Going It Alone
An adage in the legal profession goes, “A man who represents himself has a fool for a client.” In the housing industry–particularly realtors–feel the same way about those who attempt to sell their own homes. And yet, For Sale By Owner, or FSBO, persists, with the temptation to cut out an agent and the typical 6 percent commission that comes with them. Trulia, San Francisco, estimated 6.2 percent of all home listing in the U.S. are FSBO. But with such temptation comes risk, Trulia said. When it comes to actually listing the home, Trulia reported FSBO sellers are slightly more optimistic about the value of their home and list their homes at a 2 percent premium nationally.
“This sounds like great news for sellers, but there is a risk: FSBOs often see their homes sit on the market longer than agent-listed homes, sometimes by more than a month,” Trulia said. So, is FSBO worth it? “Ultimately, it’s not unreasonable for sellers to consider a FSBO listing considering the potential payoff,” Trulia said. “But it’s important to remember the value agents bring to the table. They have access to more listings and buyers, know a market’s ins and outs and have experience negotiating a deal.”
More importantly, a listed price in many markets is just a starting point,” Trulia said. “In some markets, properties can be priced lower to start bidding wars,” it said. “FSBOs also run the risk of underpricing their homes.” Additionally, Trulia said FSBO properties run the risk of languishing–perhaps due to the inexperience of the seller in finding and negotiating with a potential buyer.
Source: The Mortgage Bankers Association