Price for the Home:
For Sale by Owner (FSBO) vs. Real Estate Agent
When you hear arguments about why it’s best to sell a home
FSBO (usually pronounced fizz-bo in the real estate industry), they usually
talk about the net income. “Selling your home yourself will save you money
because you don’t have to pay a Realtor,” FSBO advocates will say. One small study completed by Northwestern
University found that out of all the homes sold in Madison, Wisconsin between
1998 and 2004 FSBO sales got at least the same amount of money as homes sold by
It is true that real estate agents make a percentage of the
home sale price (usually 6% for Buyer and Seller Agents), but those fees cover
a lot of time and money that go into selling a home. In fact, a study completed
by the National Association of Realtors found that in 2008 the median price of
homes that were sold by an agent was $211,000, while those who were FSBO were
If you are choosing to sell your home without a Realtor, you
will have to pay money to stage and list the home (which can take several
hundreds, if not thousands of dollars to do), as well as host open houses for
potential buyers. A Realtor will help you stage your home for potential buyers,
take pictures, and list the home on the Multi Listing Service, a
real-estate-agents-only website where thousands of people will see the home.
You won’t have to pay the hefty fee that goes along with that listing if you
work with a Realtor. Realtors also will host open houses and property viewings
with their own time so you don’t have to break the bank.
Not only that, a FSBO seller won’t escape all of the realtor
fees. A buyer’s agent will most likely ask for a 3% commission from the home
sale for their services to the buyer.
Marketing the Home:
FSBO vs. Realtor
What is the main component that you need for a successful
home sale? Besides a home, you need qualified potential buyers! According to
another study done by the National Association of Realtors, in 2012 90% of
homebuyers looked for their new home online. FSBO sellers can purchase ads in
magazines or newspapers, or try and host the listing online, but real estate
agents have more ways to get visibility to a home, like the Multi-Listing
Time: FSBO vs.
How long do you want your home to be on the market? The
longer the home is on the market, the less it will sell for, generally
speaking. The National Association of Realtors found that homes sold through
the Multi-Listing Service sold 20 days faster on average, and 20% of FSBO
listings had to renew their listing on the MLS because they didn’t sell.
There’s a reason a real estate agent is a full-time job. It
takes time to stage, schedule property viewings and get offers on a home.
Agents work long hours, as well as weekends and holidays to make sure that the
home is sold for the right amount in the least amount of time. Many FSBO
sellers have to shorten their hours at work so they can show the home during
business hours, cutting their paycheck. Other FSBO sellers keep their home on
the market for long period of time because they can’t drop everything and run
when a potential buyer wants to look at the home. They don’t have enough time
to put into the sale of their home, so it stays on the market for even
longer. Which is a red flag for
potential buyers, whether it’s justifiable or not.
Negotiation: FSBO vs.
Real Estate Agent
A home sale is a legal transaction. Thus, the seller and
buyer have to negotiate. A real estate agent will handle all of the
negotiations, but a FSBO buyer will have to negotiate by themselves. A real
estate agent or FSBO buyer will have to negotiate with the buyer, buyer’s agent,
buyer’s attorney, the home inspector, the appraiser and the bank. A FSBO will
have to strategize by themselves, and rely on their own expertise. Dave Ramsey,
a real estate agent and personal finance personality, has said that even with
30 years of experience under his belt as a real estate agent, if he were
selling his home, he would hire a real estate agent. They are actively selling
homes and know the market in your area – they are the experts when it comes to
selling a home. If you did FSBO on all of your homes, you would probably sell
three to four homes in a lifetime, while a real estate agent sells three to
four homes in a week.
Legal Help: Selling
your Own Home vs. Real Estate Agent
Again, selling a home is a legal transaction. Remember that
if you choose to sell your home yourself. Some states may not let you go
through the home closing without having a real estate attorney present. Not
only that, but unless you’re well versed in legal documents, you could end up
overlooking a required form or disclosure and end up with a lawsuit after
closing. A real estate agent knows the legal ins and outs of home selling and
can help you make sure you don’t end up with a lawsuit on your hands.
Regardless of if you decide to sell a home yourself, or if
you’re going to be selling your home through a real estate agent, protect your
systems and appliances with the best home warranty company. A home warranty is
like home repair insurance or an appliance warranty – it covers failed systems
and appliances for a $60 service call fee. For more information on home
warranty coverage, the cost of a home warranty or where the best home warranty
companies are located, go to www.landmarkhw.com.