Your house is sold when you sell it yourself ““FSBO”—it may seem to be a terrific method to save thousands. On a $250,000 house, a conventional real estate buyers agency commission is 5 to 6 percent, or $12,500 to $15,000. 1
Consider if saving money by acting as your own seller’s agent is worth the risk. Here are eight reasons to rethink.
Buyers Agencies Cannot Show a “For Sale By Owner”
In an FSBO transaction, the buyers agencies understand there will be no professional counterpart. Without an agent representing the seller, and without a guaranteed commission, a client may be hesitant to make an offer.
“I only show FSBOs for two reasons: no other inventory available or the price is absurdly low,” says Bruce Ailion of RE/MAX Town & Country in Alpharetta, Ga. Ailion argues that in most FSBO transactions, the seller does not pay the whole negotiated fee, or any payment at all, to the agent who brought the buyer. “FSBO sellers are perceived as unrealistic, unreasonable, and difficult sellers,” he adds.
However, there are buyers agencies that will present your house properly. That may include signing an agreement with the agent outlining the percentage charge the seller will pay. (The agent may provide a 6% commission to both buyers and sellers. Instead, negotiate a 2–3% overall commission.) A contract should also state that the agent exclusively represents the buyer. Also, as the buyer’s representative, the buyers agencies must reveal to the client any information provided by the seller, such as a deadline to sell.
Agents Do Not Sell Yourself
Selling a property is always a stressful event. Having an agent saves you from overpricing your house, refusing to challenge a poor offer because you’re angry, or giving in too readily when you have a deadline to sell. “A buyers agency may follow up without seeming eager or desperate; it’s their job,” adds Ailion. “Repeated checking by a seller indicates a readiness to accept a lesser price.”
If you don’t use an agency, you’ll have to deal with rejection directly from buyers agency personnel. “Some of the statements made by purchasers and their brokers may be pretty unpleasant to the homeowner,” says David Kean of Beverly & Co. in Beverly Hills.
An agency may soften the blow of rejection and turn it into a positive. “There’s no third party to bounce ideas off of,” says Jesse Gonzalez, president and creator of North Bay Capital in Santa Rosa, Calif. “For example, if a property sits on the market, the owner has no idea why.”
In addition, constructive criticism from a broker who is on the seller’s side and trying to obtain the best for them might be easier to stomach.
Full-time Real Estate Job
Do you have to hurry home every time someone wants to visit your house? Can you leave a meeting every time a possible buyer calls? Do you have the energy at the end of a hard day to promote your home? Are you a home marketing pro?
Do you have prior experience? Most likely, you answered “no” to each question. The answer to all of them is “yes.” A lockbox for your front door permits buyers agencies to display your house even if you aren’t there.
Agents Access Big Networks
Yes, you may market your house on Zillow, Redfin, Craigslist, and even the MLS. But is it enough? Even if you have a significant personal or professional network, they are unlikely to help you sell your home. You don’t have customers, a buyers agency, or a real estate firm to help you sell your house. A smaller pool of possible buyers implies less demand for your property, which means you may have to wait longer to sell and earn less money.
“A smart real estate agent should have a Rolodex of names and contact information,” says Pej Barlavi, owner and CEO of Barlavi Realty in New York City. “I send out an email blast to over 3,500 contacts within 48 hours of listing a home. Then I start marketing the home on every accessible website, MLS, and real estate site to keep the momentum going.”
The buyers agencies can tell whether a potential buyer is a serious buyer or simply a dreamer or inquisitive neighbor. Every time you have to put your life on hold, clean up your house, and show your home, it’s a hassle. You want to save the difficulties for the most profitable showings.
Moreover, a buyers agency personnel is educated to ask qualifying questions to assess a prospect’s earnestness, qualification, and motivation. He/she is also taught to ask purchasers how long they’ve been searching, if they’ve seen other properties that meet their criteria, whether they’re paying cash or prequalified, what schools they want, and so on.
It’s also unpleasant for buyers to see a house with the seller rather than the seller’s representative. “Never exhibit a home with the owner present,” warns Kean. A present owner living in the property makes a prospective buyer feel uneasy. The majority of purchasers will not notice or recall much of what they see while a vendor is there. Learn more about how to spot a bad buyers agency.
Price Talks Practice
Even if you have sales expertise, you haven’t negotiated a property sale. The buyers agency does, therefore they’re more likely to win the deal, leaving you with less. Expert sellers have negotiated hundreds of house sales, adds Kean. “We know the tricks, the symptoms of an anxious or dishonest buyer.”
If you don’t have a personal agent to point out your unreasonable behavior, you’re more prone to make terrible judgments. Instead of an aggrieved seller responding emotionally, an agent would say something like, “The seller has denied your original request but has made the following counteroffer.”
Solo sellers are often unfamiliar with local norms and market circumstances. In Seattle, Rob McGarty, owner and authorized broker of Bushwick Real Estate, thinks agents have an edge because they know the market and what drives demand.
Gonzalez adds that agents are also familiar with local conventions, such as who pays for transfer taxes and closing charges.