Hiring A Realtor® vs For Sale By Owner (FSBO): Why To Choose A Real Estate Agent

Home sellers should resist the urge to sell their home themselves and hire a real estate agent instead. When debating the questions of FSBO vs Realtor®, home sellers undervalue the time it takes to sell a home and ignore the cost of mistakes. This post will help you better understand the risk-reward balance and answer the question whether the benefits of hiring a real estate agent outweigh the costs.

What Does for Sale by Owner (FSBO) Mean?

Doing the FSBO is not the latest dance craze on Tik-Tok or a social media challenge. But FSBO-ing definitely takes some skill and is challenging.

FSBO, pronounced fizz-bow, is an acronym meaning for sale by owner. Alternatively, “fizbo” is also sometimes used to describe a property for sale by the owner.

Regardless of the spelling, for sale by owner means exactly what it sounds like. A property that is for sale by owner means the owner has decided to sell the property themselves without the assistance of a real estate agent or a Realtor®.

Benefits of FSBO

1.  FSBOs Benefit by Not Paying Real Estate Commission Fees

The number one factor in the FSBO vs listing with Realtor® question which tempts many sellers is avoiding paying real estate commission fees. Real estate commission fees are typically between 3% and 7% of the property’s selling price. Home sellers can save several thousand to tens of thousands of dollars by not paying real estate commission fees.

2.  Controlling the Process and The Outcomes

Another benefit of selling a property for sale by owner is the seller maintains complete control over the process. Some home sellers just do not want to place their trust with a real estate agent. If having absolute control over the process of selling your home is important to you consider selling your home by owner.

Benefits of Hiring a Real Estate Agent

1.  Real Estate Agents Have S.K.E.E.T and Home Sellers Don’t

The leading benefit of hiring a real estate agent is you get to take advantage of the agent’s professional experience. S.K.E.E.T. is an acronym I learned from my trial advocacy coach during law school. S.K.E.E.T. stands for skills, knowledge, education, experience, and training. Real estate agents are licensed professionals who routinely sell other people’s homes.

2.  Real Estate Agents Can More Effectively Communicate with Homebuyers

Real estate agents are able to more tactfully negotiate with homebuyers. Equally true is real estate agents are more experienced at handling circumstances which require everyone to make an adjustment. Real estate agents can more effectively and communicate to homebuyers why an issue has come up, how it can be handled, and quickly begin setting a new expectation.

3.  Real Estate Agents Are Proactive

Another benefit of hiring a real estate agent is real estate agents will proactively work your home sale. Real estate agents have the ability to assess how an action today will change the future outcome. This will help you make decisions which do not interfere with your future plans.

4. Hiring a Real Estate Agent Takes Less Time Than Running the Transaction Yourself

A benefit of hiring an agent to sell your home is the agent’s and not the home seller’s time spent to get the home sold. As a real estate agent I get calls, texts, and emails and all times of day, seven days a week. There isn’t really an off button on this thing. Selling your home yourself will take up a lot of time. This time can be saved by hiring a real estate agent to do the work for you.

5. Avoiding the Bridge to Nowhere

A benefit of hiring a real estate agent is we can prevent home sellers from accepting an offer that is dead on arrival. From a buyer offering an exorbitant purchase price, to financing situations, to property conditions, and to just about anything else, I can assess an offer and provide the seller with a probability that in its form the offer will make it to the finish line as it is written. Home sellers can’t do this.

There are many rules, guidelines, processes, and procedures when it comes to selling a home. Real estate agents know these, and their expertise will keep you from accepting a dead offer placed at your doorstep.

6. Pricing Your Home Correctly

FSBO home sellers are notoriously bad at putting a price on their home. One of the key benefits of hiring a real estate agent is your home will be priced correctly.  Real estate agents have much more and much more detailed data about comparable homes in your area. Hire a real estate agent so you get your home for sale correctly priced on the first day.

7. Real Estate Agents Can Maximize Your Home’s Online Exposure With the MLS

One of the top reasons to hire a real estate agent is they can more efficiently maximize your home’s exposure on the market. Real estate agents have access to the MLS which stands for multiple listing service. This is the database which feeds all of the real estate websites. This tool is the loudest and best blow horn to alert all homebuyers your home is for sale.

Should I Sell FSBO to Save Money?

Though it is true FSBO home sellers do not pay real estate commission fees there are other costs and fees a FSBO seller will pay when selling a home. Below I have covered some of the common transaction costs you can expect when selling your home by owner.

FSBO Costs

Setting Your Listing Price

FSBO home sellers should use a third party resource to get an accurate listing price for the home they will sell. Home sellers can contact an appraiser to get a home valuation. Or, home sellers could pay a real estate agent to provide a broker price opinion. The costs of either of these will range from $200 to $500.

