When gearing up to sell your home, there could be a number of reasons you might be tempted to take on a For Sale By Owner sale. Maybe you’d like to avoid losing profit to a real estate agent, and you’re hesitant to involve another party in selling your property. Perhaps you think that you know your local market — and your own house — better than anyone else. You might question what a real estate agent could bring to the table that you haven’t already accounted for, especially when all the information you need is already online.
Even though roughly 70% of people start out with a FSBO, it’s a fact that FSBO sales aren’t usually successful. In fact, according to the National Association of Realtors Real Estate Statistics released in 2015, FSBOs only accounted for a scanty 8% of total home sales. That same year, the NAR reported that the average For Sale By Owner sales price was $185,000, while the average price for an agent-represented home was $240,000 — a staggering difference of $55,000.
What could be the reasons for such a drastic discrepancy between homes sold as FSBOs and ones represented by an agent?
Where the Real Estate Agent Fits In
According to Jody Parrish, an agent with Coldwell Banker Gundaker in Missouri who ranks in the top 2% of sellers’ agents in St. Louis, an agent’s “most important role is to help the seller understand the market and what the process is.”
In other words, top real estate agents have much greater access to local market trends and data that For Sale By Owner sellers don’t. They’re able to assess the market, equity of the home, and price the home as effectively as possible in the local landscape — steps of the FSBO process that can prove extremely difficult for home sellers without an agent’s knowledge and aid.
As an example, Parrish referenced the local St. Louis market — which recently slowed after the initial spring frenzy of home sales — as she expressed that she and other agents are now able to inform sellers that “there’s a little bit of a slowdown; don’t expect five offers the day we put your house on.” Rather than carrying on blind like most FSBOs, agents can “educate [sellers] about the process, using that to help them make good decisions about pricing and strategies.”
Preparing the House
Before actually listing the house on the MLS, agents can enormously aid homeowners in preparing the house to be shown — staging the home to be more appealing to potential buyers, finding a professional real estate photographer, and writing an appealing description that highlights the home’s most enticing attributes. While these steps may feel daunting for an inexperienced seller, it’s a process Parrish and other real estate agents know like the back of their hand.
“We really do a full marketing strategy,” Parrish detailed. “We have a stager come to the house for an hour. Move the furniture around, take out some of the pieces that might be offensive to some people.”
Parrish recounted one particularly poignant experience she had with a seller in Missouri who struggled to sell her home for years — until she listed it with Parrish. Once the agent and her team stepped in, they had the house under contract in about a week despite leaving the list price unchanged — receiving multiple offers in just the span of a week and a half.
“[She was an] older lady, who tried to sell it herself. She had been on the market for months. I met with her, [and] we really hit it off. But we’re a full-service brokerage, and she decided to list it with a discount broker for a one-year listing,” Parrish described. “After it expired — so now she’s been trying to sell her house for years, literally — she listed it with us…[She was a] fun, wacky old hippie. There were some things in her house that might need to be removed. We brought in stager, took professional photographs, marketed the heck out of it, and had her prepared to list it for the first time in years.”
“We sold it in about three weeks,” Parrish said.
Although this kind of scenario isn’t necessarily uncommon, this seller’s story is especially moving for Parrish, as the seller later revealed that she had Parkinson’s Disease and was trying to sell her home before her condition worsened — a process Parrish helped her accomplish in less than a month, even though she’d spent years trying to accomplish it alone.
Getting the Best Deal
Working the tedious For Sale By Owner process, it’s likely that the home seller won’t know all the tricks of the trade experienced real estate agents have spent decades learning. Parrish — who’s now spent 18 years in real estate — and other top agents have already mastered how to market a home, coordinate with all parties involved, and orchestrate an effective and desirable closing sale.
In another FSBO experience, Parrish described a situation in which a seller ran into a serious financial problem when closing the offer. Yet through her team’s dynamic and creative thinking, Parrish depicted how her team stepped in to find a solution for the seller, making it possible for the seller to actually close a deal on the house where it would have otherwise been impossible.
“This was a disaster,” Parrish said as she opened the story. “She was in a rural area, and they were on a road with a road club. Her house was worth about $100k. She found a buyer, but they were trying to close it, and she found that she owed about $25k in back assessments on a road club.”
Although an ordinary FSBO seller might have just given up, Parrish explained how the seller came to her for help. With some digging, she and her team actually found that the road club was illegal — in violation of a number of codes — and they could waive the seller’s dues.
Why For Sale By Owner Sales Fail
While it may be tempting to lean towards a FSBO sale in our Internet age, it’s clear that a top real estate agent’s prowess is unparalleled when compared to those of a typical FSBO seller.
From the get-go, realtors possess market data to better price the home in the local market and are able to better coordinate between potential buyers, necessary inspectors, or lawyers. And, as evidenced by Parrish’s experiences, they have access to much larger networks, have worked substantially in contract negotiations, and have far more experience staging a home for potential buyers.
While there’s no doubt that you know your home better than anyone else, it doesn’t mean you’ll be the best at selling it.
Don’t be fooled by how appealing a FSBO may seem at first glance. You never know just how much you might regret that choice later on.