Listing your home as “For Sale by Owner,” or FSBO, may seem like an appealing option. You don’t have to pay a commission to a seller’s agent, and you have complete control to work within your own schedule and requirements. Homeowners sometimes try to list their homes on their own to save money, but unfortunately, this plan often backfires.
Real estate agents play an essential role in the process. Not hiring an agent will create a heavier burden for you, and it may affect the outcome of the sale. If you’re considering the FSBO path, you should understand the risks involved before you list your home.
Marketing an FSBO Home
Marketing is one of the most important aspects of selling your home. You have to attract prospective buyers to your listing in order to get offers. However, your marketing options as a seller are somewhat limited. Only real estate agents can list properties on the MLS, which is the primary resource for sharing listings with buying agents. If you want your FSBO home on the MLS, you would have to pay a fee to a brokerage firm for them to list it for you.
As the seller, your primary options for marketing your home are FSBO listing sites, social media, and real estate sites like Zillow and Redfin. These can all be great ways to attract buyers, but real estate agents will always have a wider reach. In addition to the MLS, agents can list on their own websites.
Agents also have the resources and experience to create high-quality listings with professional photos, videos, and eye-catching descriptions. The quality of a listing can make a big difference in the amount of interest generated. If you plan to list your home yourself, you should put a great deal of thought and time into your listing.
Pricing and Negotiations
Real estate agents provide valuable support when setting an asking price and negotiating with potential buyers. Setting too high of a listing price will reduce your buyer pool, but setting a low price could hurt your profits. The asking price is also influenced by your location, the size and layout of your home, the time of year, and the current market conditions. An agent is closely familiar with all the nuances of pricing, so they help sellers set the price that will get the best results.
Agents are also enormously helpful when negotiating with a prospective buyer. If you push too much or aren’t effective in your communication, negotiating could backfire. Agents are experts at real estate negotiations. They know how to ask for more without asking for too much, so working with an agent usually results in a higher sale price.
Legality is an important consideration during every step of the selling process. Listing your home without support from an agent puts you at risk of making legal missteps, which could have devastating results.
For instance, there are many local, state, and federal regulations for disclosures. Sellers must disclose if the property has lead-based paint, a history of pests, and other concerns. You might also have to disclose environmental hazards in the area. If you list your home on your own, you must become familiar with all of the disclosure requirements in your area. Failing to disclose information to a buyer will result in legal trouble.
Gathering the contracts and agreements involved in a real estate transaction can be difficult as a layperson, too. Some of the contracts are available online as templates, but trying to arrange your own documents may be risky. Missing a document or omitting key information could delay or halt the sale. In most FSBO cases, the buyer’s agent drafts and gathers most of the contracts. However, this agent works for the buyer, not for you.
What to Expect With the FSBO Process
Listing your home as FSBO can be a time-consuming process. If you decide to list your home yourself, you should be prepared for all of the responsibilities involved. First, you must decide the listing price of your home. The best way to do this is to research recent sale prices of comparable homes in your neighborhood. This will give you a rough estimate of what similar properties are selling for right now.
Before taking pictures for your listing, you should prepare your home. Deep clean the entire house and put away any personal items. Your home should look as neutral as possible in the photos so that potential buyers can picture themselves living in the house. Take pictures that make your home look bright, clean, and spacious. Hiring a photographer to take the listing photos is a wise choice. Additionally, you should write a compelling description of your home that includes the key selling features.
After your home is listed, you should prepare to make yourself available for showings. Being flexible with your schedule is essential at this stage. Being unable to meet with a seller could result in a missed offer. When you do receive an offer, you then have to decide whether to accept the offer as-is or whether to negotiate. You could request a higher price, or you could negotiate on the conditions of the agreement.
Once you accept an offer, you now must prepare for the closing meeting. This will involve consulting with a number of different professionals and preparing legal documents. Although you may be able to find the paperwork you need online, it’s always wise to consult with a real estate attorney. The buyer’s agent may prepare the majority of the documents themselves.
Should You List Your Home as FSBO?
Listing your home as FSBO does offer some benefits. When paying commission to both the selling and buying agents, the commission usually amounts to 5% to 6% of the sale. Without a seller’s agent, the commission payment will be cut in half. Some homeowners also choose the FSBO route because they want total control over the process. A good real estate agent will always listen thoughtfully to your concerns, but you may choose to list as FSBO if you prefer to handle these matters yourself.
Selling your home without an agent can be a stressful and time-consuming process, though. Marketing your home on your own is difficult, and negotiating may not be successful. You also run the risk of getting into legal trouble if you don’t consult with a professional. In a hot real estate market, you may be able to complete an FSBO transaction quickly and easily if you’re willing to put in the work. In most cases, though, the risks outweigh the benefits.
A home sale is one of the biggest transactions most people ever encounter, and going through the process without help from a professional is not always a wise choice. If you’re preparing to sell your home, consulting with a real estate agent is vital to your success.
If you have questions about buying a home, selling a home or renting a home, Resource Real Estate today!