Most real estate agents will tell you not to even consider listing your home for sale by owner (FSBO). And those agents mean well. They know that, statistically, homes sold by real estate agents sell faster and for more money than FSBO properties.
But many homeowners still want to learn more about the possibility of going FSBO before deciding if listing with an agent is better for them. At Sequoia Real Estate, we’re all about empowering buyers and sellers with information to make the best choices for their unique situations. So we’re going to give you the facts on going FSBO.
Here are the pros and cons of listing your home for sale by owner.
Pros of Listing Your Home For Sale By Owner
First, let’s talk about the advantages of going FSBO:
You save on real estate commissions. In most markets, sellers pay 6% of the sales price to cover real estate agent fees.
Sites like Zillow and FSBO.com make it easy to list your home. All you need to do is create an account, provide the property details and some photos, and you’re done. In most cases, listing your home on these sites can help you generate some interest.
Showing a house isn’t that hard. If we’re being honest, most agents love showing homes! It’s usually fun and exciting. And while there are some industry insider tips agents employ during showings, you can easily find these online.
The Downsides to Listing for Sale By Owner
Ok, now let’s list the reasons why going FSBO might not be a good fit for you:
Agent-listed homes sell faster and for more money. This is statistically confirmed, year after year. The most recent data (from 2020) shows that the typical FSBO home sold for $260,000 compared to $318,000 for agent-assisted home sales. In nearly all cases, the amount you pay in real estate commissions is more-than-covered by the higher sales price.
You’ll probably still need to pay the buyer’s agent. In our current system, buyer’s agents are paid out of the commission you pay to your listing agent. The listing agent typically splits the commission 50/50 with the buyer’s agent. Since this is the norm, buyers are not likely to pay their own agent to purchase your home; they’ll look at agent-listed homes instead.
Pricing correctly required in-depth market knowledge. Zillow’s Zestimates are laughably inaccurate, proving that you need specialized local market knowledge to price a property correctly. The only way to properly value a home is to complete a comparative market analysis (CMA), adjusting prices from recent sales to determine the appropriate value for your home. If you’ve never done one before, it’s an intimidating process. By the way, we offer CMAs for free, so you can contact us any time to get the current value of your home.
FSBOs attract a certain type of buyer. The interest you generate from listing your home FSBO will mostly be from experienced real estate investors who are looking to get a good deal. They will very likely lowball you.
Selling a house takes a lot of time and energy. Showing homes is fun. Actually selling them is work. It’s a testament to real estate professionals that the general public thinks or job looks easy. You will likely be shocked at how much time you spend fielding inquiries, scheduling showings, and conducting showings, only to come up with zero offers.
You need a marketing budget. Listing your FSBO on a few websites will only get you so far. In most cases, you’ll also need to budget for marketing expenses like professional listing photos, social media ads, and listings in local publications. When you list with an agent, the agent covers these expenses for you.
You leave yourself open to liability. What happens when you get an offer? Do you know which forms you’re legally required to provide to your buyers? Do you know what you’re required to disclose? What will you do if there’s a problem with the home inspection, appraisal, or buyer’s financing? Listing agents handle all of this for you. And they do it with professional knowledge and expertise, minimizing your liability.
How to Get the Best Listing Agent for Your Home
You can probably see why so many agents are quick to dismiss the idea of going FSBO. Unless there are extenuating circumstances (like you’re selling directly to a friend or family member), it truly is in your best interest to hire a listing agent. And choosing the right listing agent is critical to making the most of your home sale. Take a look at our simple 3-step process for getting the best listing agent for your home.
Whether you’re ready to sell today or you just have questions about the process, contact us. We have a team of experienced professionals who are happy to discuss your options with you in a friendly, no-obligation consultation.