FSBO: Why You Might Think Twice Before Selling Your Own Home
If you’ve selling your home or you’ve sold your home, I’m sure you’ve thought at one point or another, what if I sold my home on my own without a realtor? When you sell your own home there’s a name for it: For Sale By Owner or FSBO for short. You might think selling your own home is a no brainer, a piece of cake. You can sell your home for just as much and save paying the realtor’s commission. It’s easy-peasy, right?
Although it can alluring at first glance, FSBO might not be all it’s cracked up to be. Let’s take a look at some of the pros and cons of selling your own home to help decide whether it’s right for you.
Pro: Save Money
Probably the biggest incentive for selling your own home is that you can save yourself the money you’d otherwise be paying to a realtor. The typical realtor earns between 2 percent and 2.5 percent commission on a property. Let’s say you sold your home for $800K. That’s between $16K and 20K you could be saving in real estate commission. It seems like a simple choice, right? Not so far. Let’s now look at some of the cons.
Con: You Probably Won’t Save as Much As You Think
If you were hoping to save 5 percent in commission, I hate to break it to you, but that’s highly unlikely. You’ll want to offer at least 2 percent commission to the realtor representing the buyer. Although you don’t have to, if you offer no commission at all few (more like no) realtors will want to take their clients to your property.
On top of that, your home probably won’t sell for as much if you had otherwise hired a realtor as your listing agent. Here’s why: most homebuyers will expect a discount on the selling price since you don’t have a realtor. As such, buyers aren’t usually willing to offer as much. Even if your home does sell, it’s probably for less than if a realtor helped you.
Con: It’s Time-Consuming
Selling your home isn’t as easy as it may seem. There’s a lot of work that your realtor would otherwise do behind the scenes that you may not even be aware of or think about.
First of all you’ll need to manage your own viewings and open houses. This can be tough if you already have a busy schedule and work a full-time job. While it’s true that most homebuyers will probably want to see your property in the evening and on weekends, some will want to see it during the day on weekdays. If you aren’t available to show your property then, you could be missing out on potential offers that could help drive the selling price of your home up.
Con: You Have to Negotiate on Your Own Behalf
If you were ever in court, you probably wouldn’t represent yourself. So, why would you do the same with FSBO? While you may be able to handle the viewings and open houses, something that’s really tough is pricing your home and negotiating on your own behalf.
When you hire a realtor, it’s really handy to have those fresh set of eyes to help price your home right. If you sell your own home, you may make the common mistake of loving your home so much that you believe it’s worth way more than it actually is. When you price your home too high, it can lead to your home sitting on the market for a long time.
Then there’s negotiating on your own behalf. Unless you have experience negotiating, the learning curve can be quite steep. The last you want to do is to negotiate a lower price than you otherwise could have gotten. Negotiating the selling price for your own home can be awkward and make you feel uncomfortable.
The Bottom Line
In my opinion, the services of a good realtor are invaluable. A realtor handles all the important stuff for you, including scheduling appointments, staging and negotiating. Selling your own home many times is a case of penny wish, pound foolish. You may save the commission of your own realtor, but if your home sells for less, are you really saving any money?
The good news is there’s a way to have your cake and eat it, too. With feeDuck you get the best of both worlds. You can work with a top-notch realtor and pay less in commission. It’s a win-win situation for home sellers alike. Check out feeDuck today and keep more of your hard-earned money in your pockets where it belongs.
Written by Sean Cooper
Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. Sean’s helping others with their mortgages as an independent mortgage broker. Get in touch with him for all your mortgage needs. For a free mortgage consultation, email Sean@BurnYourMortgage.ca or call 647–867–3711.