Homeowners are beginning to take the sale of their home into their own hands and save a substantial amount of money in the process. For Sale By Owner (FSBO) signs are popping up everywhere because it can save a seller thousands of dollars and some bouts of anxiety too. The truth is that selling your home is not as difficult as it once was a decade ago before homebuyers discovered the Internet and shopped online. Reozom.com reports that in 2016, 44 percent of homeowners shopped online first when buying a home. That is good news for home sellers who want to save money.
Cut out the Middleman to Save Money on Realtor Commissions
Forbes reports that agents’ commissions in 2018 are averaging close to five percent. On a $300,000 home, the average commission for a traditional realtor’s services is $15,000. That is a substantial amount of money for the basic service of negotiating your house’s selling price and fielding offers when these are tasks that many sellers feel confident to handle on their own. According to 2014 data published on Reozom.com, FSBO sales saved home sellers an average of $10,790 per sale in traditional agent commissions.
Use MLS to Advertise
Now that it is possible to post your listing on MLS, the average home seller can harness the same advertising source that realtors use for marketing purposes. This was always one of the main reasons sellers felt they had to list their home with an agent in the past. They knew they needed to get the attention of the masses by using MLS, which was exclusively a realtor’s tool until recent years.
FSBO Homes Sell Faster
A major concern that sellers consider is how long it will take to sell their home. In situations where the move is necessary for a new job or as the result of financial stress, time is of the essence. There is good news for FSBO sellers who need to sell fast. According to Reozom.com, 2014 selling statistics reflect that the average days on the market for FSBO homes were less than traditionally sold homes, with the latter category selling on average in 109 days as compared with 89 days by FSBO methods.
Keep the Selling Process Simple
Many real estate agents give sellers their marching orders with lists of “things to do” to sell the house. Agents can be pushy since they don’t earn a penny until the house closes. With that type of motivation, it is common for eager agents who need a paycheck to push sellers to take the first offer, possibly leaving thousands of dollars on the table.
Unfortunately, this “conflict of interest” between the agent and seller is a natural byproduct of any sales cycle that is driven by commission sales. Home sellers should not be surprised when an agent strongly encourages them to take a low offer, running back and forth between you and the other real estate agent, with the main goal of getting your signature on the contract.
Leverage your Price Advantage and Flexibility Gained from a FSBO Sale
Considering the high price of realtor commissions, a For Sale By Owner transaction provides you with more pricing flexibility when it is time to negotiate with a buyer. When competing against other sellers with comparable homes that use realtors, you can drop your price some and still make more money on the sale than your competitors who are paying out the average five percent commission. This type of leverage can come in handy in a competitive buyers’ market.
Selling your home does not have to be a stressful event. You can take charge of the transaction, save money and also keep your sanity. Using your common sense and reading through all offers carefully is highly recommended. The thing to remember is that no one will look after your interests better than you can. Even though a real estate agent may sign an agreement declaring their allegiance to you, they have bills to pay every month. Under pressure, they will push you to sell when it suits their needs.
People are only human, after all. It is a flaw in any sales transaction that should not be ignored. You can expertly negotiate your own home sale by taking the necessary time to review real estate contracts. Never rush through this process. Remember to read every page, including the handwritten stipulations.
While there are things that realtors learn over time that can be helpful, it is hard for most sellers to justify a five percent commission for those services. Realtors’ commissions essentially reallocate a significant portion of your equity to them. You have the option to keep more of your money in your own pocket.