For Sale By Owner vs. Listing Agent
If you don’t have an election hangover it’s probably because you didn’t realize there was presidential election going. But of course that’s impossible. In fact, millions are still trying to figure out what happened. It was a contest between Trump and Hillary that will last the ages and people had the choice of one or the other. Another choice that consumers have is how to sell a home, either on their own or use a real estate agent.
The real estate industry refers to a property for sale by the owner as a FSBO (FIZZ-bow). The owner’s thinking here is to save some money at the closing table by eliminating the real estate agent’s commission which might represent 6.0% of the sales price. That’s a lot of money in the owner’s eye and it is real dollars. On a $500,000 sale, that represents $30,000 that goes to the real estate brokerage. Who wouldn’t want to hold onto that kind of money? Yet it’s really short sighted. The owners, trying to save money, could very well lose much more by selling on their own. How?
The real estate agent knows how to sell real estate at the highest price and for the best use. This isn’t guesswork on the agent’s price but as a result of experience, marketing and access to data the everyday consumer simply doesn’t have. The agent knows how to prepare a home for market for its best possible appearance. How does the home look from the street? Is the interior too cluttered? Does a fresh coat of paint sound like a good idea? The agent will construct a thorough Comparative Market Analysis using data from previous sales, demographics and trends. It’s in the agent’s best interest to sell the property for the highest price. But also at the right price.
With a FSBO, the only data an owner has access to is recent sales and other listings obtained online, typically from another real estate agent’s website. Yet owners can get too emotional when establishing a list price and be rather stubborn on the price when an offer is made. If the price is too high, the home will sit. If the home is priced too low and an offer is made within a day of the hone going on the market, the home was priced way too low and the owner lost thousands.
With a FSBO, there is no way to match the marketing prowess a real estate agent has. A FSBO can’t list the home on the local MLS. A FSBO doesn’t have the database of potential buyers already in their database. A FSBO can’t bring in the number of potential buyers. It’s interesting to note that in some markets, sellers will offer a higher commission than what is customary for the area to draw more interest from other buyer agents. You’re a professional at what you do, let the professional agent do what they do best- sell your home.