For Sale By Owner may seem like a great plan to save money: you throw a sign up on the front lawn, wait for a buyer and SHAZAM! you sell your property without losing money to a real estate agent. What could go wrong? Well, quite a few things, it turns out!
Let’s look at the times For Sale By Owner is a good plan and when it’s better to go with the experts.
For Sale By Owner if you have all the time in the world.
You are sitting at home thinking, “Real estate sales are going well. I wonder how much I could get for my property. Time to throw caution to the wind and test out the waters! Let’s put a sign out front!”
If you list your home For Sale By Owner, you will place a sign on your front lawn, post it to your social networks, and call your friends and family. Perhaps, if you’re feeling dedicated, you might also print flyers. And then, you wait for the phone to ring.
In the meantime, you must keep a clean house 24/7 and be available to show whenever you get a drive-by viewer. Research shows that most real estate sellers underestimate the work that goes into staging a property for sale by owner. While an agent is unlikely to stage your property, they can give you hints on clearing it out to look better to potential buyers.
You also have to repost to social media almost daily because that first post only shows up in your friends’ feed on the day. If this sounds reasonable, you should consider For Sale By Owner (FSBO).
If you are an investor looking to find out whether you should sell a rental property while it is vacant, it doesn’t hurt to try For Sale By Owner. If the property is rented, you cannot logistically use this method without irritating your tenant or undervaluing the property due to poor staging.
Use An Agent If you Hate Paperwork
“While you can hire a real estate attorney to handle some of the paperwork, including the sales contract, this will cost you extra money out of pocket. And an attorney won’t provide you with the advantages that a realtor offers, such as knowing how to price your home or offer the most enticing buyer incentives for your market.” (listwithclever.com)
Paperwork for selling a property is tricky, especially if you are selling an investment property. The risk of messing up far outweighs the cost of a real estate agent. If the paperwork isn’t right, you could be looking at years of issues, including mountains more paperwork.
Use An Agent If Your Network Is Less Than 20,000 People Within 50 Miles.
No matter how hard you try to spread the word yourself, your reach (how many people will see your post) is minimal compared to a real estate agent’s network. When you place your property on the market with a licensed real estate professional, you get an MLS number and a whole host of marketing that goes along with the agent and with the MLS. For example, when your agent lists your property with the Multiple Listing Services (MLS) the property is listed on all of the major property sites, like Zillow, which reaches 36 million visitors monthly*
You can purchase an MLS listing, but in doing so, you are committing to the work of an agent, which starts to add up in time and money. At a certain point, you are losing more money than you would to a real estate agent.
Even if you choose FSBO, you are still on the hook for commission.
When selling a property, the seller is usually responsible for the commission of the buyer’s agent. In other words, you’re paying an agent no matter how you slice it. And, yes, you can negotiate out of that cost, but you might have to give up something else within the contract to avoid those costs.
At Regalway Homes, we are not real estate agents. We are investment professionals that work in real estate every day. We know the industry extremely well and would only recommend For Sale By Owner to experienced sellers. If you would like our advice on other real estate matters, or if you’re looking for investment strategies, use the consultation form below to get in touch.
*U.S. numbers used.