For Sale by Owner (FSBO): What could possibly go wrong? (hint: plenty)
It’s a hot real estate market. For Sale signs seem to pop up on lawns in the morning and come down by late afternoon. Everyone knows someone whose house sold over a weekend or in a day. For some consumers, choosing to list their property on their own may seem like a good idea. Just take a few pictures, throw up a listing, and stick a sign in the yard. The buyers will come rushing in, right?
As most homeowners quickly learn, there’s much more to a real estate transaction than putting a house on the open market. From pricing and marketing to showings and negotiations, there are a lot of moving parts that need to synch precisely, especially in a hot market, or the sale will collapse.
That reflects the experience of Lisa Smith, a Minneapolis-area marketing professional who considered selling her own home in early 2020. Although she took pride in her ability to manage big, complex projects, Smith was quickly overwhelmed by the sheer volume of details and paperwork behind a property sale.
“We had to balance how much money we would save without a Realtor’s® commission versus how much we are really able to do ourselves,” Smith said. “We realized it was not a realistic expectation.”
Epiphanies like Smith’s help explain why 89% of all home sales in the United States are done with a Realtor®. Not to mention in NAR’s 2020 Profile of Home Buyers and Sellers it was noted that FSBO homes sold at a median of $217,900 last year, lower than the median of Realtor assisted home at $242,300*. So before taking on the sale of your own home, here are a few things to think about.
*Source: National Association of Realtors (NAR)
1.Pricing to Sell
It seems obvious. You look at what other homes in your area have sold for; assess how yours compares; and slap on a price tag. Unfortunately, many homeowners overestimate the market value of their property. Worse, they often turn down offers that reflect their home’s actual market value. By contrast, Realtors® have access to up-to-the-minute sales data and deep knowledge about the market climate of every neighborhood they serve. They are in the business of pricing homes to sell for a value that reflects your market and gets the best possible return for you.
2.Presentation is Everything
It’s likely that a prospective buyer’s first steps into a home are virtual. So, not only do the photos and videos need to be well composed and lit, all the homey details need to look inviting and appealing. Many DIY home sellers don’t have the technical skills to achieve this, and post images that are incorrectly exposed, framed in eccentric ways, and show poorly staged living environments. Because marketing is central to the real estate profession, many brokerages use professional photographers and expert stagers who position every home in the best possible light.