To sell “For Sale By Owner”: Is It Right For You?

When people get ready to sell their home, many ask themselves “Do I really need a real estate agent? Can’t I sell my house for the same price on my own?” Most people don’t realize the full benefits of having an agent on their side. One huge advantage is that while the average homeowner only has access to a small portion of the homebuying market, a real estate agent has the entire market at their fingertips. That doesn’t even consider the legal safeguards, personal safety protection, and general expertise that an experienced agent has to offer. Agents help sellers comply with the state disclosure laws to stay out of trouble, verify the identity of all visitors to the home, and will negotiate for the best possible deal for their seller-client. Conversely, when a private seller does offer a commission to an agent who brings the buyer, the seller is paying a trained negotiator to negotiate against their own best interest.?

This is clearly reflected in home buying data. According to the National Association Realtors Profile of Home Buyers and Sellers report for 2022, 87% of homes were sold with the assistance of a real estate agent and only 10% were for-sale-by-owner (FSBO) sales, with half of those sales with people whom the seller already knew, such as family and friends. Not only do FSBO sales make up a small percentage of total home sales, private sellers also sold for 25% less, on average, than agent-assisted sales. This suggests that selling privately effectively limits both reach and profitability of the FSBO plus most likely over-represents a class of distressed sellers who need to sell quickly and for cash. While it is certainly possible for a homeowner to find a buyer themselves and gather the resources to get to closing, most FSBOs aren’t distressed and are unwittingly undermining their ultimate goal of netting the most money from the sale.

We can all agree that to secure a strong sale, you need high demand and a lot of exposure: high exposure ensures people know the property is for sale and more demand equals more money. Two underlying factors also contribute to lower demand and a lower on-average sales price for the private seller. Most agents who could have a buyer for the property aren’t looking for properties that fall outside of the multiple listing service (MLS) - a tool that is used by agents to pool their listings - when they have access to hundreds or even thousands of properties in the MLS. Plus all of the properties in the MLS come with an advertised and guaranteed commission. The second factor is that when buyers give up the help of a licensed agent and know that the seller may only be paying half to no commission, the buyer wants to save on the same commission the seller is trying to save. Since the MLS is the main source of comparables for appraisers, this makes sense since those sold prices reflect a buyer’s agent AND listing agent’s commission. So ultimately, FSBOs lack both maximum exposure leading to less demand and leaving them exposed to buyers who want to save on the same commission they are trying to save.

This doesn’t mean that there’s no reason for someone to handle the sale of their home by themselves: in some cases, a distressed seller might just need to sell their home quickly and are willing to give a discounted price to do so. (I’m sure you’ve seen those “We buy Ugly Houses” signs on utility poles near you!) For others, money might just not be an important factor for their home sale. After all, half of all FSBO sales went to family members or friends of the seller. In situations like this, you might be fine with foregoing maximum profit potential to offer someone a good deal. For most sellers though, their goal is to find the buyer who will pay top market price, which will allow them to walk away from the closing table with the most money possible. This scenario often isn’t as likely when going with the FSBO approach.?

To get the highest possible price, you need to be sure that 100% of the agents and buyers in the market know your property is for sale, not just the 5% who are interested in working with FSBO properties. Having an experienced negotiator on your side is just as important and just as important in any market- even a low-inventory seller’s market! How so? An experienced listing agent can vet each buyer’s financials, spot red flags in their credentials, help a seller to compare offers, and appropriately weigh the pros and cons of each offer.

When you list your home with a trained real estate professional like me, you get the exposure and advocacy necessary to ensure that your home will go for the top market price and that the sale will go to closing as seamlessly as possible. And when you work with me, you can rest assured that I won’t get paid until we close on an offer that is acceptable to you! Since I can net you more money than you likely can on your own AND I will do all the work, you don’t have to choose between netting the most money possible OR hiring a seasoned professional like me: the choice is easy: hire me so that you do get every penny out of your home when it is time to move on.