For Sale by Owner: Top 5 Pro’s and Con’s

by Conor J. Green

The percentage of FSBO’s (for sale by owner) has continuously declined since 1985 from 21% to 8% in 2017. However, it is still an alluring option for many first-time home sellers who are looking to save money on the commission. I break down the top factors on both sides of the argument so that you can have a better understanding of both options and make the best decision for your individual situation!

FSBO Pro’s

1. Saving on the Listing Agent’s Commission

Most sellers consider FSBO because the real estate agent’s commission seems too high to justify. If you are selling your home at $400,000 the standard 5-6% commission would be $20,000-$24,000. It is worth noting that your listing agent does not make that entire commission. It is split between them and the buyer’s agent first, then they must pay their broker, and cover all of the marketing and travel costs incurred during the sale.

2. Full Hands-On Control

You have full control over the scheduling of open houses, where you market the property, what the message is to those who see it, pricing, and more. Especially for home buyers and sellers who have had negative experiences with agents in the past, myself included and why I decided to get my license, it is difficult to trust an agent to put the time and care into selling your home that you would.

3. Personal Knowledge of Your Home

Whether you have been in your home for 1 year or 20, there is probably no one else that knows it better than you! You are knowledgeable about the home and the surrounding neighborhood including nearby restaurants, schools, and facilities.

FSBO Con’s

1. Experience in Contracts, Negotiating, & Liability

If you are considering undertaking a FSBO, you will need to do significant research into contracts and liability when selling your home. For example, failure to disclose known plumbing issues or a leaky roof could put you in serious liability issues after the sale when the buyers eventually find out about it.

2. Properly Pricing Your Home

Without the tools to properly price your home, you run the risk of pricing it too high or too low. If you price it too high you will undercut the attractiveness of your home and the likelihood that you will receive one or multiple offers. A lack of offers means a lack of competition and higher days on market for a home can progressively spook potential buyers (some assume there must be something wrong with it).

3. Limited Exposure & Appeal

Traditional FSBO advertising methods simply are not enough. By using a REALTOR who is experienced in digital marketing, you can get your home listed in the MLS where all buyer’s agents are searching, as well as on Facebook via targeted ads at prospective buyers.

4. Higher Days on Market

Infamously the founder of ForSaleByOwner.com had to resort to using a real estate agent after trying to list and advertise his home himself. Higher days on market can make your home undeservingly less attractive as new potential buyers assume there must be something wrong with the home.

5. You and Your Family’s Safety

It would be negligent to not mention the safety aspect of going the FSBO route. Real estate agents are all fingerprinted and can effectively screen and show the home to prospective buyers for you to ease this safety hazard.

Conclusion

As with most decisions, whether or not to hire a real estate agent to sell your home is a balance of what you value most. Is potentially saving money on a commission worth it for you to invest a considerable amount of time and energy into educating yourself and marketing your home? Is it worth the stress, potential safety issues, and the possibility that your home will not be properly advertised and receive an offer? These are just a couple of the overarching questions you have to reflect on yourself and discuss with your family. If you have any questions or comments, leave them below and I will do my best to read and answer each of them! Feel free to reach out via email as well at Invest@conorjgreen.com. Best of luck with your decision!

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Conor J. Green

Founder & Team Leader | License ID: 260045563

+1(973) 494-1712