Do you want to cut out the middle-man when selling your home?
When done right, selling your home yourself can be a rewarding process. You’ll get a deeper insight into real estate and a better appreciation for how the process works. But if you’ve never done it before, you may not know what you’re getting yourself into.
Don’t worry! Read on for our guide to the pros and cons of selling a house for sale by owner.
What is For Sale By Owner (FSBO)?
Selling a house for sale by owner is where you sell your home without the aid of a real estate agent. You might see it shortened to FSBO.
With no real estate agent, you avoid paying any commission. Your marketing costs will only be what you decide to list your home on.
The Pros of FSBO
So, let’s start with the benefits of going FSBO. There are a whole host of benefits to make use of. These include:
Don’t Pay Commission
One of the most obvious benefits is the fact that when you sell your home yourself, you don’t need a real estate agent. It’s the norm that real estate agents charge a ‘commission’, or a fee based on a percentage of the sale price.
By not hiring one, you’ll save thousands of pounds. Depending on the value of your home, you might even save tens of thousands. This reason alone is the usual driving factor to try to go it alone.
You’re in Control
When selling your house yourself, you have full control. Every step is down to you and your preferences.
You don’t have to listen to anyone’s suggestions about marketing, price, and negotiation. You can decide to stage your home or not; presentation is down to you too.
All the decisions are yours to make and in this matter, you’re the boss. While this can be a huge time saver if you know what you’re doing, you may also lose expert advice when you need it most.
There are No Distractions
Any real estate agent that’s worth their salt is going to have a whole host of other clients on their books. This means that they’re not only going to be working for you.
With FSBO, it’s your top priority and you can dedicate all your spare time and energy into selling your home. After all, you’re not going to have any other clients besides yourself, are you?
But, this is only an advantage if you actually have the time to spare and dedicate to selling your home yourself. If you’re working long hours or unsociable ones you can’t do viewings. You might not even have the spare time to put up a decent advert.
So, before committing, consider whether you have the actual time or not to put into this.
The Cons of FSBO
Now we’ve seen the good parts, let’s consider the cons. Nothing is perfect, and there are going to be compromises you need to make:
Saving Less Than You Think
It’s true, with FSBO you won’t have to pay commission. And that can be a huge saving right then and there. But, if you’re not using a professional agent, your home might not fetch the price it might have done.
A big reason FSBO fails is that people price their homes at the wrong figure. There are two factors to consider when working selling and these are the price and marketing. Without getting them right, you could miss out on many potential buyers and struggle to sell. Armed with the hard facts, agents are pros at negotiation to make sure your home isn’t undervalued.
Consider supply and demand. When you’re selling, you want to bring in as many offers from different people as you can. This puts you in control with the ball firmly in your court. The price can go up past the asking price if you have many different people falling in love with your home.
Factoring marketing and time-based costs, you may not save as much as you think. You also have to remember that it’s time you’ll never get back again, even if you fail to sell your home. So weight up if it’s worth it.
Poor Marketing Reach
Listing your home online is quick and painless. It doesn’t take much effort. But if it’s easy for you to do, then it’s easy for everyone else too.
Good marketing makes sure you’re standing out from the crowd. You need to have an ad that buyers notice, and that’s clear about what your house offers them
An agent offers you more than a well-marketed ad too. They will spread the word to other real estate agents working with buyers in the area. This network is of a huge advantage when it comes to getting the word out about your house. And without an agent, it’s unlikely you’ll have access to it.
This also goes hand in hand with MLS (multiple listing service) and the go-to real estate sites like. Big-name agents also have their own sites that draw in buyers more often than not.
The simple fact is an agent can reach buyers in places your ad alone can’t.
High Time Investment
If you want to succeed you’re going to need to dedicate a lot of time to sell your house. You need to inspect your home and make the necessary repairs. But only focus on those that will add value to your home.
You’ll then need to photograph and put together a video tour, write your listing and post it to all the sites you can. Not to mention showing interested parties around, answering phone queries, and more.
When an interested buyer contacts you, you need to show availability and be quick to answer. If you don’t seem interested, they’ll lose theirs. You’ll also need to hone your negotiation skills to make sure you’re getting a fair price.
It’s easy to say you want to sell your own home. But if you’re not going to put the work in, you’re doomed from the start. The National Association of Realtors state that over 90% of all FSBOs fail. And what do they do then? Hire a realtor.
Extensive Legal Research
Each postcode will have its own regulations and laws that relate to buying and selling homes. You need to research completely any paperwork or permits you might need for a real estate sale.
For example, does your state need you to have a septic system inspection before listing? Or do you need to have your carbon monoxide/smoke detectors inspected? It’s the little things like that which catch out people going down the FSBO route.
If you’re not a legal expert, it’s tricky to navigate, understand, and even find this information. Realtors already have it on file, and will make it their business to follow any legal changes.
A lot of people will try to sell their home without stating what’s wrong with it (repairs, issues, etc.) and think this is OK. It’s not. In most states, not being honest about the issues your property has will get you in deep, hot legal water.
Buyers Looking for a Steal
FSBO properties tend to draw in a certain type of buyer — those looking for a bargain. They’ll assume one of 3 things:
• You don’t know what you’re doing so priced undervalue to avoid putting people off
• You’re easy to convince to drop the price undervalue due to inexperience
• You’ll be willing to sell for less due to the fact they can point out you have no real estate agent fees
You need to be on the lookout for these types of buyers and handle them right.
A big misunderstanding of FSBO is the owner is pocketing all the commission savings. So, most buyers want to get in on that share of commission savings buy getting you to lower your price.
But as we’ve seen, when time and marketing costs factor in, this isn’t the case at all. The savings aren’t that high. Watch out for these buyers as they could end up conning you into making a loss if you let them sweet talk you.
Still Needing an Appraisal
Even without an agent, you should still have your home appraised. You likely won’t have the experience to price your home at the right price for you and the buyer. A professional appraisal is the best way to help with this.
If you’re pricing too low, you’re missing out on the true worth of your property and that’s money down the drain. If you price it too high, it’ll put buyers off. And houses that sit on the market for too long also drive buyers away as they assume something must be wrong with it. Even if it’s perfect just priced too high.
Most agents will conduct a full market evaluation on your house as part of their package. If you choose to go it alone, you’re missing out on that expertise. You’ll need to find a reputable appraiser yourself, and it’ll cost you.
Selling a House For Sale By Owner — What You Need to Know
So, there you have it! Now you know the pros and cons of selling a house for sale by owner.
Going it alone isn’t going to be easy. It’s going to take a lot of hard work, dedication, and time. And money. You might be saving on commission, but you’ll need to do everything yourself.
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