“I know it’s a good idea to use a broker to sell a home, but I need to get every penny out of it and I’m thinking of trying to sell on my own. Can you give me any tips?”
Answer:
I understand where you’re coming from. Most of my clients need every penny then can get from their sale.
Just realize that even if you’re successful selling For-Sale-By-Owner (“FSBO”), it does NOT mean you’ll net more money. You MIGHT, but you might not. Consider these 7 facts:
—Fact #1—
A NAR national study showed FSBOs on average sell for up to 14% less. As this includes intra-family sales, that # is a little high. From my observation, FSBOs sell an average of 4% lower. This is due to weaker negotiating skills among other things.
—Fact #2—
Many FSBOs pay 3% to a broker who brings them a buyer.
—Fact #3—
The average FSBO, if successful, takes much longer to sell a home.
—Fact #4—
Many FSBOs say “If I find a buyer, the escrow company can handle everything.” In truth, escrow handles a small part of the sale. Home sales have so many moving parts including: negotiating …long, complex contracts full of fine print …inspections …dozens of disclosures …repairs …loans …appraisals …termites …insurance …building codes …permits …title …escrow …and much more. Many FSBOs pay unneeded costs or junk fees, pay too much for repairs, and pay extra loan payments or other losses from closing delays and cancellations.
—Fact #5—
Most FSBOs unknowingly violate a wide range of laws and leave themselves wide open to a lawsuit from the buyer.
—Fact #6—
Security concerns: with no agents involved, an owner can’t tell the difference between an interested prospect and a would-be criminal planning a burglary or worse.
—Fact #7—
FSBO home sales have a much higher cancellation rate than a traditional sale. Negative impacts of failed sales include longer holding costs, heightened stress, and spoiled plans.
(You just have to combine #1 & #2 and the hoped-for savings already start to disappear.)
DISCLAIMER: As you may guess, I’m not completely objective since I make my living selling real estate. But you’ll probably agree that everything I said above makes sense.
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