The number one reason home owners attempt to sell their property on their own is to save money by not paying an agent’s commission. Certainly, I understand this logic and I empathize with it. But I also feel the same way about my dentist. Of course, I do not like paying a lot of money for a root canal when I could just pull the tooth out on my own. That would mean achieving the same result – no more issues with that tooth. However, since I have an aversion to pain and I like to actually chew my food, I pay the dentist a lot of money to fix my tooth. In the end, I am very glad I went to the dentist.
According to the National Association of Realtor’s 2018 Profile of Home Buyers and Sellers, the average for sale by owner (FSBO) home sold for $200K in 2017 compared to the average agent-assisted seller at $265,500. That means the average agent-assisted sale sold for 25% more than a FSBO. This is up from the 16% difference in 2015 when the average FSBO sold for $210K and the average agent-assisted sale sold for $249K. On top of that, if the FSBO seller knew the buyer personally prior to the sale, the average sales price was even lower. In attempt to save money by selling on their own, owners may actually lose much more than the amount they would have paid in an agent’s commission.
Selling a home is not for the faint of heart – whether you go it alone or if you are one of the 91% of sellers who hire an agent (NAR 2018 Profile of Home Buyers and Sellers). Selling your home has never been so complicated and, unfortunately, it will never get easier. There are three main reasons hiring an agent will leave you with more money in your pocket at the closing table.
1. ACCESS TO MORE BUYERS.
87% of buyers work with an agent. Agents will seek out the best homes in the market for their buyer and those include FSBOs. However, FSBO homes are not typically the first properties agents
place in front of their buyers. Agents are focused first on homes in which more information is readily available to them and that means buyers are first being shown agent-listed homes on the MLS. In any market, especially a buyer’s market such as ours, many buyers are finding their new home prior to considering the FSBO market.
2. AVOID DISCOUNTING.
Buyers who are specifically in the market to purchase a FSBO are looking for a “deal.” These buyers want a discount and they know you are “not paying commission” so they want to leverage your savings to get a better price for themselves. Statistically, a FSBO will be on the market longer than a listed property and when the deal-seeker shows up, the seller is willing (but not necessarily happy) to negotiate a lower price. A longer time on the market, access to less buyers, and direct marketing to deal-seekers all bring down a FSBO’s sales price.
3. AVOID GETTING STUCK.
A FSBO seller is more likely to get stuck in a bad deal. It is a myth that the hardest part of a real estate transaction is finding the buyer. Wrong. The most difficult part is getting the buyer to the closing table. Negotiating the initial contract and then negotiating your way through the process of fulfilling that contract is difficult. Now add not understanding all your responsibilities, rights, liabilities and obligations. A third party who is not emotionally tied to your home is going to help you make the most informed decisions and maintain perspective. Bad deals cost money – either in extensive repairs, negotiations, and/or litigation costs.
In short, hiring a professional REALTOR® will actually save you money and ensure your interests are fully represented. Century 21 Morrison Realty agents are committed to representing our clients before, during and after the sale. We believe service does not end when the sale closes because we are focused on our relationship with you. Call your favorite Century 21 Morrison Realty agent to list your home today!
| March 13th, 2019
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