BE WELL-INFORMED BEFORE DRAWING A CONCLUSION ON THE FSBO VS REALTOR QUESTION

Are you considering a DIY sale of your home, also know as a For Sale By Owner (FSBO)? Whatever your decision, a roadmap will be helpful as you navigate your way through this journey. In his recent blog post, Richard Haddad, managing editor of HomeLight.com offers some things to keep in mind. We’ll share a few of those facts and will offer some of our own suggestions.

A FSBO sale does NOT mean that there are no expenses associated with the sale of your home. You may not realize that some of these expenses are covered by a realtor. Something to consider is the amount of time involved in selling a home. Time can be one of those ‘unseen’ benefits that a realtor provides.

There are many things that are done in the background of a transaction that may go unnoticed to many sellers. While you will ‘save’ yourself the cost of the seller agent side of the commission, you will likely still pay a commission to the buyer’s agent.

Let’s look at some of the expenses you are likely to incur should you decide to sell on your own:

1)      Attorney/Legal Fees

As mentioned previously, time is a commodity that usually comes with a price tag – and an attorney’s time is no exception to that fact. Unless you are confident that you understand state and local real estate laws, listing and purchase agreement contracts, closing processes, required documents and documentation, you’ll likely want to hire an attorney to help with your sale. According to Haddad, typical attorney fees range from $150-$350 per hour.

2)      Appraisals

While realtors assist sellers in determining a home’s market value by providing a Comparative Market Analysis (CMA), for a successful FSBO, it is vital that you establish accurate pricing for your home. Investing in a professional appraisal is strongly encouraged. A home appraisal generally costs between $300-$500.

3)      Inspections

Potential derailments to a FSBO sale can be mitigated by conducting inspections. The average cost for home inspections ranges between $280-$400. Other inspections to consider are pest/termite, radon, mold, water, roof, and foundation. Oftentimes, these inspections are a point of negotiation between the seller and buyer, and a professional agent may be helpful in these instances.

4)      Advertising/Marketing

Expect to pay anywhere from a few hundred dollars to well over a thousand dollars to market your home. Professional photos and videos, MLS listing fee, print and social media ads, yard signs, hosting open houses are some of the costs that you will incur. These costs and the time needed to arrange these services are normally covered by a real estate agent. You will want to take this into consideration in making your decision to go ‘solo’ or whether you’ll enlist the services of a real estate agent.

5)      Seller Concessions and Closing Costs

FSBO sellers may need to offer seller concessions to potential buyers. These are negotiations where you, as the seller, pay certain costs on behalf of the buyer that can facilitate a quicker and smoother sale. Concessions have strict rules and regulations with which you will need to familiarize yourself. You will also have closing cost fees that include some or all of the following: settlement fees, title fees, reconveyance fees, recording fees, transfer tax or excise taxes.

6)      TIME

Haddad writes - One of the most significant yet hard-to-quantify expenses of selling your home by owner is the investment of time, particularly when it comes to fielding offers and reviewing purchase contracts. He goes on to state – the value of an experienced agent often becomes most apparent during the offer and contract phase, highlighting the potential cost of managing this process on your own. Determine how competent you are in understanding and evaluating offers, negotiations, and legalities of contracts.

Haddad’s article sites a few more points of interest:

*Few sellers choose FSBO, and most know their buyer. In 2023 FSBO sales accounted for only 7% of recent home sales with 57% of those sellers selling their home to someone they knew.

*FSBO homes sell for 23.5% less. This 23.5% disparity highlights the critical advantage of using an agent.

*Market expertise, negotiation skills, marketing reach, time savings, and legal and procedural expertise are just a few of the may benefits a seller has when partnering with a real estate agent.

Whether you decide to tackle the FSBO process or whether you choose to enlist the services of a professional real estate agent, our team would like you to remember the following:

Sandi Downing Real Estate/ Keller Williams

Everything that can go wrong WON’T go wrong. We bring you ‘peace of mind’ and THAT is PRICELESS!