Before we go any further, understand it is not lost on us that a post by a REALTOR® about For-Sale-by-Owner (FSBO) homes is like a cow talking about the benefits of eating more chicken. We get the inherent bias.
However, if you are considering selling your own home, there are still many factors to take into consideration (take it with a grain of salt if you must).
So, why do some people choose to take on the task of FSBO?
The top reason people choose to sell their own homes is to save money by avoiding a Realtor commission.
There are no “standard” real estate agent fees that can be charged by an agent or broker, and real estate commission rates are split between the listing agent and the agent or broker that brings the buyer to the transaction.
In Massachusetts, the majority of commissions fall between 2% and 3% for each real estate professional, making the average real estate commission rate for selling a home between 5% and 6%.
On the flip side, the top reason people choose to use a real estate agent – we call it the three P’s: Price, Process and Peace-of-Mind.
You could build your house too, if you really wanted to. The information is out there for sure. But the time, energy and effort it would take you to accomplish something an experienced builder already knows how to do, doesn’t make it worth your time.
Same goes for selling your home. The complexity of real estate transactions is increasing. Changing regulations and fluctuating markets have made real estate a logistical minefield, and one misstep can put you in all kinds of trouble – legal, financial, (emotional, if you include the stress factor).
According to the National Association of REALTORS, the most difficult tasks for FSBO Sellers:
Getting the right price: 12%
Understanding and performing paperwork: 11%
Having enough time to devote to all aspects of the sale: 6%
Preparing/fixing up home for sale: 5%
Selling within the planned length of time: 5%
In a 2012 HomeGain survey of FSBO verses REALTOR® home sellers, 66% of the home owners who used a REALTOR were able to successfully sell their home compared to 30% of for-sale-by-owners.
In addition, the survey found that 22% of FSBO eventually decided to use a REALTOR to try to sell their home. More than half of those who did were then able to sell their homes too, the survey found.
And the end of the day, it is your choice. Plenty of people have success selling their own homes, and you might, too.
But first, do your research. Talk to other people who have both successfully and unsuccessfully attempted FSBO. Talk to a real estate professional, talk to a mortgage broker, lawyer and lender for their opinions – it’s no skin off their back whether you choose to use a REALTOR or not.
Bottom line: Get the whole story, including all of the grains of salt so you have a
flavor for what you are about to take on. And also so you don’t bite off more
than you can chew.