It can be stressful to sell a house. It takes a lot to find the perfect buyer, especially if you want to sell quickly. This is a costly undertaking. Sellers are responsible for many fees, including commissions for the real estate agents on both sides of the sale. According to Realtor.com closing costs can be anywhere from 6 to 10 percent of the sale price.
This doesn’t include additional costs such as staging the home and moving after it is sold. Many homeowners consider selling their home as a For Sale By Owner (FSBO) to save money and keep as much as possible.
Selling your home on your own may seem like a great way to save money and avoid paying commissions to agents. Selling a house, however, is not an easy task that anyone can master.
For Sale by Owner can be a costly and time-consuming process for many people. It can also have serious legal implications. How do you determine if this is the right route for you? Here’s a quick primer on For Sale By Owner. There are also some important considerations you should keep in mind.
What does “For Sale by Owner” mean?
Although the information is fairly straightforward, sellers need to be aware of a few details about For Sale By Owner before they pursue it. You can sell your home by yourself, which means you don’t pay commissions and you also take on the responsibility of all the work and liabilities you would normally hire a real estate agent to do.
Selling your home by yourself is a huge undertaking. It is a big task to research comparable properties in your area and determine a market price for your property. You will also need to manage all marketing, paperwork, and legal compliance involved in selling a house.
A mistake in any one of these areas could lead to financial and legal consequences that could have been avoided if you had a licensed, experienced agent.
If you are interested in a For Sale By Owner, make sure you check the laws in your particular state.
What is the controversy?
It is not uncommon for homeowners to decide to sell their homes on their own, but many don’t appreciate the details and the multitude of skills agents have. It’s not recommended for new sellers. Inexperienced sellers will often face many challenges when trying to sell their property on their own.
They’ll need to handle a lot more paperwork and avoid being scammed. A small error can cause serious financial and legal problems for the seller. For Sale by Owner is a big risk.
When is For Sale by Owner the best choice?
Real estate transactions don’t always come with a lot of difficulties. In some cases, it can be a wise decision to go For Sale By Owner. A good example is if you have an interested buyer who is strong and reliable. You can work with an appraiser and a real estate attorney to determine a fair value for the property.
There is no need to have a buyer to sell your home, but you want to be able to manage the risk of selling by yourself. You can market your home online, do some research on staging and legal issues, and then list it. It’s not unusual for it to seem overwhelming. After all, there’s a reason real estate agents are paid so much.
What is the best alternative to For Sale By Owner?
The best and most popular alternative to For Sale By Owner is using a discount real estate broker. A discount broker or discount agent is a real estate professional that performs the job of a real estate agent, but for a heavily discounted rate.
Some discount real estate brokers discount the commission percentage and some use a flat fee model. Either option can save home sellers thousands of dollars. Usually, the agent will perform all of the usual duties expected from a traditional real estate agent, but some may not offer certain things. Therefore, it is important to ask the broker before signing up.
What is the difference between selling with an agent and For Sale By Owner?
Are you still unsure if a For Sale By Owner is right for you? These statistics from the National Association of Realtors will give you a clear picture of what you are getting into if an FSBO is chosen.
For sale by owner homes are less expensive. The NAR reports that the average FSBO home sold in 2020 for $217,900. The average agent-assisted home was sold for $242,300.
It is rare to find a property For Sale By Owner. FSBO can be costly, so sellers often decide that it is not worth the effort. In 2020, FSBOs were only 4.94 percent of all home sales.
FSBOs are difficult to sell your home. Your ability to market your home effectively is key to finding the right buyer. Statistics show that those trying to sell a home by owner aren’t always marketing in the right places. Yard signs are the most effective marketing tool for FSBOs.
In fact, 35 percent of FSBO sellers use this method. In contrast, only 7 percent of buyers found their homes that way in 2020. What about word-of-mouth? This was used by 24 percent of FSBO sellers, but only 6 percent of buyers found their homes this way.
What is the takeaway?
It is your right in most states to do a For Sale By Owner. It’s up for debate whether this is the best option for your home sale. A discount real estate agent can help you avoid many of the common problems that FSBOs pose. Many people find the value of real estate agents is worth the commissions, especially the shifting legal liability.
Do your research before you make a For Sale By Owner. Make sure you understand the challenges that you will face. You will be better prepared for any significant financial transaction.