For Sale By Owner Vs. Realtor... The Age Old Question

Posted by Renee Porsia under For Buyers, For Sellers, For Realty Professionals, General Information, RE/MAX, selling, buying, Renee Porsia, NAR, Philadelphia Market Statistics, Loans, Prices

Numbers do not lie:  Homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more than FSBO sales.

The median FSBO selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions. That's $59,800 dollars more in the seller's pocket using a real estate professional (according to realtor.org). And after the sale many FSBOs said they wouldn't attempt to sell on their own again. In fact 18 percent of FSBO sellers indicated that preparing the home for sale was the most difficult task when selling without the assistance of an agent, followed closely by understanding and performing paperwork (16 percent) and selling within their desired time frame (15 percent) according to realtor.com. 

Given those facts, one would ponder at why a home owner would want to go it alone? Well, you can't blame a person for trying.  There are plenty of successful FSBOs. The question is did they get what their home was worth?

A very important question I have is did they know how to negotiate the sale without being emotional? When selling anything, once you get emotional you lose! And, lets face it, negotiating the sale price is the most important part of the transaction.

In addition to everything else, a For Sale By Owner has to be concerned with safety. Now, there are some who will say that is just a Realtor's scare tactic.  Well, I can assure you that a person's over all safety is definitely not a scare tactic. A For Sale By Owner basically gets a for sale sign and then places an ad in the local newspaper and then opens their door to every stranger in the area and beyond. We are taught as children NOT to talk to strangers but then when we get older and own a home, that very important piece of advice goes right out the window.  Opening your door to someone you know nothing about is not safe for anyone not just For Sale By Owners. So, to the nay sayers, I say no amount of money is worth risking you or your family's safety.

A Realtor eats, sleeps and breaths real estate. So, naturally we know so much more about selling a home than the average home owner. Sure, some will argue that the home owner knows their home better than a Realtor and that is true but the realtor is not selling memories. Realtors are selling property.

I am a Realtor so obviously I passionately believe that my services are invaluable because I know what I do for my clients.

Given the numbers, if a Realtor can sell a home for 32 percent more than a For Sale By Owner that in itself is a huge reason to use a Realtor? After all, isn't the sole purpose of a For Sale By Owner not using a Realtor to make more money? Then by not using one, isn't that a contradiction in thinking?

A Realtor or at least this Realtor screens all buyers prior to working with them. I am very adamant about not running to a property to meet with a buyer for the first time. It's not safe or smart. I certainly am not going to preach to a For Sale By Owner to not let strangers into their home and then myself go meet a perfect stranger.  I practice what I preach!  By screening buyers prior to working with them, I am able to get their name, address, social security number their financial situation, employer, bank accounts and other pertinent facts. What all of that establishes is whether or not the buyer is in the position to purchase a home which is ultimate goal. If a buyer refuses to meet with me prior to me showing him/her homes then I will not work with them.

A Realtor negotiates the sale price without emotion. For a second think about how you feel when someone says to you "I'll give you $200k." What would your response be standing at the front door of your home that you are selling?  Would you feel uncomfortable? Would you say $200k? The price is $280k. Would you tell them to go pound sand? Would you feel angry?  Well, when a buyer agent brings an offer to me on a home that is realistically priced right that is just way off, I don't get angry, feel uncomfortable or tell the agent to go pound sand. I take the offer to my seller and consult with them.  Then I go back to the buyer agent and I am firm, confident and professional. I am focused and I fight for my client. Negotiation is the most important part of my job and its the hardest but I am good at it.

There are so many other reasons a home owner should hire a Realtor and I would love to discuss those reasons with anyone who cares to contact me or feel free to comment on this blog post.

So, to answer the age old question, For Sale By Owner vs. Realtor, the answer is easy.  Realtor!

Thanks to realtor.org for their contribution to my blog.