As the housing market continues to change there are some people who are having a hard time selling their home. For the sellers that have had their home listed for quite awhile, you may start to think twice about the real estate agent that lists your home and also on the 6 % commission that you have to pay to at closing. This commission can be the difference in breaking even or taking a big loss. For example, if your sales price is $215,000 a 6% commission will be $13,000 in the realtors pocket! When you are selling your home for what you owe on your mortgage, you will have to pay out of pocket just to pay the commission.
So for those sellers who choose to “do it yourself”, here are some advantages and disadvantage of FSBO.
What are the advantages of selling my home by myself?
If you are willing to take on the task of selling your home by yourself, there are several advantages.
Advantage 1: There is no commission to be paid to a realtor; You get all the proceeds from the sale, minus any marketing costs you incur.
Advantage 2: You have control of the transaction throughout the process. You do not have to rely on anyone else.
Advantage 3: This advantage involves your equity. If it is low, you have the possibility of selling your home without having to write a check.
Advantage 4: You do not have to rely on a realtor to schedule showings, answer questions, etc. You can schedule as you see fit.
What are the Disadvantages of Selling My Own Home?
There are several disadvantages you should be aware of before you attempt the “FSBO” (For Sale By Owner) process:
Disadvantage 1: You will need to put a tremendous amount of time into the sale. It takes hours upon hours to do all the paperwork, the marketing and advertising, the showings, etc., not to mention all the time it takes to get acquainted with all the legal, financial, and other issues.
Disadvantage 2: Marketing and advertising your home can be very expensive if you do not know what you are doing!
Disadvantage 3: You will not have access to the Multiple Listing Service (MLS) unless you pay the required fee to have your listing included. If you do not pay that fee, then you will end up hunting for buyers one at a time, and that can be a very ineffective, and frustrating process.
Disadvantage 4: If you are not knowledgeable about the housing market, you may not price your house correctly. For example, if you under-price your home, you lose money. On the other hand, if you over-price it, you lose buyers. Also, if you are not experienced at negotiations, you can be taken advantage of.
Disadvantage 5: Some buyers believe that since you are selling the house by yourself and not paying a commission, then they should be the ones who should get the savings, not you!
Our Advice: Do your homework before considering selling your home by yourself! And, if you do decide to go the For Sale Buy Owner route, be fully prepared in all aspects of home sales!