When you sell your house on your own, it’s referred to as a “do-it-yourself” “It may appear that selling a property “for sale by owner” (FSBO) is a terrific way to save thousands of dollars. After all, the typical real estate commission ranges from 5% to 6%, or $12,500 to $15,000 on a $250,000 home. 1 Given the enormity of this cost, you may believe that saving money by acting as your own seller’s agent is a no-brainer. Here are eight reasons why you should think twice.
1. Realtors are prohibited from showing a “For Sale By Owner” property.
In tulum luxury condos for sale, the buyer’s agent is aware that there will be no professional colleague on the opposite side of the transaction. Even if a customer is adamant about seeing your house, the agent may advise against making an offer, stressing the difficulties and hazards of closing a sale without a professional representing the seller—and without a guaranteed commission.
“I only present an FSBO for two reasons: there is no other inventory available or the price is unbelievably low,” says Bruce Ailion, a realtor with RE/MAX Town & Country in Alpharetta, Ga., near Atlanta. An FSBO transaction in which the seller did not pay the whole negotiated commission—or any commission at all—to the agent who brought the buyer has generally burned experienced brokers, according to Ailion. “FSBO sellers are seen as unrealistic, unreasonable, and tough sellers who have been rejected by professional agents,” he says.
Even so, there are buyers’ agents that will show your home if the conditions are perfect. This could entail signing a contract with the agent outlining the percentage fee you, the seller, will pay the agent. (The agent may request a 6% commission in order to secure both the buyer’s and seller’s sides.) Instead, reduce the total commission to a more manageable 2 percent to 3%.) A contract should also state that the agent is only representing the buyer. It may also indicate that, as the buyer’s representative, the real estate agent has a responsibility to reveal to the client all information provided by the seller, such as the requirement to sell by a specific date.
It’s better to engage a real estate agent than to try to sell your property yourself if you want to be taken seriously by sellers’ agents, obtain the greatest price, and ensure you don’t skip any critical steps in the process—or face a lawsuit.
2. Agents Stay Away From Emotional Sales
Selling a property is usually an emotional experience. Using an agent keeps you one step removed from the process and reduces your chances of making costly mistakes like overpricing your house, refusing to contest a low offer because you’re insulted, or caving in too readily when you’re on a tight deadline. “A realtor may follow up without conveying a sense of urgency or despair; it’s their job,” Ailion explains. “When a seller checks multiple times, it indicates, correctly or incorrectly, a willingness to accept a lesser price.”
If you don’t use an agent, you’ll have to deal with rejection on your own every time a buyer’s representative says the client isn’t interested. “As a homeowner, hearing some of the statements made by purchasers and, oftentimes, their agents can be pretty unpleasant,” says David Kean, a realtor with Beverly & Co. in Beverly Hills, Calif.
An agency may take the sting out of a rejection and turn any negative feedback into something positive. “Because there’s no third party to bounce things off of, it’s more difficult for [the seller] to keep their emotions out of the sale,” says real estate broker Jesse Gonzalez, president and creator of North Bay Capital in Santa Rosa, Calif. “For example, if a home sits on the market for a long time, the owners has no idea why it isn’t selling.”
“Emotions will always be present for the seller,” Gonzalez continues, “but constructive criticism from a broker who is on their side and trying to get the best for them can be easier to take.”
3. Buying and selling real estate is a full-time job.
Is it possible for you to rush home from work every time someone requests a tour of your home? When your phone rings with a potential buyer, can you excuse yourself from a meeting? Do you have the energy at the end of a hard day to take advantage of every possible chance to advertise your home? Are you an expert in the field of real estate marketing?
Do you have any prior experience with this? The most likely response to all of these questions is “no.” All of these inquiries are answered affirmatively by an agent. You’ll also get a lockbox for your front door if you go through an agency, which allows agents to show your house even if you’re not available.
4. Agents are able to connect to large networks.
Yes, you can use Zillow, Redfin, Craigslist, and even the multiple listing service (MLS) that brokers use to advertise your home. Will that, however, be sufficient? Even if you have a large personal or professional network, those people are unlikely to spread the word about your house being for sale. You don’t have any relationships with clients, other agents, or a real estate firm to help you find the best purchasers for your house. A smaller pool of possible buyers equals less demand for your home, which means you’ll have to wait longer to sell it and could not get as much money as it’s worth.
“A smart real estate agent should have a Rolodex of names and contact information,” says Pej Barlavi, owner and CEO of Barlavi Realty in New York City, “so they can immediately spread the news about the property they just listed.” “I have a mailing list of over 3,500 people who receive an email blast from me within 48 hours of a property being listed.” Then I begin to market the home on every available website, MLS, and real estate website in order to maintain momentum and [to keep] showings consistent.”
