Most homes are sold with the assistance of a real estate agent. Some sellers choose to go through the process alone, which is completely possible, but comes with greater challenges.
Sellers going at it alone choose so to save money on an agent's commission. However, many times a FSBO sale could result in a lower closing price. A survey from the 2005 National Association of Realtors® Profile of Home Buyers and Sellers has shown that the median price for FSBO listings was 16 percent lower than those homes sold with the help of an agent.
Also, in 2005, out of the homes sold only 13 percent of the transactions were done without the help of a real state professional. And 39 percent of those were between a buyer and a seller who had previously known each other, and the homes were not fully put on the open market.
Below are a few of the risks that could come from selling your own home.
Wrong Price: It is necessary to have the right asking price. If overpriced the home will most likely sit on the market longer than it should and eventually require a price reduction. If under priced, you could scare off skeptical buyers or end up with a closing price much lower than market value.
Buyer Caution: There are buyers who will not deal with FSBO listings because they think the asking price may not be in the proper market range or that the property may have something wrong with its condition.
Buyer Haggling: A FSBO listing could attract buyer's who are only looking to talk a seller down from their asking price trying to find a bargain deal.
Not enough Marketing Experience: The average person, not always in the real estate market, may not have as much of a grasp on the market's conditions. Being able to know the comparitable market value is the means to proper market placement.
Lack of Exposure: Appealing to the right buyers consist of more than a newspaper ad and a sign in the yard. Professional real estate agents come equipped with costly resources that the typical homeowner does not have access to. 75 to 80 percent of buyers use the Internet to search for their homes. Excellent agents will typically have a strong Internet presence that will attract buyers to a seller's listing.
Negotiating: It is much more difficult for a Seller to negotiate without a real estate agent as a middle man and keep emotions aside.
A Commission to a Buyer's Agent: The majority of the buyers will use a real estate agent, for whom a seller will typically have to pay a commission to anyway.
Disclosure Liability: If a seller's fails to proper disclose they could assume a huge liability. A real estate professional will be current on proper disclosure practices.
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