Pros and cons of selling a home on your own
Selling a home requires a vast understanding of the real estate market. Deciding to market your home as a FSBO (For sale by owner) can be a difficult endeavor and will take time, energy, and a lot of patience. On the other hand, if you enter this process informed and educated, selling your home on your own can potentially save you a lot of money. It is not something to take lightly; therefore you must take careful consideration and weigh the pros and cons of selling a home on your own. Read our list of pros and cons of selling a home on your own to get started.
- Be prepared to shell out anywhere between 5% – 8% of the total sale price when you hire a real estate agent to help you sell your home. On the other hand, when you sell your home on your own, you forgo paying any commission costs. This puts you in position to pass these savings on to the buyer, reducing the price of the home, ultimately increasing the speed of the sale.
- Selling your home on your own means that you will retain full control over every aspect of the sale. You get to pick the price, decide exactly how you wish to market your home, and how to negotiate with the buyer. You will get to set up appointments for potential buyers to see your home and not have to deal with people showing up at any time throughout the day.
- One of the pros of selling a home on your own is being the best-qualified person to do so. You know your home better than anyone and can point out important features to the buyer. A realtor can easily overlook these incentives, as they try to remember the features of all of the homes they are currently selling.
- Depending on how comfortable you are negotiating over a price, you may prefer the opportunity of negotiating directly with a buyer. This will give you a peace of mind, as you are less likely to miss any opportunities.
- One of the biggest cons of selling your home on your own is the lack of resources that will be available to you. While there are many venues that you can utilize to promote your home, only realtors have access to some of the biggest online tools, such as the MLS (Multiple Listing Service). And since 80% of home searches begin online, lack of such valuable resources can make the process of selling your home on your own much harder.
- Another big drawback of selling your home on your own is incorrect pricing. Become familiar with current sales in your neighborhood, and most importantly the current market conditions to help you set the right, asking price. Overpricing your home will intimidate and potentially scare off prospect buyers. Not to mention, the financial loss you can suffer if you set the price too low. If you need to sell your home quickly, your best bet is to price it at or below the market value. Either way, to increase your chances of selling, you have to price your home competitively. A realtor has access to such data, and experience to know the most accurate price to start at, when to reduce the price, and an appropriate price to accept during negotiations.
- One of the biggest cons an FSBO faces is the ability to attract potential buyers. A realtor will screen and pre-approve potential buyers before showing the property to ensure they can afford to buy your home. This can be a difficult process if you are selling your home on your own. Not to mention the challenges of dealing with low-ballers. Much effort and expertise is required to deal with these types of buyers and settling for a low-ball bid is by far worse than paying a realtor’s commission.
- Another disadvantage of FSBO is taking on the responsibility of preparing all of the proper paperwork, legal forms, and disclosures. Most people are not familiar with the guidelines and requirements and put themselves at risk of financial and legal liability. Nobody wants to lose a sale due to incomplete paperwork or for not meeting disclosure laws.
- Another great disadvantage of selling your home on your own is the time you will have to invest in the overall process. Selling a home is extremely time consuming and will require a lot of research on your part. You will need to learn about the current market, advertise and market your home, show the house to potential buyers, negotiate contracts, and much more. Attracting the wrong kind of buyers is also a waste of time as they are generally, just looking.
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