% of FSBO houses aren’t getting marketed at all, and 31% simply placed a sign in their yard. If no one knows your house is for sale, how can you expect to sell it?
No Representation
When you sell your home yourself, no one is negotiating on your behalf. Now, before you say you can negotiate for yourself, I want you to know that I understand where you’re coming from. BUT, if the buyer has a real estate agent negotiating for them, that agent may know how to get their buyer a better deal without you even realizing it.
For example, in lieu of a repair, the agent may ask you to cover a portion of the buyer’s closing cost. What if that repair costs less than what you end up paying at closing but you didn’t get the chance to research it ahead of time? Having someone negotiating on your behalf with the skills and experience ahead of time can make all the difference.