April 28, 2021
Whether you’re relocating because of an opportunity or just need a change of scenery, selling your home in El Paso or Horizon Texas is easier said than done. Before you can find that perfect buyer and close the sale, many factors come into play, but the biggest question we get is: Should I try for sale by owner or hire an agent?
Most homeowners opt to go the ‘For Sale By Owner’ (FSBO; pronounce fizz-bo) route simply because, on the surface, it looks like a great way to save a few thousand dollars.
That’s because you’d typically have to pay around 6% of the sale price in commissions to your real estate agent when you hire an agent. But is selling a home that easy? No. Whether it’s FSBO or hiring an agent, they both have their advantages and disadvantages. Before making that leap, stick around to find out which option is right for you and save yourself a ton of time, energy, and headaches in the process. But first…
While the FSBO sounds pretty self-explanatory, there’s a lot more involved when buying/selling a property than meets the eye. It’s not just about eliminating the agent commission; it also means that you’ll have to take care of everything else, including the risk, that REALTORS® typically handles.
From research to appraisal to market price to legal compliance to paperwork, etc., there are a lot of hurdles you need to overcome while bearing all the financial and legal risks. Until you go through the process, most people don’t appreciate the variety of skills and nuances a REALTOR® provides.
PS: Before making a decision, be sure to review the laws in your state.
We’ll be going over the main benefits and drawbacks of each option in the following main categories:
The biggest attraction of FSBO is that you get to cut costs and pocket a majority of your home’s sale price by not having to pay a REALTOR®. For example, if the sale price is $250,000, you’ll get to keep the $15,000 (6% commission) instead of paying it to a real estate agent.
Not bad, right? But how much is $15,000? When you consider the time and money involved in selling a home, paying that $15,000 to a REALTOR® is a bargain. Let me explain.
By hiring an agent, you don’t have to pay for home staging, multi-listing services, arrange viewings, host open houses, marketing, and advertising, handle paperwork, take time off work/life, etc.
While Real estate sellers and buyers often sit on the opposite sides of the fence; marketing, and advertising will often bridge that gap. Aside from owning a home, the essential factor in determining whether or not you’ll be able to sell your home is finding the right buyer.
Finding qualified potential buyers is probably the hardest thing you’ll do as a for sale by owner seller.
While the current print and digital media like newspapers, magazines, online listings, online marketplaces, etc., make it easier to advertise, it will take some time, money, and plenty of experimentations to get the results that you want.
On the other hand, REALTORS® make a living out of this; they leverage their multi-listing service, years of experience, networks and collaborate with marketers to sell homes. In short, they’re able to increase your home’s visibility to attract the right buyer.
One of the most significant factors that most FSBO sellers overlook that can significantly affect your home’s final sale price is time. Generally speaking, the longer a property stays on the market, the more likely it is for it to sell for less than the initial sale price. Why?
Based on their experiences, most home buyers have grown wary of properties that have been active on the market for too long. With the average home spending up to 3 weeks on the market, unless you’re confident in quickly selling your house in that time, we recommend hiring a REALTOR®.
Why? Aside from closing the sale, you still have to find time to find a staging designer, organize viewings, negotiate with buyers and still go to work. And don’t forget, the longer you take doing all these things, the longer your house is going to be on the market.
Like every other legal or business transaction, it requires you to be a master at negotiating. As a seller, you’ll put forward your price, and the buyers will come in with an offer that is close to the sale price before negotiations can begin.
Usually, REALTORS® will handle all negotiations as long as you’re clear about your bottom line. However, as an FSBO seller, you’ll take all the negotiations. You’ll be responsible for negotiating with the appraiser, home inspector, buyer’s REALTOR®, lawyer, as well as the bank.
To avoid losing out, you’ll need a REALTOR’S® deep understanding of the market, experience, networks, and expertise to bring you a fair offer. However, as an FSBO seller, you’ll have to fend for yourself and rely on your expertise to get a great offer.
It’s important to remember that regardless of whether you’re buying or selling a property, it is a legal transaction, especially if you’re an FSBO seller. That’s because different states have different legal requirements and stipulations for the buying/selling of real estate. For instance, in some states, you won’t be able to close the sale without a real estate lawyer present.
Furthermore, unless you’re well-versed with the legalities of the process, it’s possible to overlook one or two documents in the required paperwork and may well end up getting sued after the sale.
While it’s tempting to forego REALTOR® commissions to turn a profit by becoming an FSBO seller, the risks involved far outweigh the benefits you’d receive. Without the necessary experience and expertise to navigate through the regulatory and legal hurdles of selling a home, it’s going to be a considerable risk.
Fortunately, most of these problems are easily resolved when you hire a real estate agent.
However, if you already have a potential buyer in mind, it would be OK to sell the house yourself. That said, if you need a hand selling/buying a property, then feel free to call us about your listing; we’d love to hear from you.