Realtors vs. For Sale By Owner
Let us see if selling your home by yourself as a FSBO (For Sale by Owner) is really cheaper as compared to selling it through a Realtor.
It has been discovered through research conducted that FSBO (For Sale By Owner) takes longer to sell, in addition to the fact that about 21% of them end up being listed on Multiple Listing Service (MLS). This leads to an average of 68 days longer as compared to real estate listed with a Realtor. So, with a Realtor, the average property spends approximately 69 days on the market, while with the property being sold by the owner, (FSBO), it spends as long as 88 days on the market.
Are you really saving money?
Many home sellers in today's real estate market are inclined to at least think about selling their home on their own. With respect to pricing, records from 2012 revealed that FSBO contributed as low as 9% of the property listings on the market. It also had a significantly lower selling price on the average. The Realtor averages over 18% in sales value over FSBO. This transforms to the owner selling a property at $174,900, while the Realtor sells the same property at $215,000.
Statistics revealed that in the last decade, the total number of properties listed for sale by the owners has dropped from 20% to just 9%. This discover is also underscored by the NAR’s 2012 data, which shows that over 69% of FSBO admitted to having significant difficulties in selling off their properties.
What Factors are Involved in Selling a Home?
Understanding the details of paperwork is crucial to succeeding at selling a property. Nineteen percent (19%) of FSBOs were faced with problems of putting together the terms of the sale and having an in-depth knowledge of the legal requirements involved in the home sale process.
Over 14% of FSBO sold their homes based on emotions instead of the prevailing market price. It is a rare instance for the owner of the home to have access to reliable data with to compare prices in the area. As recent reports have shown, real estate websites like Zillow and Trulia offer unreliable estimates based solely on public records of property sales. They don't take into account the desirability of your home, upgrades and renovations, school districts, competition, days on the market, or the numerous other aspects that Realtors use when pricing a home for sale.
As any real estate professional knows, there are certain aspects of marketing and listing a property that must be put in place to make it worth its full potential. Approximately 15% of For Sale By Owners (FSBO) lack this knowledge, hence they invest valuable marketing dollars in the wrong areas.
Connections and business relationships are a key aspect in any real estate transaction. They are vital factors in order to obtain financing and connect buyers and sellers. Full-time Realtors have these connections that many home owners and FSBOs do not.
The marketing skills required to make a home sale successful can only be found with Realtors. The Internet is the best tool for a FSBO, but the Realtors has a variety of tools, which often include most sophisticated real estate websites than those of a FSBO site.
Selling a home For Sale By Owner is risky because it takes longer to sell than having a Realtor list and sell it for you. There are serious commitments that need to be made when selling a property, like paying attention to every detail. This can be a burden especially if you have not sold a property before.
Less than 3% of FSBOs were faced with smaller issues like negotiating, scheduling home inspections and other miscellaneous issues needed to seal the deal. Although not every FSBO has the same challenges with selling their homes, over 25% of FSBOs did not know the buyers report to have a smooth property sale.
Take a look at the Infographic below for more information and statistics on FSBOs versus Realtor home sales.