In a hot market, like the Triangle of North Carolina, homeowners may be tempted to put a sign in their yard that says, "For Sale By Owner." The process, commonly called FSBO, is most popular when sellers already know who they are selling to, but it is also tempting when owners think they can keep more cash that way.
In fact, keeping the full value of the sale and not working with an agent are the top reasons why people choose FSBO sales, according to the National Association of Realtors 2022 General Trends Report. However, statistics consistently show that agent-assisted sellers make more profit than FSBO.
While few will dispute the fact that FSBO homes will likely sell in this market, there are common pitfalls that inexperienced sellers may fall into. In addition, there are added benefits to working with a Realtor that often increase the sale price and decrease the stress on the seller. Before deciding whether to try FSBO, here are five things every seller should consider.
Return on investment
While statistics show that agent-assisted-sellers make more profit than FSBO, there is another side to consider. Even if a seller pocketed the exact same amount of profit whether they worked with a Realtor or not, sellers often forget to add in the hidden costs.
Realtors do all the work that ensures the home goes for the absolute best price possible. From having access to the most up-to-date comparable sales, to taking the time for showings and paperwork, using a real estate agent means that sellers don’t have to take time off work, or take time away from other pursuits to sell their home. Many FSBO sellers don’t fully appreciate the amount of time that selling may take until they are already knee-deep in time debt.
Greater exposure means more potential buyers
Licensed Realtors have access to marketing tools and platforms that may be unavailable to independent sellers. The MLS is the most-well known tool. It stands for Multiple Listing Service and it is a database of homes for sale in a particular region.
Triangle Realtors have access to TMLS, Triangle MLS, which highlights available homes for sale. When you hire a Realtor who is part of our local MLS, TMLS, you are in essence hiring thousands of Realtors to sell your home.
What makes this tool particularly effective in the current market is that many of the highest bids may come from people out of state. They will not necessarily be driving through neighborhoods looking for signs, they will be searching online and trusting the expertise of local real estate agents to find their dream home in a new market.
Professional photography, staging and advice
While every homeowner might feel like they are the expert in their home and in their neighborhood, there are many aspects of selling a home that are greatly impacted by bringing in professionals, especially photography.
As mentioned above, because homes sell so quickly and because many buyers come from other markets, knowing how to make your home look good online is vital. Realtors work with professional photographers who know the best angles, lighting and vantage points to make homes shine. In today’s world, pictures are the most important aspect of marketing your home. Virtual tours that appear as if you are walking through the home is key for selling to out-of-state buyers sight unseen.
Too often, FSBO sellers miss out on a huge market of customers whose only impression of a home is the one they get online.
In addition to photographs, Realtors will help assist sellers with staging and even painting tips to help ensure the largest appeal to the greatest amount of people.
Licensed Realtors have a professional fiduciary duty to their client. Fiduciary duties are legal obligations that require the Realtor act in the best interest of their client. In other words, they must put the best interests of their client first or risk losing their license.
From pricing your home and assisting you stage your home to providing you with information about offers and comps, Realtors work for you by law. So you can rest easy and know your best interest is being taken care of.
Other things to consider
Exposure to legal risks with possibly the largest investment you have, being emotionally involved, being available when a buyer wants to see your home, being able to objectively negotiate (price, inspections and other terms of the sale), weeding out unqualified buyers, and knowing how to keep up with the transaction during the process to make sure it closes.
You don’t know what you don’t know
When a market is strong, that also means it is fast moving. Realtors have access to knowledge not yet commonly known. From the most up-to-date information on lending practices, pricing and market trends to having fantastic contacts for photography and inspections, Realtors simply have more information. They understand the processes of disclosures and hiring a closing attorney and they know the ins and outs of ensuring every bit of paperwork is filled out and filed properly so sellers can receive their check timely and without issues. In addition, in the current market there are unique possibilities that Realtors negotiate often such as sellers being able to ‘rent back’ their home for up to 60 days after closing.
One of the most important decisions a seller can make is how to price their home. There is the obvious pitfall of pricing too low, but most sellers don’t realize that pricing too high can be a costly mistake too. Sellers had a great year last year when they could put a home on the market at any price and it would sell. Those days are over! It’s still a seller’s market, however, there are fewer buyers and they are very savvy. Putting an overpriced home on the market will cause it to sit and eventually sell for less than if it was priced right to begin with.
Lately, in the Raleigh market, the numbers are saying, for the most part, that homes on the market over 10 days will sell for less than full price, even after a price drop. But homes that are priced right will typically get over asking in the first ten days.