Negotiating Price With Homebuyers

Homebuyers will know you are selling by owner. Some buyers may offer a lower price and leverage the fact you are not paying a real estate commission fee. Poor negotiating skills on your part could cost you thousands of dollars due to the inability to diffuse this. You need to be prepared to diffuse and negotiate away from buyers taking this approach.

Buyer Specific Costs

The buyer whose offer you accept might cost you more money. First, the buyer might ask for a closing cost credit to offset the amount he needs to bring to closing. Secondly, the buyer might ask for repairs. Though not required, be prepared and know you will need to negotiate away some of these demands. Failing to do so can cause all that money you saved in real estate commission fees to disappear.

Other Unavoidable and Ordinary FSBO Costs When Selling a Home

There are several more expenses which are customary and unavoidable regardless of whether you are selling your home yourself or not. These include:

• Accrued but not yet due property taxes
• Title work charges
• Closing ceremony charges
• Transfer taxes, in applicable areas

How to Save Money When Selling Your Home With a Real Estate Agent or Realtor®

There are several ways home sellers can save money even when hiring a real estate agent to sell your home.

First, negotiate with your real estate agent for a lower commission rate. Home sellers will attractive homes in great condition are in a better position to get a real estate commission fee discount from a real estate agent.

Secondly, understand all of the fees your real estate agent is charging you. Many agents like to slip in an office administrative fee charge. Refuse to pay these add-on fees.

Lastly, learn what strategies the agent uses to avoid buyer associated expenses. This includes buyers asking for closing cost credits, short appraisals, and overly demanding inspection responses.

Real Estate Agent vs FSBO: What to Choose

There are four phases to a home sale, and each phase has its own action items. Let’s review each of these and differences at each step when you hire a real estate agent versus selling your home yourself.

Phase 1 – Preparing The Home for Sale

A real estate agent will advise you on changes to your home to make it more attractive to homebuyers, increase its value, or to avoid costly repair demands from homebuyers. Too often, inexperienced home sellers focus on items which really have no effect on increasing the home’s value or attractiveness.

A real estate agent will put you on the correct trajectory at the beginning saving you time and money. On the other hand, FSBO sellers are more likely to make ineffective improvements.

Phase 2 – Pricing, Preparing Marketing Materials, and Advertising the Home

Marketing materials are important to attracting homebuyers. Real estate agents are more likely to be able to succinctly assemble marketing materials due to having “go-to” resources. FSBO home sellers can find the resources, too, but it will take more time.

Most importantly, real estate agents via the MLS have the ability to get a home posted to hundreds of real estate websites. FSBO home sellers will not have this same access.

Phase 3 – Working With Prospective Buyers

Interested homebuyers will have questions and want to see the home. Real estate agents are available to answer questions, manage showings, collect feedback, and review a submitted offer.

FSBO sellers will need to answer these questions and schedule showings and be present for those. Additionally, not knowing what to do during a showing can negatively affect the buyer’s experience while touring the home. Lastly, failing to fully understand a submitted offer could cause you to either reject it unnecessarily or accept an offer you later wish you wouldn’t have.

Phase 4 – Working the Accepted Offer

Getting a home sold requires one to continuously push the accepted offer towards the closing table. This requires knowing what needs done and when. It also requires one to know how to address the hiccups that can come up.

A real estate agent knows these things due to his or her experience. A FSBO home seller is more likely to spend time going in the wrong direction or letting a deal stall at certain steps. Worse yet, FSBO sellers are more likely to make the wrong decision at a crucial time when a hiccup occurs. This can be either due to the emotions involved or the seller’s inexperience at selling a home.

Listing Your Home for Sale With Quadwalls

The real estate agents at Quadwalls.com can sell your home. Most importantly, we offer some of the lowest real estate commission fees.

Our team of Quadwalls Connected Agents have the skills, knowledge, education, experience, and training to get your home sold correctly, quickly, and with as little interference in your life as possible. Our goal is to sell your home for the highest price, in the shortest period of time, with the least amount of inconvenience to you.

Quadwalls.com offers a full-feature home selling service. Despite our low rates, you will receive everything you would expect from a full-service real estate agent. Feel free to contact us to learn more about our full-feature home selling services.

Conclusion

It is common for home sellers to be tempted by the cost savings of paying real estate commission fees. However, home sellers need to accurately and fairly account for the time, cost of poor marketing and advertising, and expensive mistakes when deciding to sell a home themselves.

Selling a home is more difficult than home sellers realize. There is a reason real estate agents have been around for 100 years and will continue to be into the future. Selling a home is a transaction with many moving parts and reliance on numerous third parties. Experience really does matter when it comes to a positive outcome of a home sale.

Just because you can sell your home yourself doesn’t mean you should.