For Sale By Owner (FSBO) appears to be an easy way to save money. Some people believe that paying an agent is too expensive and can avoid spending 3-6%. While the sales commission is partially saved when you don’t use a listing agent there are some hidden dangers that are often overlooked when you don’t use a licensed agent to assist you.
Maze of legal forms….
The complex maze of forms and legal considerations could be the most important of the 3 reasons I’ll discuss in this post. When I talk about the required Residential Property Owners Disclosure (RPOD), Mineral Oil and Gas Disclosure, or the Due Diligence request and you have no idea what I am talking about and why they are required, you are certainly not prepared for to sell the home without the assistance of an agent.
I know a local attorney who won’t handle the closing for a FSBO because with no real estate agent involved, there’s no professional to make sure things get done correctly and on time. Simple questions like what happens when someone misses a deadline or if a problem comes up with the home inspections , with out an agent involved it gets too complicated and convoluted.
It’s not as big a savings….
If you don’t use a listing agent you are only going to save half of the commission. A buyers agent is going to expect to be paid a buyers agent commission for bringing a buyer to you When you list with an agent the agreed upon commission is given to the listing agent, and they split the commission with the buyers agent, and even if you don’t have a listing agent involved, if a buyers agent brings a buyer to you they anticipate and expect to get paid by you to do so.
AND if you are not using an agent, you are going head to head with a professional and licensed buyers agent. That agent fights real estate battles every day and you are going up against someone who knows the industry much better.
Leaving money on the table
Another common issue that comes up when not using an agent, is under pricing your home and leaving money on the table for the buyer or over pricing your home and missing out on buyers. A buyer knows when you aren’t using an agent you are already saving up to 3% and they are going to take that into consideration when making their offer.
If you under price your home you give the buyers a major bump in their equity. I was recently told a story where a local seller placed their home for sale FSBO. They put the info on a local social media site and within a short time had an offer from a buyer, sight unseen. The seller was thrilled to know they made so much money without the help of an agent in such a short amount of time. They were very happy, until they discovered based on current market values, they had underpriced the home by over $25,000. Thats a lot of money to just hand over to someone and far less than what they would have paid an agent, who would likely have discovered the true market value of that home.
If you like these videos there are more on the way. I have a list being generated that will take me all the way through the end of year and into episode 100. If you have some ideas on things you’d like to see covered be sure to send them my way. Also head over to the web page where you can find some additional info on all things Albemarle area real estate. Welcome Home!
Chris Whitehurst
Rose and Womble
ChrisWhitehurst.com 252 312 2263