Pros and Cons of Selling A House FSBO
Wondering whether a For Sale by Owner approach is right for you? Read on to know the pros and cons associated with this selling strategy.
It’s YOUR house, do it YOUR way.
It is natural for home sellers to generate as much financial benefit from their sale as possible. One of the most common ways of doing that is eliminating a real estate agent and, along with it, their fee and commissions. Therefore, more and more sellers have been thinking about how to sell a house by owner.
However, where a For Sale By Owner (FSBO) sale might bring in more money for you, it might also present some drawbacks.
In this article, we discuss the pros and cons of an FSBO selling strategy so that, as a potential house seller, you can decide whether to adopt this approach or not.
Pros of a For Sale by Owner Approach:
- You get a more massive chunk of the proceeds: Real estate agents have fees dependent upon the value of the house. So, the more you sell your property for, the more you have to pay an agent. This fee payment, which can often go as high as thousands of dollars, can be avoided if you decide to sell your home by yourself. Unsurprisingly, then, this is the biggest reason why house owners decide that they are better off with an FSBO strategy.
- You control the sale: Without an agent, you are driving the entire sale procedure. You do not have to take opinions regarding pricing, marketing, or negotiating strategies, preparing your home for a sale, or any other important decisions. Of course, being all on your own is often a double-edged sword. Where you do not have to listen to or follow anyone, you are also deprived of the invaluable expertise and counseling that a professional agent could have offered.
- You can dedicate undivided attention to the sale: If you hire a competent agent, you will not be their only client, and therefore, not their only concern. On the other hand, if you decide to go it alone, you will make sure that you devote all your available time and effort to the sale of your house. Moreover, you will not compromise since you do not have the pressure to take the very first offer that comes your way.
- You know your house: You are the top-expert about your house. This knowledge will allow you to market your home from the perspective of an owner.
- Chance to use your digital network: Most home for sale by owner sales are executed through the owner’s network. If you have an impressive following on social media, you can use it to share your house’s information far and wide.
- Additional benefits: Certain circumstances can dramatically increase your odds of a successful FSBO sale. This can happen if you either live on a busy road or live in a region with several other houses listed for sale by real estate agents. Living on one of the main roads means that your signage will be visible to a lot more people, while being in a neighborhood where other houses are up for sale will allow you to take advantage of the traffic generated through those other properties and real estate agents.
Cons of a For Sale by Owner Approach:
- The financial benefit might be less than expected: While you will save on agent fees, you will probably not be able to fetch the kind of price that a professional would have. An agent is highly knowledgeable and experienced in aspects like marketing your property to the right buyers, pricing it competitively, and negotiating based on your house’s facts and qualities.
- It is hard to market your home, especially if you lack a strong network: If listing a house is easy for you, it is just as easy for everyone else. What makes you stand out to prospective buyers is good, impactful marketing. The agent does not only list your home on the internet; they can get the message across to a number of other agents working for home buyers within your region.
- Everything becomes your responsibility: When you decide to take the FSBO route, you are required to handle every single step of the entire sale process. You will have to get your house inspected and repaired (if needed), photographed, listed, and shown. Upon finding an interested party, you will have to be the one to answer their phone calls, show them the home at their convenience, and negotiate the best price. It is one thing to sell your home; it is another thing to do it well.
- You might struggle to qualify the buyer: Upon getting an offer, you will have to ensure that the buyer is actually qualified to make the purchase, and owners often lack the skills needed to do that. The task goes far beyond merely acquiring a mortgage letter. You need to understand the distinction between being pre-qualified for a mortgage and being pre-approved for it – in most cases, the latter is worth nothing, but owners do not realize that and end up messing up the whole deal.
- Bargain buyers will target you: Certain buyers will notice that you do not have an agent, and all they will see is a house owner who will be happy to sell for less. You also need to know that, even without an agent, it is highly unlikely that you will be able to retain the entire commission fee. In reality, most buyers are looking to get a piece of the pie.
- Lack of objectivity: It is essential to view the house impartially in order to price it correctly. However, your emotions, memories, and sentiments associated with the house might make it challenging for you to make objective pricing decisions.
In conclusion, you can see why so many people wonder about how to sell a house by owner – the approach has numerous advantages. However, it is also not without its drawbacks. Apart from that, your specific circumstances might also determine whether an FSBO sale is the correct method for you or not.