Whether you drive by a house with a sign that says “For Sale By Owner” or you’re the person putting out the sign, before you take the next step, consider what it means to have a house “For Sale By Owner”.

Costs

Many people like the idea of buying or selling a FSBO because they presume that it costs less without agent’s commissions factored into the price. However, if you are a buyer with your own agent, you may still need to pay their commission out of pocket instead of from the purchase proceeds unless the contract with the seller agrees to cover that expense. When this scenario occurs with presumably only the buyer’s agent involved, the total commissions due might be lower than a listed property.

Pricing

Theoretical commission-cost savings could affect the pricing but since most buyers and most sellers entering a “For Sale By Owner” transaction are equally seeking to save those fees, it’s important to understand that both parties cannot save the entire amount. In most cases, the best that can be achieved by forgoing professional representation is some potential savings to each party. Absent professional pricing input, the prices of homes sold direct by owner are frequently higher than agent-listed homes because FSBO sellers may not have an informed estimate of the value of the property and/or the skills to interpret the comparable pricing information correctly. Not unexpectedly, many owners tend to think their homes are worth more than what the market will bear.  

Paperwork

In part, agents earn their commissions by managing much of the contract paperwork and overseeing the real estate transaction milestones. Without an agent, buyers and sellers will need to administer all the details themselves including required state and federal disclosures, needed addendums, adherence to dates relating to contract conditions and post-contract negotiations needed to reach the closing finish line successfully.  Absent this effective detail management, difficult problems relating to the house or contingencies can surface and result in transaction delays or even cancelled contracts.

Marketing

Marketing a home can be time-consuming, especially if the objective is to reach large numbers of prospective buyers who are qualified to purchase in a reasonable timeframe and ready to act now.  One key element in obtaining the best price includes massive exposure to the greatest number of potential buyers.  This could be a difficult goal for sellers who may be unable to match the reach of agents with their Multiple Listing Service access and an established online presence enhanced by great staging, photography, video marketing and skilled social media coverage. Building a strong marketing program from the ground up could undoubtedly be challenging while also juggling family and work obligations at the same time. So teaming up with a professional may be a better option for busy sellers. 

Especially for first-time buyers and sellers, it is typically helpful to partner with someone who has “been there, done that” for fewer headaches and less stress as the process advances. For additional information on buying or selling a home, feel free to contact me today for a consultation. I will be happy to answer any questions you may have, help you to find your dream home or determine the value of your existing property.

 


Allyson Hoffman, ABR, ACRE, CDPE, CRS, e-PRO, GRI, SFR, SRES
RE/MAX of Barrington
Serving Chicago's North Shore, North and Northwest Suburbs
847-310-5300
[email protected]

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Allyson Hoffman is your ultimate real estate resource for Chicago's North Shore, North and Northwest Suburbs and surrounding areas. Visit my website for detailed information regarding today’s real estate markets.    

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