Owner Selling Home FSBO – SETTING THE RECORD STRAIGHT
I recently came across a Zillow article talking about owners selling as For Sale by Owner vs using a Real estate professional.
The number of FSBO transactions for 2019 actually dropped to 7% of all home sales. The steady drop can be traced back to 1981 when FSBO accounted for 15% of all sales.
According to NAR, most FSBOs who did find a buyer, sold to a friend, relative or neighbor. This also resulted in a lower sale price than if it had been listed with an agent. Zillow states that 11% of FSBO actually sell their property on their own with the largest majority hiring an agent to get it sold.
90% of MLS listings using a real estate agent identified these top five benefits:
- More effective marketing 20%
- Assist with competitive pricing strategy 20%
- Sell home within specific timeframe 19%
- Find a buyer 14%
- Offer guidance on repairs & improvements to sell better 14%
There are several reasons why a homeowner would choose to forego the use of a real estate professional. We’ll go over the top five.
Avoid paying a listing commission. SOMEWHAT TRUE
Obviously, this is the number reason why some homeowners are willing to give it a try. I totally understand that. In fact, many years prior to obtaining my real estate license, I too went down that road. Commissions average from 4%-6% depending on your state. They are split evenly between the listing broker and the selling broker who brings the buyer.
Many FSBOs realize that refusing to work with Realtors is equivalent to shooting themselves in the foot. More often than not, they are willing to work with Buyer’s Agents and pay them their commission.
You’ll have complete control over your listing price. MISCONCEPTION
Zillow states, “without an agent, you’re the sole decision-maker when it comes to your list price.” This statement alone is extremely misleading. As a homeowner, you always have full control of your listing price. In fact, no listing price changes can be implemented without your signature on an MLS form giving consent.
A good Realtor will offer more than one pricing strategy to the homeowner. Agents can offer a great deal of insightful information that is often out of reach to the general public. As part of our training,
Realtors are shown how to obtain and decipher data made available through the Multiple Listing System (a subscription service for licensed real estate agents only) to determine pricing, trends and more. That’s valuable information that is then used to help the homeowner make an informed decision on what strategy they’d like to employ when listing their home.
The point is, as a homeowner, what you list your home at and whether or not you choose to have a price deduction is always 100% in your control, not the agent.
You can manage the showings and open houses. MISCONCEPTION
Gone are the days of running out of the house to accommodate a last-minute showing. With today’s technology, homeowners can set specific days/times available for showings. When a showing is scheduled they can choose to receive a call, text message and/or email notifying them of the showing request which they can either approve or decline. This gives homeowners full control over showing requests.
You’re motivated to sell for top dollar. – MISCONCEPTION
That statement is totally ignorant of what Realtors do for each listing. What agent isn’t motivated to sell your house for top dollar? A listing agent has already spent a great deal of his/her time filling in forms, sending emails, sending out notices and hiring third parties as part and parcel of listing your home for sale. There’s a whole lot more that goes on when an offer is received and accepted by the seller.
Granted some are willing to put a lot more skin in the game than others. For instance, I hire a professional photographer, set up a website that specifically highlights your listing, set up a marketing and advertising plan that expands your listings exposure well outside of the public search sites like Zillow, Trulia, Realtor, etc. Online advertising expensive, and it’s all paid upfront before a single buyer offer is received. Although I can drive the traffic to your door, every decision related to the sale of your house is 100% yours to make.
You’re the neighborhood expert. – TRUE
True. Working with a professional real estate agent is a partnership. Combining your knowledge of the neighborhood with the advanced skills, expertise, and knowledge of the market that a Realtor brings is why homes get sold and why Realtors are highly rated among homeowners.
I’ve been working as a full-time Realtor in the Southeast area of Michigan since 2015. I can count the number of times a homebuyer has asked to see a house advertised as an FSBO on one hand. Very few do, but why?
It’s not because I steer them away. i never do. I think it’s because the homebuyer considers FSBO as too risky. They don’t trust the homeowner to offer up truthful information about the property or assume they must be overpriced. Homebuyers feel considerably more confident about purchasing a house that has a Realtor representing it because that professional will make sure all guidelines and laws are followed. After all, their license and livelihood are at stake with each listing.
The few times I’ve had a client of mine request to see a house listed as FSBO, I call the homeowner. If they are willing to work with me and sign a form to that effect, then I go ahead and arrange the showing for my buyer.
Your Two Cents
Are you thinking of selling on your own? What are the most important factors affecting your decision? Have you tried selling as FSBO in the past? If so, what was that experience like, did you end up selling to family or friends or another neighbor? Share your experiences here. Thanks!