We have all known or have tested the waters as a For Sale By Owner (FSBO). A FSBO is generally looking to maximize profits when selling their home. By removing a Realtor from the equation, a FSBO stands to save, on average, 6% of the sold price for their home. Another commonly perceived benefit of selling a home without a Realtor would industry knowledge – based on the availability of the Internet information. As a Do-It-Yourselfer, taking on a challenge and saving money and doing it just as good as a professional has been the centerpiece behind these decisions. But what if I told you, the facts and research fail to support those choices or ideas.
Saving money is nearly everyone’s true goal in many transactions. Money and time has been invested into a home, sacrificing any money and time would be hard for most people to understand. With today’s access to information – through web-based home search engines – many FSBO generally feel confident understanding home much their home is worth and mistakenly believe the “worth” equates to a close figure of an appraisal. Oftentimes those quick estimates do not account for Short-Sale Homes, Foreclosed Homes, Estate Sales, or Family-to-Family sales. These sales often are lower than a home in good condition, new renovations, ideal location, etc. By factoring the distressed or lower value sales, a FSBO could be leaving several thousand dollars on the table.
The national average median sales price for a FSBO in 2016, as stated by Inman, FSBOs accounted for 8% of the national home sales. The typical FSBO home sold for $190,000 compared to $249,000 with an agent assisted sale. If the FSBO knew the buyer – close friend, family member, or colleague then the FSBO median sales dropped to $151,900. Many times, a homeowner selling by themselves will not understand the housing market, market reports or simply do not have the time to adequately market their home. A typically case of “You Don’t Know, What You Don’t Know.”
With Real Estate sales, each state in the union may have various levels of paperwork to process a sale. Many FSBOs rely on a real estate attorney or a title company to oversee this part of the process. And some FSBOs do not chose the resource of a real estate attorney. The title company’s responsibility is primarily to insure all documents have been received and the lender’s paperwork is properly processed. In either situation, a real estate attorney nor a title company has Errors & Omissions (E&O) insurance. With the abundance a documentation, disclosures, and requirements, simple issues are commonly overlooked. And a very simple issue perceived by a FSBO could be seen as fraud from a buyers’ viewpoint. These innocuous issues could develop into a lengthy and costly legal matter. A Realtor has E&O Insurance and possess a greater understanding of Real Estate requirements and expectations. Avoiding a potential litigious expense is a greater savings than not hiring a Realtor.
At the end of the day, a FSBO transaction is a higher risk and potentially a very stressful scenario – both during the closing period and (if issues arise later) losing money due to potential lawsuits and incredible amount of stress and strain on you and/or your family. The risks are high, and the rewards would be very low.
To learn more about my team or would like additional information, please review my website www.lakeliferealestate.com.