Home Sellers Frequently Asked Questions
Realtors® vs For Sale By Owners
- Commission- According to www.realtor.org, 8% of home sales were through For Sale By owner, FSBO, in 2014, which means 8% of homeowners sold their homes without paying commission. However, while the For Sale By Owner homes sold in average for $210,000, the homes sold through Realtors® fetched a whopping $39,000 more averaging at $249,000. That is a staggering 18.5% more for trying to save 6% in commission!
- Pricing a Home- The pricing is one of the most crucial steps in selling homes. An overpriced home will stay on the market for a long period of time until either the price is reduced or the market catches up. On the other hand, an underpriced home simply means a financial loss to the homeowners. Most FSBO home sellers are in a guessing game when it comes to pricing their homes, while Realtors® have the knowledge and tools to price and sell a home at a Fair Market Value. As a matter of fact, some of the initial pre-licensing training for Realtors® is very similar to that of the Appraisers.
- Time- When priced correctly, most listings sell in average Days On Market by Realtors®, while only 18% of FSBO sold homes sold within this timeframe.
- Negotiation- Most often FSBO home sellers fail to correctly negotiate the price and terms. These negotiations do not stop at the agreed price and continue all through the transactions. Most often the results of the inspection report or appraisal will trigger another round of negotiation, which requires the expertise of real estate professionals to achieve a better outcome.
- Documents and Timelines- Most FSBO home sellers are not familiar with the legal documents while negotiating and signing complicated documents. They also fail in following up with the timelines in these documents, which may cause a default on the contract and possible financial loss.
- Marketing- Homeowners selling their homes through For Sale By Owner services don’t have the access or resources for implementing a marketing plan. The real estate professionals have many resources available to them, which like the MLS system may not be available for FSBO home sellers. They also have the bulk advertising budget through their companies to market their listings in local newspapers or through direct mail to the targeted audience.
- Dealing with Buyers- The rule number 1 in bringing buyers to preview a home is not to have the seller around, which FSBO sellers cannot avoid this. The main reason for not having both party in the same place remains in the attachment of the sellers to their property, which at times has become a turnoff to the buyer especially when the seller turns argumentative about buyers mention about the negative aspects of the house.
- Dealing with Inspectors, Appraisers, and Title Companies- Dealing with different parties involved in a transaction is second nature for Realtors®, but it could become an overwhelming task for homeowners who are not used to the ups and downs and glitches associated with buying or selling real estate.