Selling your home without the assistance of a real estate agent may seem tempting, but this is a decision that needs to be weighed carefully. Saving a bundle on commissions certainly sounds good, but the FSBO route comes with a lot of legwork. According to the 2017 NAR report, FSBO’s only accounted for 8% of real estate sales in 2016, and their average sale price was well below that for agent-assisted sales. If you’re still considering going for FSBO, here’s what you need to know.
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What does FSBO mean?
For sale by owner (FSBO) is when a homeowner lists their home for sale without the assistance of a professional real estate agent. It will mean cutting out the seller’s commission but also being responsible for everything from start to finish. You’ll need to come up with your price, handle the marketing, the staging, pre-screening buyers, negotiations, paperwork, and closing with only your wits to guide you.
When you should choose FSBO
Whether FSBO is the right choice or not depends on the person. If you tick all the boxes below, then it could be the one for you.
You want to avoid paying a listing agent commission
The main reason people choose FSBO is to avoid paying a commission, which, in NYC, averages 5-6% of the purchase price. Just remember that you’ll still need to hire a real estate attorney to close the deal as NY State is one of several states that makes this a legal requirement.
You have the time and motivation to sell for top dollar
FSBO requires a lot of time and motivation if it’s to pay off. Just putting your listing online won’t be enough. You’ll need to do home staging, open houses’, and arrange visits by prospective buyers. Without enough motivation to sell, FSBO will only end up being a waste of time and money.
You’re an expert on your home and neighborhood
Another reason people choose FSBO is that they don’t trust an agent to know their home as well as they do. If you’ve been living there for many years and know everything about it, that can be a big selling point. The same goes for knowing your neighborhood just as well.
When you should choose a real estate agent
The reason why 92% of sellers hire an agent can be summed up in one word, experience. Here’s when to select a listing agent.
You don’t understand pricing strategy
The reason why most homes don’t sell is due to overpricing. Without a thorough knowledge of pricing strategy, this is very hard to avoid. A good agent will know how to price a home correctly based on its condition and the current market. They know what buyers are looking for and what kind of price will grab the attention of most of them.
You don’t have the time or recourses to market properly
Successful marketing isn’t just about putting enough time in; it’s about having the right remedies and contacts at your disposal. An agent will have access to local MLS, name recognition, connections with other agents, and relationships with all the right people. All good reasons why agent-assisted sales sell much faster and for a better price than FSBO.
You’re not good with paperwork or negotiating
An experienced agent knows how to spot severe buyers and help guide them towards the dotted line on the contract of sale. They know the entire sales process and the current market, which puts them in a strong position for negotiating and making counter-offers. Also, they know the ins-and-outs of all the required paperwork for sale. Mistakes or forgotten paperwork could torpedo a whole deal, which makes an agent’s expertise near a close invaluable.
With so much information and services available online now, it’s easy to think you can go without a listing agent when selling your home. You certainly can. But it comes with a lot of tradeoffs, responsibility, and risks. Even today, most people still chose to hire a real estate agent, the statistics alone on FSBO’s bear this out.