Listing vs. For Sale by Owner (FSBO)

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Aaah, the question the majority of homeowners wrestle with.  Should I list my home or should I try to sell it myself?

When my husband and I ask FSBO’s why they are choosing to sell on their own, 99% of the time time it comes down to them wanting to “save on the commissions” and the other 1% is because they sold a home on their own before.  I will save the commissions discussion for the end of this post.

Though both of these reasons sound rational, that is not always the case.  Selling a home on your own is typically chance and luck.  There are plenty of stories of success, but there are even more that failed.  Aside from the obvious risk of letting strangers into your home in today’s world, there are other issues that may hinder a successful sale as a FSBO.

The main one is usually pricing the home.  Many homeowners don’t realize that pricing a home is a skillful undertaking.  There is much more to it than knowing what your neighbor sold their home for and adding in your “improvements”.  Each home is unique in its amenities, condition and updates/upgrades.  Square footage, number of garages, pool and other features of a home area all factored in with a numerical value and adjusted to arrive at a list price.

That’s where hiring a seasoned agent who can show you HOW he/she came up with their valuation is important.  A real estate agent valuation should show you specific numbers in adjustments to substantiate their recommended Brokers Price Opinion/CMA.  After all, you don’t want to spend time on the market only to have to continually re-price the property because you started too high.

Most FSBOs have listed with a brokerage before, and when their home failed to sell, they gave up on all Realtors.  Remember, every profession has their good and bad apples, real estate is no different.  I am sure if you think about your own profession you can find people who are great and others who do the bare minimum.  There are good agents out there and we built our business and reputation on being one of the best.

The next issue facing FSBO is buyer qualification.  Do you truly know that a buyer you allowed into your home can even afford to actually buy it?  There are pre-approvals and there are pre-qualifications. There is a difference.  A knowledgeable Realtor will be able to explain the difference to you and advise you on which offer to choose when they come in. Remember, price is not always the best deciding factor on a home sale.

The 3rd issue is all the contingencies in a sales and purchase contract.  Do you know when you can legally go after a buyer’s deposit?  What happens after an inspection on a “Right to Inspect AS-IS” contract?  How long should you give a buyer seeking a loan to give you the loan commitment?  What protection clauses should you add to a sales contract if your buyer has to sell their home first in order to purchase yours?

I cannot tell you how many stories in my almost 2 decades of business I have heard and how many FSBO’s let their deposit walk right out the door with the failed sale. Or gave too much time for a loan commitment and did not find out until their entire home was all packed up!

What about marketing your home?  You need professional photography and good “copy” about your property to attract buyers.  What’s the point of doing all those renovations and upgrades if your photos of the kitchen only show the stove and part of the counter tops? Buyers need to see value and justification for the asking price.

I have to confess there are still agents out there taking photos of their listings with cell phones, blurry photos, and more.  And I have seen some FSBO’s listings with fantastic photos.  But photos alone don’t always tell the full story about why someone should buy your home.  We do full HD photography and videos.  After all, with so many properties for sale, you must grab the attention of a home buyer quickly and keep it.  That’s where the immersion of full video content shines.  We showcase the essence of your home and market the lifestyle.  We show buyers what you called it “home” and what makes your property unique compared to all others in the community.

And the number one reason – commissions is really a non-issue if you think about it logically.  If you sell on your own, you continue to pay the monthly cost of home ownership( mortgage(s), property tax, electricity, property maintenance, HOA fees, etc).  Typically you are going to purchase a new home, and the cost of that new home, more times than not, will be more than you are selling your home for and the longer you stay on the market with your home sale, the more you will pay for the next home as homes appreciate.

So, let’s do the math, if you stay in your current property as a FSBO for 6 months – add up the cost as mentioned earlier. You will more than likely see that you actually would have saved money with a motivated and proactive Realtor (hint..the Bortz Team) who would have sold the home sooner.

The cost of the commissions typically is a lot less than the cost to continue to carry the home while you are a FSBO.  So, you don’t actually save money..you lost money.

So if you are trying to decide between listing your home or being a FSBO, think about the facts I discussed and give us a call.  We will be happy to do a detailed seller’s net sheet for you, showing you your closing costs, including prorations for property tax, etc., so that you have a true picture of your “walk-a-way” dollars/net.