Is has been a long time since I met someone that sold their home without an agent, but this week I received calls from three different sellers that were trying to sell their homes themselves. We call these sellers “FSBO’s”, For Sale By Owner.
They had all heard the inventory is low, prices are on the rise, and it’s a “Seller’s Market”. They believed they would save around 6% of the sale price by not paying commissions, if they sold it themselves. After a short time, all three of them gave up and wanted a professional to sell their home. One seller was a young attorney, and felt she could easily sell her home without an agent, as she understood contracts. I have represented many attorneys over the years, and most attorneys readily admit that they are not experts in real estate, which she quickly realized.
Here are the reasons these three sellers gave up and hired an agent; most buyers have an agent so the sellers still pay an average of 2.7% commission to the buyer’s agent. The sellers are then unrepresented and don’t understand the forms or the process, and they hire an attorney, which can cost more than hiring a listing agent. The sellers took their own photos, which didn’t look good on the internet, and without the Multiple Listing Service used by Realtors, they were limited to the real estate websites they could market on, so they didn’t get good exposure. Buyers purchasing a FSBO home expect a discount as they know the seller isn’t paying a commission, so FSBO’s typically sell for less. Showings are a challenge, as well as open houses or talking with buyers. The sellers take criticism personally, and they are not well versed in explaining the valuation of their home compared to others. Most sellers don’t understand negotiating, contingencies, inspections, title work, and many transaction either never get finalized or they don’t close for one reason or another.
Experienced listing agents spend a lot of time and money marketing their listings. They are proficient in market knowledge, marketing, negotiations, contracts, inspections, contingencies, and closings. An experienced agent is likely to net sellers more money than trying to sell as a FSBO.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.