Working with a real estate agent is a popular choice when buying or selling a house. However, others opt to take the for sale by owner (FSBO) route. You might think you can save a lot without professionals’ help, but you might end up losing more if you fail to weigh the pros and cons.
To help you decide whether or not to go the DIY route, we’ve presented below the different pros and cons of selling your house without a realtor.
For Sale By Owner Pros
Selling your house without a realtor comes with some advantages. These include paying lower commission fees, gaining complete control over the sale, having more knowledge about the house, avoiding agent and seller conflicts, and more.
Higher Control on the Sale
When you’re taking the FSBO path, you have total control over the sale of your house. You’re free to decide who among the potential home buyers can check out your property and who you want to sell it to.
You also get to decide on the listing price. If you change your mind and want a different price, you can do so without waiting for other people’s views.
You can also finish the improvements at your own pace or apply decorations at the last minute. So, if you’re the kind of homeowner who wants to take complete control over your property, then FOSBO may suit you well.
Savings on Commission Fees
One of the top reasons homeowners choose FSBO is saving on commissions. Usually, you have to pay around 6% for commission fees as the listing agent and buyer’s agent receive 3% each.
With for sale by owner, you won’t have to pay any listing agent, helping you save thousands of dollars.
First-Hand Knowledge of the House
One of the benefits of buying for sale by owner houses is your complete knowledge of the home. This includes knowing the neighborhood and what it feels like to become a member of the community.
Since nobody knows your home better than you do, you can add a personal touch when trying to sell it to interested buyers. It’s easy to share with them the specific improvements you’ve made down to the smallest details and answer any questions regarding the property.
Greater Focus on Selling the House
If you’re working with a real estate agent, you can’t trust that they’re available every minute of the day. They need to accommodate the needs of several buyers, sellers, and investors.
Meanwhile, if you’re the only one selling your house, you’re more focused on finding the perfect buyer. In case of emergencies, you can address the problem faster than a realtor would.
No Agent-Seller Conflicts
Another advantage of for sale by the owner is not having to think about possible conflicts with the real estate agent.
These could include differences in marketing and negotiation techniques as well as opposing views on aesthetics and design. Your personalities may also clash, affecting the selling process.
If you go the FSBO route, there may still be some conflicts or compromises to make, like with your partner or even with your personal preferences. However, these are relatively more manageable, and you can focus more on your goal of getting the house sold.
In connection to avoiding agent-seller conflicts, the FSBO path also means you’re not pressured to make compromises. For instance, you need not settle with a lower price just to sell the property.
When you’re working with a realtor, it’s still up to you whether or not to reduce the price. However, you might prefer the liberty of deciding on your own.
In case you’re leaving town, you can also just take the for sale by owner sign down and put it back on once you’re home again.
No Need To Trust Other People
Others may have the opportunity to work with agents they trust, but that’s not always the case. Negotiations may not turn out well, especially if you can’t find an agent you think is reliable.
If you pick the FSBO type of selling, you won’t have to put your trust in people you don’t really know. The decision-making process is all yours too.
For Sale By Owner Cons
The for sale by owner option may have several advantages.
However, it also comes with drawbacks, like the lack of pricing strategies, more biased views about your house, limited marketing tools and channels, and insufficient knowledge in real estate.
FSBO may allow you to openly share your admiration for your home and let the potential buyers know the enhancements you made.
However, you might also end up becoming biased (consciously or not). For instance, you might be proud of your home’s interior design, but that doesn’t mean others will love it too.
If you hear complaints about your beloved house, you might not be able to respond properly.
Meanwhile, realtors can tell you objectively the things that need improvement.
They also have the expertise to give you the right recommendations and make your house more appealing to potential buyers.
From home staging and knowing what images and videos will sell to identifying what investments are practical or not, these professionals will help sell your house faster at the most competitive price possible.
Lack of Pricing Strategies
You may be free to decide on your home price with FSBO, but you still need a good pricing strategy. Unfortunately, there’s only limited public access to market data.
As a result, you can’t clearly determine which properties are selling fast (or not selling at all). The closing value doesn’t have to be shared in public, so you may have a hard time comparing your property’s value to others.
Limited Marketing Tools and Channels
One major disadvantage of the for sale by owner choice is the lack of marketing tools and channels. For example, you won’t have access to the multiple listing service (MLS). This is something that only real estate agents can do, helping them reach more buyers.
You can create postings on different social media platforms. However, you need to have targeted and effective marketing strategies for your property to stand out while still ensuring a competitive price.
You can have all these advantages with an experienced realtor.
Insufficient Knowledge in Real Estate
Buying or selling a house involves a lot of jargon that may overwhelm you. These include specific details on the contract, legal terms, and acronyms that can get you in trouble, especially if you sign the documents while overlooking crucial information.
Meanwhile, realtors can guide you with what contracts, disclosures, and addendums to apply. They’re knowledgeable enough about the local real estate market, pricing, legal requirements, and proper marketing efforts.
They have expert negotiation skills too, memberships to real estate organizations, and connections with appraisers, home inspectors, and even lenders.
There may be multiple resources accessible online, but each transaction is different. That is why real estate professionals have to pass the licensing exam and even take continuing education to ensure they remain updated with the market and latest innovations.
Easy Target of Bargain Shoppers
Clients will also weigh the pros and cons of buying a house from the owner. Given that you won’t have to worry about commission fees, they’ll think you’ll settle with a significantly lower price.
Others can be too persistent, so you have to be ready with these possibilities.
If you decide to sell your house without a real estate agent, you need to allot plenty of time for the home inspection, renovation, repair, taking photos and videos, and the listing. You also have to be ready to take phone calls from prospective buyers.
Then, you should tour them around your house and do all the marketing and negotiations. This can be especially challenging if you have work and other commitments.
Despite all the time and effort, your house may get sold at a lower price than you would with the help of an agent.
That’s why you have to examine all the pros and cons of selling your house without a realtor before making a decision.
With FSBO, you have to welcome strangers in your home for a tour. However, this can pose risks to you and your family. Meanwhile, realtors have been trained to ensure clients’ safety. You won’t have to worry about the possibility of selling your house to those who are not qualified.
They can identify suspicious buyers and know how to deal with them. They can also recommend more safety measures, from listings and home tours to contracts.
While FSBO seems an attractive choice for some homeowners, you have to first consider the various for sale by owner pros and cons.
You can save on the commission fees, take control of the sale, and focus more on selling your home. However, it can also cloud your judgment, pose security issues, and require a great deal of time. You’ll miss several marketing tools and techniques too.
If you think the cons outweigh the pros, then working with seasoned real estate professionals is the best option for you.