Sell your own home or use a Realtor?

Sell your own home or use a Realtor?  This is a question that many sellers struggle with because they think that they will make more money when they don't have to pay any commissions.  Unfortunately for those who choose the FSBO (for sale by owner) route, they often end up making less money and suffering much more aggravation.

Julie Martin wrote a post asking for FSBO stories to share.  This is one I shared with her there, but this is a great issue to explore and I wanted to expand my thoughts into a full post of my own.

First, the story I referred to:

There was a FSBO in a Fair Oaks California neighborhood I had done some farming in.  After seeing that sign for a couple of months I tried 7 or 8 times to go by and talk to them but never caught them at home, day or evening, weekday or weekend (maybe that had something to do with why it wasn't selling).  They did post on the internet, but their home was not what I would call showing ready inside - not bad, just crowded looking.  The sign out front limited the hours the house could be shown. 

And the ads gave no phone number.  I sent them a letter offering to drop off some articles with handy tips for sellers, but they didn't respond.  I left some material about marketing property on their porch, but never heard from them.

After about 3 months with their FSBO sign out, a Realtor sign appeared on the lawn.  I don't know how he managed to get through to them, but good for him!  I looked it up in MLS and he had listed it at $50,000 more than the FSBO had been listed for, and it was put on caravan for the Realtors in the county and held open on the weekend.  The photos in MLS showed the clutter had been removed, along with a few pieces of furniture - giving the rooms a more spacious look.

SOLD at full price in less than 2 weeks!

With the Realtor's help they got more than enough to cover commissions and had his help to work through all the required paperwork that they would have had to handle on their own.  Our transaction docs (not including loan docs) are over an inch thick, and are difficult for a lay person to wade through - or even to know what documentation is required.  In most cases, this means that an agent who represents the buyer would have to do all of the paperwork for both sides and then fight with the seller to try to get a commission.  Fat chance!

And if it is a straight seller-to-buyer transaction with no agents involved, this could turn into a nightmare transaction, with inadequate protections for either side.  The escrow officer might wind up trying to provide all of the necessary documentation, and will be nervous that she may be overstepping her area of responsibility if she gives advice or  aid to either side.

It's too bad the sellers described above didn't go with a Realtor right away - they could have saved making at least 3 house payments, made more money, and had someone working for them!

So:

Sell your own home or use a Realtor?