FSBO vs. Real Estate Agent

So you’ve decided to sell your home and you are tempted to sell it yourself… For Sale By Owner, FSBO, Fizbo, etc.  For some, a FSBO is the way to go and they can reach all of their home selling goals.  However, while a prospective FSBO’s determination and sense of economy is to be admired, have they truly considered everything involved with a FSBO and what potential disadvantages a FSBO has?  There are a large number of things to consider prior to going FSBO but here are just a few:

Do you know how to prepare your house for sale?

While you may love your extensive collection of birdhouses, will it turn-off prospective buyers?  That wall of memories that includes photos of every event of your child’s life?  Sorry, it needs to go.  Remember, you’re not selling the home you live in.  You’re selling property that someone else can envision as their home.   Can you make that distinction? 

Do you know how to price your property properly? 

It’s fairly easy to “take a shot” at pricing your property.  But what if you’re wrong?  If you are too high then your house sits on the market and you keep spending money on whatever advertising you decide to do.  Meanwhile, the price of homes continues to drop and you chase the market price down.  You may end up selling your home eventually, but what did the “chase” cost you?  Maybe you price too low and you leave money on the table.  Simply put, the information that a licensed real estate agent has access to is vastly superior to non-licensed individuals.  Do you really want to determine the selling price of your largest asset based on partial information you may have?

Are you prepared to spend your money up front?

In most cases, the listing agent funds the marketing efforts on a listing and re-coups those costs after the property sells (we hope).  A FSBO seller must front all costs.  If the property does not sell then the FSBO seller simply lost the money spent. The nice thing about sales commissions is you don’t pay them until the result you want actually occurs… your house sells. 

Do you know how to market your property?

It takes more than a yard sign and a Craig’s list ad to give property the best chance of selling.  There are powerful promotional tools only available to agents; the Multiple Listing Service (MLS), agent tours of newly listed properties, the most widely used real estate search tool on the planet (Realtor.com), and magic selling powder.  Okay, I made the last one up. 

Are you prepared for the legal issues?

Selling real estate has become increasingly complicated.  The days of a simple one page contract are long gone.  Selling the house yourself to save some commission dollars may be a short-lived victory if you get sued after close of escrow.  Do you fully understand what disclosures you must provide?  What about your responsibilities to obtain work permits on improvements you have made to the property?  Are you inadvertently discriminating through your advertisements?  How do you protect yourself if the Buyer backs out of a contract?

Do you know how to close the sale?

Are you prepared to open an escrow account, get a preliminary title report, order property inspections, handle contingencies, and order payoff demands for your mortgage?  A licensed agent takes care of all of these details for you.

Thanks for reading.  Do you agree?  Disagree?  Think I’m an idiot?  Whatever you think, please share your comments and experiences.

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