A For Sale by Owner transaction is called a FSBO (pronounced Fisbo).
With the services available on-line, Sellers may think that they can save money by selling the home themselves. While doing the work yourself can save you 6% in real estate commissions, flying solo may not be the way to do and could end up costing you more than a commission in the long run.
There are several factors to consider when deciding if you want to try to sell your home yourself:
1) Do I want a professional to represent me?
A full time Realtor® has knowledge of the current market, knowledge of current Virginia real estate law and has many other skills that you do not have yourself.
If you sell the house yourself, are you aware of the state disclosure forms that are required by law? Do you want to risk a lawsuit by not using the proper forms and not disclosing material facts about your house? If you go to court, you do not have to hire a lawyer, if you get sick, you do not have to go to the doctor but you do rely on professionals for many things in your life.
To sell a house, you must first learn the legal rules that govern real estate transfers in your state, such as who must sign which papers first, what must be disclosed, what contract and disclosure forms are required and what to do if title issues are found.
Experienced Realtors® know how to best market your home and what features to highlight. From the working in MLS, to the wording in an ad, to a professional brochure, a Realtor® will add value and position your home in its best light. Also and experienced Realtor® showing your home will be able to point out features that today’s Buyers are looking for and also help to minimize any negatives of your home.
An experienced Realtor® understands contracts, disclosures, and addendums and also knows the steps that need to happen to get a deal closed. Your Realtor® will help you evaluate a Buyer’s offer without compromising your position. A good Realtor® will stay on top of the transaction between contract and closing to make sure all of the contingencies are removed and to get to the closing on time.
Realtors® also have seen issues that come up on inspections and know many qualified contractors that can evaluate and fix inspection issues. For example, do you know what to do if Radon is found in your home? Or how to fix a structural issue?
If you sell your home yourself, you are probably going to have to spend money and hire an attorney and pay him an hourly rate to fill out the contract and all of the required state forms. An attorney will not only be required for the initial contract but to advise you on inspections, inspection issues, addendums etc. And we all know that an attorney billing you an hourly rate can bill you a significant amount of money. With a Realtor®, you have one fee for the entire transaction not matter how much of the Realtor®’s time it takes.
2) Do I have the time?
Selling a house is a long a time-consuming process and much more complex than most people realize. Do you have the time to be at home for all showings? Do you have the time to meet inspectors, repairmen, appraisers, etc? Do you have any planned vacations?
3) Showing the Home
Buyers are often put off when the Seller is in the house. They trust their Realtor® and want to be able to talk to their Realtor® openly about what they like and don’t like about your home. An experienced Realtor® can give them advice on how to change what they don’t like about the home. A Seller will often talk about how great something is that the Buyer does not like, making the Buyer uncomfortable in the house. A Buyer is not going to be likely to buy a house when he is uncomfortable being in it.
4) Negotiating is a Tricky Business
Real estate agents have negotiating skills and are able to negotiate on your behalf without emotion. An agent can help by speaking for you in a tough transaction and help things from getting too personal. This can put you in a better position to get the best price on your sale.
An experienced real estate agent is familiar with the contract and what is allowed under state and Federal law and can use working that can be advantageous for you. An experienced Realtor® can make sure that the language in the contract is advantageous to your situation.
5) Are You Really Saving A Commission?
Most serious Buyers already have a real estate agent and a written agreement to pay their Realtor® a 3% commission. So even if you won’t pay this commission, the Buyer will have to factor this into his offer and will offer you a lower price than you could get on the open market.
If the Buyer has a real estate agent, the agent will have to work twice as hard to get the deal closed. And even if you are paying the Buyers agent a 3% commission, the agent and the Buyer will consider that you are not paying the 3% listing agent commission in the price that they offer you.
6) Is Your Home Really Ready to Sell?
An experienced real estate agent can help you position your Home to sell. For example, I will help you stage your home and find a contractor to perform the necessary repairs as explained on other parts of my web site. Experienced real estate agents know what sells today and will advise you on how to make your home more marketable.
7) Advertising Your Home
An experienced real estate agent knows where, when and how often to advertise your house. Many real estate companies get discounts in newspapers and other publications so you may pay more for the same ads. High end listings in Greater Richmond are advertised in Estates and Homes Magazine and FSBOs are not included in that publication.
On-line advertising is critical in this market. The first showing of your home is not in your home, it is on the Internet. It is essential to have a strong web presence and to have good photography on the Internet. All of my listings are put on at least 60 web sites. Do you really have time to figure all of that out? I also do a Visual Tour of all of my listings which attracts more Buyers for a higher price. Do you have the ability to do a Visual or Video Tour?
I also pay for positioning of their listings in various real estate web sites.
Serious Buyers and other Realtors look at what is listed in the Multiple Listing Service (MLS) systems and do not look at FSBO web sites. Do you want to avoid having your home in MLS?
8) Marketing to Other Realtors®
An experienced Realtor® will not only market your house to the public but will market it to other Realtors®. Most real estate transactions occur with a Realtor representing the Buyer and the Realtor often selects the houses for the Buyer to look at. A Realtor would much rather deal with another Realtor® that a FSBO so your house will miss many showings as A FSBO.
When a property is marketed with an agents help, you do not need to let strangers into your home. Agents will pre-screen their prospects and accompany them into your property.