5. Getting Rid of Ineligible Buyers
An agent can determine whether a visitor to your home is a qualified buyer or simply a daydreamer or curious neighbor. Every time you have to put your life on wait, make your house seem flawless, and show your home, it’s a lot of effort and a significant disruption. You want to keep the showings that are most likely to result in a sale to a minimum.
“Realtors are taught to ask qualifying questions in order to assess a prospect’s earnestness, qualification, and motivation,” adds Ailion. Realtors are also taught to ask closing questions such as how long buyers have been looking, whether they’ve seen any other properties that would suit their needs, if they’re paying cash or have been prequalified, what schools they want, and so on. They have the ability to get a qualified and motivated person to make a purchase. He claims that FSBO sellers lack this training and skill set.
When buyers view a home, it’s also awkward for them to be accompanied by the seller rather than the seller’s agent. “The owner should never be present when presenting a house,” adds Kean. “Nothing makes a potential buyer feel more uneasy than the presence of the current owner.” Most purchasers speed through a house when a seller is present and don’t observe or recall much of what they see.”
6. Negotiating Prices Requires Skill
You don’t have specialist experience negotiating a property sale, even if you have sales experience. Because the buyer’s agent knows what they’re doing, they’re more likely to win the negotiation, which means less money in your pocket. “Hundreds of property acquisitions may have been arranged by an experienced selling agent,” adds Kean. “We’re well-versed in all the tricks, as well as the warning signals of an anxious or dishonest customer.”
You’re not only inexperienced; you’re also likely to be emotional about the process, and you’re more likely to make terrible decisions without your own agent to point out when you’re being irrational. Instead of an aggrieved seller responding to a buyer with an emotionally charged, improper answer, an agent, according to Kean, will say something more professional such, “The seller has denied your initial request but has made the following counteroffer.”
Sellers who sell on their own are usually unfamiliar with local customs and market conditions. “Agents know the pulse of the market and what’s driving demand,” says Rob McGarty, owner and designated broker with Bushwick Real Estate in Seattle. “This provides them an advantage by recognizing what parameters are worth bargaining for and which are worth letting the other party win.”
Furthermore, according to Gonzalez, agents are familiar with local customs for selling a home, such as whether transfer taxes and closing costs are typically paid by the buyer or the seller.
7. You are unconcerned about the flaws in your home.
Agents are experts in the factors that influence the sale of a home. They can accompany you on a tour of your home and point out changes that need to be made in order to attract buyers and receive the best offers. They can spot problems you’re blind to because you see them every day—or simply don’t consider them flaws. They can also assist you in determining which feedback from potential buyers you should act on after you put your house on the market in order to increase the likelihood of it selling.
“Anyone who is serious about selling their home should hire an interior designer or a property stager to analyze the home’s existing condition and market appeal,” Kean advises. “Before putting a home on the market, all sellers should employ a professional cleaning service to give it a thorough cleaning.” A thorough cleaning will aid in the removal of any distinctive odors, such as dogs, that the residents are unable to detect because they live with them every day.”
Exposure to Legal Risks is number eight on the list.
A property sale involves a lot of legal documentation, which must be performed appropriately by a professional. The seller’s disclosures are one of the most significant factors to consider. According to attorney Matthew Ryan Reischer, founder and CEO of LegalAdvice.com, “a seller of real estate has an affirmative responsibility to disclose any truth that materially impacts the value or desirability of the property.” If a vendor fails to disclose information appropriately, they may be held accountable for fraud, negligence, or breach of contract. “The issue of whether or not a fact is relevant is normally established in case law in the state where you live,” explains Reischer.
Unless you’re a real estate lawyer, your agent is likely to be more knowledgeable about disclosure rules than you are. If you fail to disclose a hazard, nuisance, or flaw, and the buyer contacts you after moving in and discovering a problem, the buyer may file a lawsuit against you. Agents make mistakes, too, but they’re covered by professional errors and omissions insurance, which protects them and gives the buyer recourse, so the buyer may not need to sue the seller for damages.
Learning how to sell your home without a realtor is a difficult undertaking, and selling your home is likely to be one of the most significant financial transactions you’ll ever do. You can save money by doing it yourself, but there are several benefits to hiring an agent. Agents can help you get your house more publicity, assist you negotiate a better bargain, devote more time to the sale, and keep your emotions from ruining it. An agent brings experience to a complex transaction with many possible financial and legal dangers, which few FSBO sellers have.