Do you have what it takes to sell your own home? No, this isn’t a trick question. If you’re selling your home, you might have thought about listing it for sale by owner (FSBO). But you might not have taken the time to honestly evaluate if you have what it takes to do it right…
Don’t worry, we aren’t trying to judge! We understand that FSBOs are a popular choice for many sellers. On the outside, they appear to be everything a seller could want: no commission to pay out to an agent and all of the control. However, when sellers actually dive into the process of a FSBO, they often realize that it isn’t all that it’s made out to be. They miss out on having the help and expertise of an agent, often times causing them to make mistakes that can cost them great amounts of money and peace of mind.
Despite their appearance, FSBOs have several disadvantages that you should consider before you decide to take the leap. As you go through these drawbacks, be honest with yourself and decide if you really can afford to list for sale by owner. You might be surprised.
Disadvantage #1: You'll Sell For Less
First, let’s talk about pricing your home. Sellers who list FSBO are usually not real estate professionals who know the market inside and out, so it can be difficult for them to accurately price their home from the get-go. Some sellers let their personal feelings take over and think that their home is so special that they end up overpricing it. Others end up underpricing their home by assuming that their home is worth the same as another home that sold near them. Either way, at the end of the day the result is the same: the home sells for less than it’s worth. In 2017, the average FSBO sold for $200,000 compared to $265,500 for agent-assisted home sales. That’s right––even with commission, you could still make more money on your home by working with an agent rather than selling it yourself.
Disadvantage #2: Marketing Can Be Difficult
Before a home can be sold, people have to hear about it and want to take a look. When working with agents, sellers usually don’t have to worry too much about the marketing piece of the transaction because their agent will take care of it for them. But with FSBOs, getting the word out is completely up to the seller. This can be tricky for sellers who don’t know the marketing strategies that have worked best in their market. In the 2018 National Association of Realtors Profile of Home Buyers and Sellers, the #1 method of FSBO marketing was no marketing at all. Coming in 2nd were yard signs, at 22%. However, only 7% of buyers stated that they found their home from a yard sign. Most buyers find their homes online, and this isn’t as common of a marketing strategy with FSBOs. Mistakes like these can cost FSBO sellers time and money down the line when their house doesn’t sell as quickly as they hoped.
Disadvantage #3: So Much Paperwork
When it comes time for their home to actually sell, many FSBO sellers aren’t prepared for the extensive amount of paperwork that comes with it. Depending on the state, there may be several different legal forms to complete which can take time for the seller to understand and fill out properly. Without the help of a professional, this can seem like a daunting task. In fact, understanding paperwork has been proven to be one of the most difficult tasks for FSBO sellers during their transaction.
Disadvantage #4: The Liability Is All On You
One of the more obvious disadvantages of a FSBO is that if you make a mistake at any point during the transaction, you’re the one who has to pay the price. There’s no agent who’s there to check your work and catch your mistakes for you before it’s too late. You might be thinking, “There’s no way I could mess up! I know my home so well.” This is a normal thought to have as a dedicated homeowner. But it’s important to remember that there are so many working parts of a real estate transaction, and even making a small mistake could create a big cost down the line. From something as big as overpricing the property to something seemingly small like mislabeling the type of flooring your home has, mistakes always happen in a real estate transaction––but in a FSBO, you’re the one who has to deal with all of them because you’re the one who’s on the hook.
Disadvantage #5: Negotiating
Another important point to remember is that the buyer isn’t the only person you’ll be working with during your transaction. On top of all of the responsibilities that come with selling your home, you also have to communicate with several other individuals and affiliated businesses every step of the way. From the buyer’s agent and buyer’s bank to the inspection and title companies, there are various people involved at every point in the sale. When you do a FSBO, you’ll have to find a way to manage effectively communicating with everyone, all by yourself.
Disadvantage #6: Takes Away Your Time
When sellers decide to list FSBO, they often don’t realize the time commitment it takes until they’re stuck at home all day waiting for potential buyers to show up. When you sell your own home, you don’t have an agent to schedule showings for you. This means that buyers can call you up at any moment wanting to come see your home. If you really want to sell, you’ll have to be available to let them in the property. This required flexibility can take away a lot of your precious time and add unnecessary stress to your life, not to mention that there’s a safety risk involved. When you’re doing everything on your own, you never know who will show up at your door. By hiring an agent, you’ll get more of your time back and not have to worry about the trouble of letting strangers into your home.
From the outside looking in, selling a home looks pretty straightforward, so it’s understandable why you might think you can handle it all on your own. But a real estate transaction is so much more complicated than simply exchanging a home for some money. Before choosing to list FSBO, assess whether or not you have the time and necessary skills to dedicate to the process. If you don’t keep up with the responsibilities, you won’t be successful.
If you’re even slightly unsure that you’d be able to handle the time commitment of a FSBO, consider talking with an agent who can provide you professional help. At HomeSmart International, we understand how precious your time is and want you to live your life without the burden of selling your own home. That’s why our agents are trained professionals whose job is to help you feel comfortable and confident through all stages of the transaction, from pricing to marketing to closing the deal and everything in between. We care about you as a person, and we’ll make sure that your home selling experience is the best it can be. Contact one of our agents today to learn how they can help you achieve your goals.