Some people may think that “For Sale By Owner” (FSBO) can be a great idea, maybe because they don’t need to pay the real estate agent commission. They probably think that they will keep all the money made in the sale of their house.
The truth is the whole process of selling a home is not exactly an easy process. It means it could be very complicated for those who don’t have related knowledge or experience, which may result in a waste of time and money, or in some cases may have legal consequences. Based on statistics, among the 36% house owners who try to sell their properties without hiring a real estate agent, actually only 11% are able to handle it properly. That literally means less than ⅓ of the home sellers who tried FSBO have been able to do it somehow successfully.
What does For Sale By Owner (FSBOO) mean?
FSBO or “for sale by owner” means the homeowner does not use the help of a real estate agent to sell their property. When you decide to sell your house by yourself, you may take advantage of not paying any commission fees, but you must handle all the work and negotiations that a top Toronto realtor can do for you.
One misconception is that, not paying commission on sale means banking the most amount of money for your home. A professional agent might be able to sell it much higher than what a home seller in a FSBO can sell. So at the end of the day the most amount of money in your bank is more important than saving a commission on a property that could be sold much higher. Right?
An experienced real estate agent has enough skill to do the research, setting the right asking price, marketing, listing and staging, and knows all the legal paperwork. Do you have enough time, energy, resources, or knowledge to do all of these tasks properly?
Offering a proper price for your Toronto home needs a lot of research and expertise in the Toronto real estate market. The way you price your house has a huge impact on the sale of your home as quickly as possible. So, before you decide to sell the house by yourself just ask yourself “do you even know how to price your house for sale in Toronto?”
Let’s review some cons and pros of FSBO.
Pros of FSBO
1. No agent commission
If you go for FSBO, you can save the real estate agent commission. The most appealing thing about FSBO is that the seller doesn’t need to pay the commission to the seller’s agent. But don’t forget, you still need to pay the buyer’s agent commission. If you don’t pay that, your chances of finding a potential buyer will be significantly limited.
2. You can handle the marketing and staging based on your own preferences and tastefulness
This could be another tempting aspect for FSBO, to do everything based on your own preferences. But even this part could be useful just in case that the owner has the experience of buying and selling in the past or has a real estate background. But if it’s your first experience, we seriously recommend you not to do that by yourself and ask for real estate advice. Because if you fail to handle the process, your home will sit on the market longer, or other issues may arise.
Cons of FSBO
1. Limited network
Real estate agents are connected to a huge network of buyers. It means even if you are extremely connected to your community, it won’t be comparable to theirs. They are regularly participating in different events involving potential buyers. Networking is part of their job. Someone who has no real estate background can never find such a useful network.
2. Full-time job
The whole process of selling a house needs a lot of work. It is very time-consuming for someone who has a full-time job or a family to handle, this could be a very challenging process. Listing, marketing, staging and open houses, negotiating and lots of paperwork, from the first to the last stage, it requires a lot of time and energy.
3. Pricing without the right tools
There are many different research tools available for real estate agents to determine the real price of a house. This is a very sensitive stage, because if you price your house too low, that will cost you losing significant amounts of money. On the other hand, if you price your home too high, your home will probably stay in the market for a longer time, which might lead buyers to think that your home may have a particular problem that has not been sold.
Yes you can always use the real estate valuation websites for approximate estimates, but remember the main advantage of real estate agents over you is that they are fully acquainted with your neighborhood and market, they also have the power of comparative analysis of other homes sold in your area. In addition to being trained how to handle this process, they also have access to comparative tools to do this specialized research.
Eventually, if you are insisting on going for For Sale By Owner(FSBO): it would only be wise to sell your house by yourself if you already have a strong potential buyer and a real estate attorney to help you with all the paperwork. Otherwise, if there’s no interested buyer available, you better be sure about what you’re getting into.
Read More: Mistakes to avoid when selling your house