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The seller’s market shows little signs of slowing down this year. For homeowners looking to sell their home, now is as good a time as any. But what’s the best way to go about it? Should you put your home on the market yourself? Or is the more traditional approach of listing a house with a realtor the better option?
Let’s explore this question of using a realtor vs. using for sale by owner. We’ll examine what FSBO involves, and we’ll take a look at the pros and cons of each approach.
To understand the for sale by owner vs. realtor question, you first need to take stock of all the requirements that the FSBO process entails.
Set an asking price. Setting your own price may sound attractive, but it takes some diligent research to make sure you’re not choosing a figure that is too high or low.
List your home. Because most buyers use realtors, you’ll want to list your home on the Multiple Listing Service. It is exceptionally difficult to find a buyer if you do not do this.
Advertise your home. Once your home is listed, you’ll need to market it. Set up signs, post flyers, and advertise your home on sites like Craigslist and Facebook.
Host an open house and schedule viewings. You’ll need to make yourself and your home available to prospective buyers.
Heed all laws and bank requirements. A home sale is a complex transaction. You’ll want to ensure you’re following all requirements so you don’t end up with a lawsuit or run afoul of the law.
Now that we know what FSBO entails, let’s look at the most significant benefits.
More money in your pocket. You’ll spend some money on listing fees and other costs, but you won’t pay the typical 6% commission. That’s substantial savings.
Greater control. You run the show. You can schedule open houses and viewings when it suits your schedule. You can set your own price.
More information for prospective buyers. You know your home better than a realtor ever could. You can leverage this knowledge by sharing pointed, specific information to entice buyers.
As you think through a private sale vs. real estate agent sale, consider the drawbacks to the FSBO approach.
Time and effort. Selling your home takes time. You’ll need to spend hours researching the market and legal requirements. All the responsibility is on your shoulders.
Legal risk. Home sales aren’t cut and dry. You take on some legal risk as the seller.
Limited expertise. Realtors have deeper knowledge of the real estate market. Your comparatively limited expertise could mean your home doesn’t sell as fast or you don’t get as much money from the sale.
Real estate professionals provide a valuable service. Here are the benefits of using a real estate agent.
Knowledge and guidance. A good realtor knows the market inside and out. Realtors can share what they’ve learned from previous sales, offer market expertise, and guide you through each challenging step of the selling process.
Less hassle. Realtors take on the responsibility of fulfilling legal requirements, coordinating showings, communicating with buyers, and so on. Each task is one less thing you have to do.
Swifter home sales. Realtors can use their resources to better market your home and get it off the market more quickly.
There are some drawbacks to using a real estate agent, however.
High commission fees. A realtor usually takes a 6% commission. That can be many thousands of dollars—even tens of thousands—for an expensive home.
Potential for neglect. Realtors represent multiple clients and may have limited time. Some homeowners get frustrated by limited access or attention.
Disagreements. Your realtor may suggest a lower asking price than you’d like to get the home off the market sooner. They also may suggest open houses or showings at times that you do not prefer.
Ultimately, deciding between using a realtor vs. selling yourself comes down to how much money you want to save, how much time you’re willing to invest, and how much control you want during the selling process.
If you choose to go it alone, consider a seller home warranty to attract buyers, raise your home’s value, and expedite your home’s sale. Your real estate agent would take advantage of a home warranty for realtors—why shouldn’t you do the same? As for who pays for home warranty—buyer or seller? Usually the seller, but a warranty is a fraction of a realtor’s commission.
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