FSBO sales (For Sale by Owner) declined again for the third straight year in 2017, while the percentage of home sellers who sold with an agent remained at a record high of 89%, according to the National Association of Realtors (NAR) 2017 Profile of Home Buyers and Sellers.
Only 8% of recent home sales last year were FSBO sales, according to the annual survey. It is the lowest market share recorded since the report began in 1981.
“FSBO sales have flattened due to current market conditions where sellers need a competitive edge that only agents can provide,” said Jessica Lautz, NAR Managing Director of Survey Research. “What we see is that sellers are working with agents to help market their home to potential buyers, sell it in a specific time frame and price the home competitively,” she said.
Many potential FSBO sellers end up regretting the decision. If you are already selling your home yourself, or considering it, here are seven excellent reasons to think again.
1. Your Expert Guide
Most people only sell one or two homes in their lifetime. Top producing Realtors handle hundreds, possibly thousands of transactions in the course of their career. They are trained professionals, skilled in pricing, closing and negotiating home sales and focused on the details of selling a home.
Selling any home generally requires, at the least, dozens of forms, reports, disclosures and other technical documents that your Realtor is expert in completing. You could educate yourself in all the details of completing them – or hire a Realtor to do it for you – freeing up your time and freeing you from the task of learning everything that a Realtor would be able to tell you. Completing all the paperwork and attending to all the details of the sale are just the start, and this is AFTER you find and qualify the right buyer and negotiate your best deal. Every detail of closing paperwork must be attended to correctly in order for the sale to close. Neglecting something critical like an inspection report, or completing it incorrectly, can result in the loss of the sale as well as serious legal problems. In fact, understanding and completing the necessary paperwork was one of the largest obstacles named by potential FSBO sellers, according to the 2017 NAR survey.
Agents also have an in-depth professional knowledge of the local area and know how to find the insider industry data about your neighborhood. They can tell you the price of all the homes that sold there recently and give specific insights into the sales; not only the list price that appeared on the sign, but also the details on upgrades, features, number of days on the market and the number of times a contract for sale may have fallen through. Realtors can also provide local information on utilities, zoning, schools and more for your buyers.
2. The Right Price
Fifteen percent of FSBO sellers said that getting the right price for their home was their biggest obstacle, according to the 2017 NAR report. “Pricing the home competitively is really important for sellers today,” said Lautz, “especially because everything is rapidly changing with prices.”
Agents do not choose prices for their clients, but rather bring them a collection of market data, helping them to weigh its impact and select the right price. After the price has been set by the owner, the agent devises a negotiation strategy based on market supply, demand and conditions. An experienced Realtor can perform a detailed market analysis of your home which considers its condition, any improvements you have made, and your local market.
3. Property Marketing Plan
Property doesn’t sell through advertising alone. Although a yard sign and a Facebook post may be the typical marketing plan for a potential FSBO seller, few of today’s home buyers find their home that way. As early as 2014 only 12% of buyers found their home via yard signs, according to the NAR.
Realtors use social media as a marketing tool. But, because this is well known, most visitors to their page are interested in buying a home in the local area. In addition, Realtors have more specialized tools that only they can access. Agents are able to list homes on the MLS (Multiple Listing Service). They also have the credentials to list your home on professional industry sites like Zillow and Realtor.com. In addition, a large portion of all yearly home sales originate from a real estate practitioner’s contacts with other Realtors and past clients. This is a network that FSBO sellers just cannot access. Realtors are actively engaged in driving traffic to their firm websites and create a planned internet strategy to promote the sale of each home they list.
4. A Negotiator
Top producing agents are trained negotiators – professionals trained to present their client’s home in its best light who agree ethically to keep client information confidential from competing interests. There are many factors to negotiate in a real estate transaction. In selling your home, you will have to negotiate with the buyer, the buyer’s agent, the buyer’s bank, the home inspection company, the appraiser and the title company, for a start. Your Realtor is trained in dealing in the most professional way with them all.
5. A Buffer
Your agent will screen out time wasting calls from bargain basement hunters and “lookie loos,” presenting you only with serious buyers and attempting to convince them to write an offer immediately.
Unfortunately, Craigslist and the type of free, off-market classifieds often used in FSBO sales are also perused regularly by scammers, stalkers and criminals. Realtors will keep these people away. They take the spam and the danger out of showing your home. When your property is marketed by a Realtor, you don’t have to let strangers into your home. Your Realtor will pre-screen qualified prospects and accompany them through your property.
6. A Supporter and A Cheerleader
Your home means so much more than four walls and a roof to you. For most, it is the biggest purchase they will make in their lifetime. Having your Realtor on your side as a concerned but objective third party advocate will help you to remain focused on the issues that are most important to you, providing stable support during emotional moments that may arise in the selling process and cheering you on to get you to the closing table for the right price in the shortest time with the fewest hassles.
Most FSBO sellers choose to do so in an effort to save agent fees and make more on the sale of their home, but this is usually not the outcome. Most FSBO homes sell for less.
Research shows that using an agent can net you approximately $60K more. According to the 2017 NAR Survey, FSBO homes sold for a median price of $190,000 last year, while agent-assisted homes sold for a median price of $250,000
Also, real estate professionals bear many of the costs that you would face in selling your home yourself in their daily practice. A knowledgeable, top producing agent can structure their commission into your home’s sale price so you barely notice it. So, even with a 5% commission on a $250,000 home, you would still come out $57,000 ahead.
8. Professional Ethics. Objective Opinion.
Realtors are trained, ethical professionals with objective information on your property and market area. Each Realtor must adhere to a strict code of ethics based on professionalism and protection of the public. As their client, you can expect honest and ethical treatment from them in all transaction-related issues. This is possibly the biggest advantage of working with a Realtor.
Schedule an appointment with a Real Estate professional to see what they can offer before taking on the challenges of selling your home yourself.