Across the country, 9 percent of home sellers sold "FSBO," or For Sale By Owner, last year. Locally, that number is much lower–only 4 percent of Minnesota homes were sold FSBO in 2014 (Minnesota Association of REALTORS®). The number of FSBO homes has been dwindling for 20 years, and for good reason. Here's why you'll be better off hiring an agent to help you sell your Minnesota or western Wisconsin home.
Pricing your home
In our local market, we've seen both historic lows and unprecedented price increases over the last few years. Most homeowners simply don't know what their home is worth (or what the market is willing to pay for it), and it's common for FSBO sellers to price their home well above or below its optimal price.
To determine the listing price of a home, a Realtor takes into consideration everything from the tax-assessed value of your home, to how your home compares to recently sold properties nearby. This process is called a comparative market analysis, and Edina Realty's 2,300 licensed Realtors go through this process every day.
Reach out today for a free, no-obligation comparative market analysis.
The best online exposure
The National Association of Realtors (NAR) reports that 92 percent of homebuyers look for homes online, so an online presence is critical to getting your home sold quickly.
When you list your home with an Edina Realty agent, your home will be prominently featured on edinarealty.com as well as national sites like Zillow, Trulia and Realtor.com. Most FSBO sellers do not know how to get their listing to appear on every home search site, and most buyers don't visit FSBO search sites.
The commission issue
The primary motivation of FSBO sellers is to avoid paying a commission fee. However, NAR reports that homes sell for 25 percent more when sellers hire a professional Realtor to handle the sale from start to finish. That means that even after paying a commission fee, sellers still come out ahead when using an agent.
A focus on the first two weeks
Many FSBO sellers are not in a rush to sell their home, so they don't focus on the first few weeks after their home goes on the market. However, studies show that buyers are wary of homes that remain on the market—even if there is seemingly nothing wrong with them. When you work with a professional real estate agent, they will help you stage the home and add curb appealso you get traffic online and offline (via showings and open houses) in those critical first weeks.
When you work with a Realtor, they make sure to check a buyer's mortgage pre-approval before a private showing. To ensure you aren't wasting your time on unqualified buyers when selling FSBO, you'll have to review their mortgage paperwork before letting them in the front door.
Dealing with the paperwork and process
Even after an offer is placed, there is a great deal of red tape when selling. Here's a roundup of the routine paperwork that homeowners have to tackle when they get an offer on their FSBO home:
- Approving any contingencies in the offer or the inspection
- Hiring an inspector in an allotted time
- Hiring an attorney to approve the contracts
- Checking the buyer's mortgage paperwork
- Opening an escrow account for the earnest money deposit
- Ensuring the title work has been reviewed
Plus, if anything unexpected comes back after the buyer's inspection, the FBSO owner must negotiate with the buyer and their agent to determine a proper solution. This can be difficult when the buyer has retained an expert who negotiates contracts on a regular basis.
The long and short of it
When selling your biggest asset, you need an advocate who isn't afraid to demand a fair market price. Our Realtors take the business of buying and selling seriously and we'll negotiate fiercely on your behalf. Reach out today for a free market analysis of your home.
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