SELLERS' CORNER

For Sale By Owner Or With Agent?

Once you've decided to sell, one of the first questions you'll have to address is: Should I hire an agent or try For Sale By Owner, known in the trade as FSBO. There's lots of emotion surrounding this question and it's difficult to get an unbiased opinion. While there is no simple answer, there are a few questions you can ask to help you decide which is best for you. Many sellers, thinking they can't afford to pay an agent's commission, go it alone; and sometimes those sellers are disappointed or worse. If you are not familiar with the sales process, it's easy to get into trouble trying to sell without the help of a professional.

Since I have no relationship with either approach, I will give what I think is an unbiased answer. I will describe both methods, and you can choose the one that best fits your situation.

Real estate professionals are quick to point out one of their favorite statistics. According to the National Association of Realtors®, sellers who use an agent net approximately 16% more at closing. While there's lots of disagreement on the methodology of arriving at that number, I do believe that agent represented sellers on average net more at closing than those who go it alone. How can that be? What about the commission that can range up to 6%?

While it's true that agent represented sellers will pay a commission-in today's market it's possible to negotiate a lower rate than what used to be standard-FSBO sellers are often disadvantaged by not knowing the actual value of their home. While anecdotal evidence may be helpful, one can't just determine price based upon the selling-or especially the listing-price of their neighbors' homes. What is needed is a Comparative Market Analysis or CMA. Realtors® can easily do the research necessary to determine the value of a property. Then, armed with that knowledge, they can guide sellers during the negotiating process, keeping them from lowering the price unnecessarily. Realtors® also will list their properties in the Multiple Listing Service or MLS which exposes the property to thousands of other Realtors® as well as millions of potential buyers.

On the other hand, FSBO sellers can pay a fee for an MLS listing, can do research on property values, and can do the marketing necessary to find a buyer. The question is: Is the average seller willing to do all that is necessary to sell their home or, more importantly, are they even aware of what is necessary? And do they have the time to dedicate to the process? Generally not. That's the major reason that many FSBOs take longer to sell. If both spouses have full-time jobs-and a stay at home mom is certainly full time-when will they do it? Determining value takes time and takes one's full attention. Then, there are the questions of being available to show the home on short notice, being sufficiently knowledgeable to answer potential buyers' questions, knowing and understanding financing options, and preparing a contract that does not unnecessarily favor the buyer. If you think you are prepared to meet these challenges, and there are some of you that can and will do a great job, then go for it. But, if you have any reservations, I'd recommend using the services of a Realtor®.

It may seem that I lean towards using Realtors®, and I do. Although I have been in the housing business most of my life, I've never sold a home without using one, and I've only purchased two without an agent's help. I've never resented the commissions I paid-I was paying for services I either didn't want to do or ones I felt others were better qualified to perform. Most of the Realtors® I've known have been hard-working, dedicated, and professional. Those who are not shouldn't be in the business and shouldn't be considered. For more info, click on the link, Recruiting The Experts.