For Sale by Owner vs. Realtor – Pros and Cons
You have decided that it is time to sell your home. Now comes the big decision – for sale by owner vs. realtor – which is right for you?
There are pros and cons to each side – we cannot lie. Some people do find selling their homes on their own easier – especially in a booming market. If there are more buyers than sellers, you may find it quick and easy to list your home for sale by owner.
Here is something you may want to consider first:
In 2017, the average For Sale by Owner (FSBO) home sold for $200,000. That may sound great, except for the fact that the average agent-assisted home sold for $265,500. You may think you are saving money by not paying out a commission. However, the bigger question is this – how much money did you lose by not using a realtor?
In case you do not have a calculator handy, the 6% commission on that sale is $15,930. After subtracting the commission from the home’s sale price of $265,500, the seller is left with $249,570. That is a considerable difference above $200,000. Are you willing to leave that much money on the table?
Pros and Cons of For Sale by Owner
It is true that some buyers look for homes for sale by owner. They also believe they can save money when the seller does not have to pay a commission. However, two people cannot save one commission. The seller wants to pocket the extra money by selling the house at the market value of similar homes listed for sale by realtors. The buyer turns to an FSBO home hoping to get a lower price to compensate for no commission being paid. Either the Seller or the Buyer will reap the benefits in this scenario. If they agree to meet in the middle, both parties can benefit. Based on the numbers previously quoted, many for sale by owner homes go for less than they would if a realtor was selling them.
Did you know that over 90% of homes listed for sale by owner vs. realtor do not sell that way? According to the National Association of Realtors, most people wind up hiring a realtor after their home sits their unsold.
Ok, let us look at the pros of selling your home yourself – there are some worth considering:
Pro Number 1 – You get to keep all the money yourself and not pay commissions
Pro Number 2 – You control when you want to show your house to people, and you get to stay there and answer any questions. After all, no one knows your house as well as you do.
Pro Number 3 – You have only one home for sale so you can devote all your attention to the property. A realtor may have many houses for sale.
Pro Number 4 – No one will tell you how to market your home. That can be a con because you lose out on valuable information from an experienced realtor.
Now let us look at the cons of for sale by owner homes:
Con Number 1 – You will likely get less money for your house than if you have used professional realty services – reread the first section of this report.
Con Number 2 – You may have to show your house at times not convenient for your schedule to accommodate potential buyers. If you use a realtor, this will be handled for you (also, most buyers are also uncomfortable with a Seller at home to show them around).
Con Number 3 – Professional real estate brokers handle the marketing of your home for you. There will be better advertising to a larger marketplace of your home to potential buyers.
Con Number 4 – There is more involved when you sell home by owner than just showing your house and accepting a bid. Qualifying the buyers, inspections, repairs, legalities, and closings take up considerable time and expense.
Con Number 5 – Websites listing homes that are for sale by owners are not that effective. Nothing comes close to a professional real estate company.
Con Number 6 – You could be in danger from strangers that come to your home. A professional real estate salesperson follows processes to ensure the safety of your home and all people involved.
Pros and Cons of Using a Professional Realtor
You probably already realize the pros and cons of using a professional realtor by now. Deciding between for sale by owner vs. realtor is something to spend time contemplating.
Here are some top pros of using a professional realtor:
Pro Number 1 – You will likely get more money for your house.
Pro Number 2 – A realtor dedicates time and energy to selling your home that you may not have.
Pro Number 3 – The realtor can do marketing for your home that you do not have access to – including the multi-listing service.
Pro Number 4 – Your realtor will handle all negotiations for you with the buyer or buyer’s agent.
Pro Number 5 – You do not have to worry about any of the legalities – the realtor handles everything for you.
Because there are pros and cons of everything in life, here are the cons of using a realtor:
Con Number 1 – You will give up some of your profit in the form of a commission – again, see the first section.
Con Number 2 – Giving up control is never easy for some people – you must let the realtor do what they do best.
Con Number 3 – That also means sometimes having your home shown when it is not overly convenient – if the realtor knows there is a potential buyer, that may come first.
That is it – there are very few cons to using a realtor. It is essential to weigh the pros and cons of for sale by owner vs. realtor. Do know this – even if you choose to try and sell your home on your own, you can always change your mind. When you do, consider working with the GreatFloridaHomes Team at Keller Williams.
The team at Great Florida Homes is here to get you through the murky waters of a real estate transaction with over 30 years of experience and hundreds of successful transactions! For more information, contact Great Florida Homes at (954) 695-SOLD. We are here for you.
Photo Credit to Photo by Derek Thomson on Unsplash
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