How much does a FSBO really save by not hiring a real estate company?
Many people want to save money when selling their homes by bypassing real estate companies. For Sale By Owners, or FSBOs, are the ultimate do-it-yourselfers, facilitating an entire transaction from start to finish.
Consider that over 90 percent of all sold homes are sold by real estate companies, and that includes FSBOs. Since the typical commission on a home sale is 6 percent, that means that a FSBO is willing to give up around 3 percent to have real estate companies bring in prospective buyers.
The FSBO, then, is only saving 3 percent on the overall sale of the house. In order for you to save that 3 percent, what do you need to do to market your home?
You will need to spend, at the very least, around $1,000 to $2,000 on marketing materials, including flyers, advertising, postage, signs, and some kind of internet listing. Moreover, you may lose hundreds to thousands of dollars by having to take off from work in order to show your house.
When it comes time to negotiate the asking price, you’ll be up against professional real estate companies who are seasoned negotiators. If the buyer also bypasses real estate companies, it’s likely that he knows what he’s doing and can be tough to negotiate with.
Then you have the potential legal ramifications of a home sale. You might have to hire a real estate attorney to check the paperwork and contracts. You might also have to retain an attorney if there is ever a
“Over 90 percent of all sold homes are sold by real estate companies, and that includes FSBOs.”
A FSBO who bypasses real estate companies will need to have serviceable knowledge about all aspects of real estate, finance, taxes, marketing, and selling. The FSBO will need to know about mortgage financing, marketing strategies, negotiation tactics, sales psychology, direct mail, taxation, and contracts to name a few.
When you’re looking to sell your house, you have to ask yourself if the potential savings of 3 percent is worth the hassle, inconvenience, and liabilities of selling the house yourself.
When you hire a real estate agent, you are hiring a professional who has been trained to handle everything you’ve haven’t been trained to handle. The agent will show your house at any reasonable hour of the day, whether you’re home or not.
- The agent will be able to answer questions that you might not be able to answer, especially those involving the transaction process.
- The agent will be able to detect clauses in contracts that might end up costing you money.
- Most of all, the agent will do all of the advertising and marketing.
- They have access to the Multiple Listing Service to reach out to more buyers.
In the end, selling a property on your own might actually net you less money than hiring a real estate professional.
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