For-Sale-by-Owner, or FSBO, transactions are commonly seen in seller’s markets or whenever homeowners want to maximize their profits by not having to pay commission.
However, statistics show that selling your home with the assistance of a professional real estate agent will garner you a higher profit, enough to cover the commission as well as put more money in your.
If you choose to sell your home on your own, you’ll be negotiating and relying on your own skill to finalize a contract, leaving yourself open to potential legal problems and a smaller profit when all is said and done.
Here are some of the top reasons why FSBO home sales can go very wrong.
1. Marketing your home online isn’t as easy as you think
Buyers always start online, and FSBO sellers are unlikely to get the exposure they need on a number of listings websites to reach their audience.
2. You could price your home wrong
Those who put their homes on the market as FSBO tend to set a price based on an online assessment tool or the lofty sum that the neighbor down the street claims they were offered—two methods that are liable to put the listing price way off.
How an agent can help: A real estate agent will provide an accurate home value based on a comprehensive market analysis to help you arrive at the right listing price.
3. You could underestimate (or overestimate) how much money to spend on curb appeal
On the flip side, you might end up investing far more money than is needed. Hooper had sellers who were convinced they had to totally overhaul their 35-year-old kitchen and floors to the tune of about $50,000. Instead, she advised a $10,000 investment for paint, staging, and minor repairs, which still netted $45,000 above their target price.
How an agent can help: Even if you’re not up for a full home makeover, your agent has an eye for detail and can recommend simple, budget-conscious swaps that can translate into real dollars when it comes negotiation time.
4. Showings are a drag
FSBO sellers don’t realize how draining it can be to set up showings. And on top of scheduling actual potential buyers, you also have to deal with both looky-loos (gawkers with no intention of buying the house) and “sharks,” (investors looking to flip your house for a profit).
How an agent can help: Your agent will handle all the scheduling and staff the tours for you, so all you have to do is quickly tidy up and vacate.
5. Preparing your own paperwork can be tricky
Unless you have a background in contracts or law, you might want to leave the paperwork to the pros. The closing process can entail more than 20 pages of complicated paperwork, including the contract and addendums designed to cover all of the situations that could go wrong.
How an agent can help: Your agent will take care of all property disclosures and corresponding documentation to avoid future liability.
