With today’s seller’s market conditions, some sellers are wondering if hiring an agent is worth the expense. After all, when homes are in such high demand, you might be able to sell without professional representation and save on real estate fees.

But before you decide if going For Sale by Owner (FSBO) is the right move for you, consider the pros and cons.

The Pros of Listing Your House For Sale by Owner

The main reason most FSBOs decide to try to sell on their own is that they want to save money on the real estate agent commission. Real estate commissions typically run between 5 and 6% of the home’s sales price, so you can save a substantial amount if you're successful in selling without an agent. Just remember that sellers typically pay both the listing agent and the buyer’s agent, so if you want to work with buyers who have an agent, you might have to pay between 2.5 and 3% of the sales price for the buyer’s agent anyway.

Another pro: in a seller’s market, you have a better-than-normal chance of successfully selling your home. Buyers are willing to look at non-traditional listings like FSBOs where there is less buyer competition when they can’t find the right home on the MLS.

And finally, when you go FSBO, you’re in complete, direct control. There’s no need to worry about misunderstandings or disagreements with your real estate agent when you’re acting as your own agent!

The Cons of Listing Your House For Sale by Owner

While the pros might sound nice, the cons of listing your home FSBO usually far outweigh the few pros.

The biggest downside to selling FSBO is that you’re not going to maximize your sales price. Year after year, homes sold by agents consistently sell for far more money than those sold FSBO. In 2020, for example, the average agent-represented home sold for 35% more than the average FSBO home. The higher price demanded by agent-represented homes far outweighs the real estate commission expense.

Here are some of the reasons for the sales price difference and some additional cons of going FSBO:

You need to have the knowledge to properly price, stage, and market your home to sell it successfully.
Without access to the MLS, you’re dramatically limiting your pool of potential buyers.
Investors often target FSBO listings to get a deal on their next investment property. If you don’t understand the market and the selling process, investors could take advantage of you.
You might not have the sales and negotiation skills required to successfully sell a home.
Properly marketing a home often comes with upfront advertising expenses. When you list with an agent, the agent pays these expenses, but when you go FSBO, you’re stuck with the costs, even if you are unable to sell your home.
Selling real estate without fully understanding the contracts and disclosures leaves you open to legal liability.

Should You List For Sale by Owner or Hire a Real Estate Agent?

There are only two times when it is statistically beneficial to go FSBO:

When the sale is not intended to be an arms-length transaction. If you’re selling to a family member for less than market value just to keep the property in the family, you might not need agent representation.
When you have direct real estate industry experience and buyer connections.

If you don’t fall into one of these two narrow categories, your best bet to maximize profits and sell quickly is to list your home with a professional real estate agent. Contact Sequoia Real Estate today for a free, no-obligation with an experienced listing agent, and see how much you can get for your home in today’s hot market.