When stepping into the world of real estate, many feel they are ready to go at it alone, without an agent to help. This does not always bode well once you are in the thick of the home selling process eyeing contracts filled with unfamiliar language. When attempting to sell “For Sale By Owner,” unforeseen challenges can arise, whether you are a first-time or seasoned seller. We’ll look at some of the biggest issues self-sellers are facing today.
“I’m not an expert, you’re not an expert. So let's leave it to the experts.” —Patti Pallito, former For Sale by Owner.
Putting in the Work
Selling your home is a full-time job. If you already have a 5-day work week, then selling on your own can become an increasingly stressful and time-consuming task. When talking with listing agent and team owner, Elise Polli, she discussed some of the challenges folks face when attempting to sell on their own.
“The most common thing I hear from our clients that were formerly trying to sell [For Sale by Owner] is ‘I had no idea how much work this would be.’”
Work comes in the form of marketing the listing, gathering Planning and Zoning documents, taking professional photos, staging (and potentially having to buy props), answering countless questions from potential buyers and agents, scheduling (and re-scheduling) showings, following up with each buyer who has had a showing, conducting a market analysis for accurate pricing, and trying to negotiate without making an emotional decision.
You’ll have your hands full with moving, working, and making your home show-ready. Leave the listing work to a professional who is paid to do so year round.
Lack of Market Knowledge and Resources
Not only is there extensive work that goes into selling, but there is market knowledge that sellers are not privy to unless working with an agent. An article from Ramsey Solutions discusses being a For Sale by Owner and what it costs to lack the real estate market knowledge. “The truth is that you don’t know as much about real estate as an agent who does this day in and day out. You could price your home so low that you’re giving it away, or price it so high that nobody shows any interest. It’s an agent’s job to know about movements and buyer interest in your local housing market. They’ll also be able to expose your home to many more buyers through a Multiple Listing Service (MLS), which is difficult for FSBO sellers to get access to—if they can do it at all.”
Elise recently sat down for an interview with a For Sale By Owner turned client, Patti Pallito, who did not realize the work it would take to sell nor her property’s worth in the current market.
“First thing I want to say is what an idiot I was to actually think to go For Sale By Owner. The reason I thought it was okay is because the market is very strong, and I had so many people when I was moving saying, ‘Are you selling your house? I’m so interested in it.’ I thought if I had potential buyers, then I could do it myself. I started to look into the process and realized this is a lot of work, this is not my expertise, so I need to bring in an expert.” (Watch the full interview here.)
Patti had started giving showings to folks interested and even had a potential buyer lined up to go under contract. The offer she was poised to accept while selling solo was over $100,000 less than what she ended up receiving working with an agent. This brings us to our next point: you’ll lose out on money when selling solo.
Leaving Money on the Table
One of the main reasons people choose to sell without the help of an agent is wanting to avoid paying their commission fees. Avoiding the commission fee usually leads to people losing out on more money than the 2-3% a listing agent takes at closing.
A report from the National Association of Realtors looked at the difference in pricing between For Sale by Owners and those working with agents. “FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 last year (up from last year), and signiﬁcantly lower than the median of agent-assisted homes at $242,300.”
Removing the Emotion
A home is one of the most important and personal purchases a person can make. Selling can be an even more difficult decision and it can be hard to leave your feelings behind when it’s a property you’ve spent years living in and making your own. Agents are incredibly useful because they can take the emotion out of decisions to help you choose the offer that suits you best.
They’re also well versed in any possible contract or inspection-related issues that can lead to drama when negotiating for yourself. “There's any number of issues that can come up related to contract contingencies which could lead to the transaction falling through. Agents can take the emotion out of the transaction and problem-solve to hold deals together because we've encountered similar issues in the past. We've problem-solved everything from failing septic systems to radon to tenant issues to plumbing issues on the day of closing,” said Elise.
The Final Verdict
When asking if you can sell a home without an agent, the answer is yes. Will you reap the maximum financial benefit or have ease and peace of mind throughout the process? Probably not. If you’re selling, it most likely means your heading for a change in life. While you focus on the next phase, let an agent handle getting the home sold with as little strain on you as possible.