What Do You Save With FSBO?

FSBO (for sale by owner) or any do-it-yourself project saves you money since you are not paying for a profession, right?  That’s the idea, but is rarely the case.   The internet is full of failed projects done by enthusiastic do-it-yourselfers.  If you have experience or knowledge it’s one thing, but what will you really save by selling your home without an agent?

According to the most recent Profile of Home Buyers and Sellers from the National Association of Realtors, the share of home sellers or FSBO who sold their home without the assistance of a real estate agent was only nine percent. Most FSBOs don’t do anything to market their homes, whereas most real estate professionals advertise listings on multiple listing services and through other means. This could be a real disadvantage since 92 percent of buyers use the Internet to shop for a home and half use mobile applications on their phones to look at listings.

So where do FSBOs get buyers? Forty-four percent knew the buyer prior to home purchase, and about 15 percent were approached directly by buyers.  This results in a lower median selling price for FSBOs than listed homes, $208,700 compared to $235,000.  That means the typical home listed with a real estate agent sells for 13 percent more than a FSBO.

Significantly, more buyers are using sales professionals to help them find and buy their homes. In 2001, 69 percent of buyers used the services of a real estate professional. Today that number had risen to nine out of 10.  So if you’re planning to sell your home yourself, you may be dealing with a professional agent instead of the buyer across the table.  This pits your skills against an expert negotiator, so you will probably lose even more money than the 13% more a listing agent could have gotten  you.

Today’s buyers are older, more savvy, and have better credit than in the past. The typical first-time buyer is 31 years of age, while repeat buyers are 53.  They expect to occupy their homes for approximately 12 years, so they plan to buy very carefully. In fact, more than half of buyers said finding the right home was the most difficult part of buying a home.  The fact that you’re an experienced homeowner may not be as big an advantage as it once would have been.

The number one reason why SIY sellers don’t want to list their homes is real estate fees which can typically range from five to seven percent of the transaction. But, by not testing their homes in the open market they’re losing more money than the fees.  This doesn’t include the time and effort that you have to put in that your agent would normally do, such as showing the home and keep the transaction moving.  It’s also important to realize that buyers are more uncomfortable with a showing if the owner is around because they feel they can’t talk freely, making doing your own showings less likely to get an offer.

Some people have a lot of experience and are very comfortable selling their home on their own, however the risk of losing money should give everyone pause.  Your home is a big investment, so any risk of losing money is worth a second or even third thought.  For more information and advise, call Helen today at 847.967.0022 or email [email protected].