Considering selling your home by yourself (FSBO) in order to save some money by not having to pay a real estate professional a commission? I get it. Heck if you can save some cash, and get your home sold, good for you. However, statistics tell a different story. Homes sold by home owners actually sell for less than agent assisted sales and there are a LOT of risks that come with selling by yourself. 

Here is a short list of just 9 of the top reasons not to sell by yourself (FSBO).

1. Paying someone to negotiate against you

Most if not all FSBO's are willing to pay an agent a commission to bring a buyer to them. This makes sense and one any FSBO should do. Paying an agent a 3% commission is standard but does vary.  As a FSBO, the only person looking out for your best interests is you and you are not a pro at this. 

However you need to make sure you know this: 

If you pay an agent to bring you a buyer and you are paying them a commission, you are paying a professional to negotiate AGAINST you! Yes, that is right. You are paying them a commission to get the absolute best deal they can for their client.  They also know all about contract, terms, inspections, appraisals, etc.. How many times have you sold a house in your lifetime? Two, three, maybe four? A good agent like my Team sells hundreds a year. We know what we are doing and a FSBO simply does not nor should they be expected to know. 

2. FSBOs sell for less

In 2015, FSBOs lost about 16 percent of the sales price with a median selling price of $210,000 (agent-assisted homes sold for $249,000).

Selling a home by yourself is time consuming. You probably don't have the time to devote to the process, don’t know the market value, don’t understand market reports and don’t properly market the property.

If the FSBO seller sold to someone he or she knew, the median dropped to $151,900 (because cousin Sue is doing them a favor and expects a deal).

If the 2015 FSBOs sold to someone they knew, the median dropped from $210,000 to $151,900.

3. FSBOs spend more time on the market

Unless the seller knows someone who wants to buy the home, FSBOs take longer to sell than homes listed with an agent. For the same reasons, they can’t get the right selling price. Overpricing a home is the worst things you can do and relying on websites like Zillow and others is not a way to base pricing. 

On average, 18 percent of FSBOs were unable to sell within their chosen time frame last year. If you are on the market an extra 30 days, that is one more mortgage payment, electric bill, gas, water, taxes, etc that you are going to have to pay. 

Time is money. 

On average, 18 percent of FSBOs were unable to sell within their chosen timeframe last year.

4. Scams can and do happen

Yes, in today's world, there are some really bad people out there looking to take advantage of you.  I have heard and seen countless stories of buyers and sellers losing hundred if not thousands of dollars to crooks who will take your money and not bat an eye at it. 

Common scams include fraudulent papers (appraisals, loan documentation), foreign buyer deposits (scammer sends too much in a bad check and then requests a refund), purchases through a third-party (a fake attorney, etc.) and asking for personal information.

5. Liability is on the seller

Heck, we know we are all not perfect and mistakes happen, but when it involves real estate, there is really no "small" mistake.  A seller (or buyer) who doesn’t have the representation of a licensed agent pays for those mistakes. While most attorneys can close a real estate transaction, they don’t carry errors and omissions (E&O) insurance.

Let's just say you fill your downloaded off the internet Seller Disclosure and forget to disclose that your basement has leaked in the past. A month after closing there is a torrential downpour and the basement springs a leak and the Buyer calls you in a panic asking about any previous issues. You remember the past issue and let them know you forgot to put it on the disclosure. What happens then? 

6. Real estate contracts are just that, a contract, and they can be confusing!

The 2015 National Association of Realtors’ Profile of Home Buyers and Sellers showed that understanding paperwork was one of the most difficult tasks for FSBOs. Depending on your state, there are a variety of contract forms that are needed, including but not limited to a sales contract, loan exhibits, property disclosures, and lead based paint exhibits.

Here is one example: If a home is built prior to 1978, do you need a Lead Based Paint exhibit? If so, who needs to complete and sign the exhibit first? 

While, contracts can be downloaded easily online in today's tech age, do you know which ones you need to use and WHY?

Understanding paperwork was one of the most difficult tasks for FSBOs.

7. FSBO homes sell for less

In 2015, FSBOs lost about 16 percent of the sales price with a median selling price of $210,000 (agent-assisted homes sold for $249,000).

Homeowners selling by themselves simply don’t have the time to devote to the process, don’t know the market value, don’t understand market reports and don’t properly market the property.

If the FSBO seller sold to someone he or she knew, the median dropped to $151,900 (because cousin Sue is doing them a favor and expects a deal).

If the 2015 FSBOs sold to someone they knew, the median dropped from $210,000 to $151,900.

8. FSBO homes spend more time on the market

FSBOs take longer to sell than homes listed with an agent unless the seller knows someone who wants to buy the home.  

Who's handling all your marketing, showings, feedback, website ads, social media posts, etc..running the marketing show. On average, 18 percent of FSBOs were unable to sell within their chosen time frame last year. From a safety standpoint, I know I would never let my wife show my home by herself without me being there with her. If you are not concerned with safety you better be. Working with an agent provides safety measures like secure lockboxes, checks and balances of agents entering the home.

9. Dealing with the home inspection

Do you know what you are REQUIRED to repair once a home inspection takes place and a Buyer asks for repairs? Yes, depending on the contract you sign, there may be required repairs that you must do for the buyers loan. 

Sellers who don’t know the rules can get stuck with unnecessary and costly repairs. Most repairs are negotiable however some need to be done.  Inspections repair requests can be daunting and confusing to navigate. Do you have a list of local vendors to rely on for quotes, repairs, timing to get things done, receipts needed, etc..

If you have any questions about selling your home, please give us a call and let's talk about your options and how we may be able to make getting your home sold a reality. 678-775-2787.