Selling a home For Sale by Owner (FSBO) may seem like a way to save money on real estate commissions, but it can actually be a costly mistake. While some homeowners may successfully sell their homes without the help of a realtor, there are many potential drawbacks to selling FSBO, and it may end up costing the homeowner money in the long run. Here are a few reasons why selling FSBO is a bad idea and how it may lead to a financial loss for the homeowner:
Lack of exposure
One of the biggest challenges of selling FSBO is getting your home in front of the right buyers. Real estate agents have access to a wide network of buyers and can market your home to a larger audience through various platforms such as the Multiple Listing Service (MLS), social media, and other professional networks. According to the National Association of Realtors (NAR), only 8% of FSBO homes are sold to buyers who found the home through the internet, while 92% of buyers found their home through a real estate agent.
Pricing your home too high
Without the expertise of a realtor, it can be difficult to accurately price your home. Realtors have access to comparable home sales data and can provide you with a realistic market value for your home. According to NAR, FSBO homes sell for an average of $200,000, while homes sold by an agent sell for an average of $265,500. This means that FSBO sellers may miss out on thousands of dollars in potential profits by pricing their homes too high. Get a Free Home Valuation Report
Legal and paperwork complications
Selling a home can be a complex process with a lot of paperwork and legal requirements. Real estate agents are familiar with the legal and paperwork requirements, and can help ensure that everything is done correctly. FSBO sellers may not have the knowledge or resources to navigate these complexities, which can lead to delays and legal issues.
Difficulty handling negotiations
Negotiating a home sale can be a delicate process, and FSBO sellers may not have the experience or knowledge to handle negotiations effectively. Real estate agents are trained to handle negotiations and can help ensure that the best deal is reached for their clients.
No protection against liability
Real estate agents are licensed professionals who carry errors and omissions insurance to protect their clients from liability. FSBO sellers do not have this protection and may be held liable for any mistakes made during the sale process..
What the studies say:
- According to the National Association of Realtors (NAR), only 8% of FSBO homes are sold to buyers who found the home through the internet, while 92% of buyers found their home through a real estate agent.
- NAR also found that the typical FSBO home sold for $200,000 compared to $265,500 for agent-assisted home sales. This means that FSBO sellers may miss out on thousands of dollars in potential profits by pricing their homes too high.
- A study by Collateral Analytics found that homes sold by agents sold for a median of $65,000 more than homes sold by the owners.
- A study by Redfin found that FSBO homes sold for $65,000 less than homes sold by agents.
- According to a study by Homes.com, only 10% of homes sold FSBO actually sell.
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These statistics and references suggest that most buyers use a real estate agent to find a home, and homes sold by agents tend to sell for a higher price than FSBO homes. Additionally, a low percentage of FSBO homes actually sell which shows that the process can be challenging and complex.
If you want to get a good deal on your home let’s schedule a free consultation and see if we can reach an agreement that works for your budget!
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