Utah’s real estate market has rebounded sharply in the past several years in the aftermath of the recession, with home prices near or even above their highs of 2007 and 2008. A shortage of listings in many communities is resulting in some homes receiving multiple offers, even over the asking price.
In this kind of a “seller’s market” it’s understandable that some homeowners may believe that they should try selling their home on their own to “save” money. However, do-it-yourself sellers (also known as “For Sale By Owner” or “FSBO”) could end up losing money in the long run – and create lots of headaches in the process.
Here are just a few of the reasons why selling your own home rather than letting a professional do it could cost you time and money in the long run:
- You may not save as much as you think – if at all. Homes without professional representation often remain on the market longer and end up selling at a lower price than those marketed by a real estate agent. The National Association of REALTORS® found that the typical FSBO home nationwide sold for an average price of $210,000 as compared to the average price of $249,000 for agent-assisted home sales in 2014 (the most recent figures available).
- Other costs can eat away at any “savings.” While you might save some of the commission cost of a seller’s agent, you may still end up paying 2-3 percent to the buyer’s agent in order to attract a larger pool of buyers. Additionally, the true “savings” may be far less after you add all the other costs associated with selling – advertising, brochures and fliers, for-sale signs, etc.
- Much time and effort go into selling a home. There’s a reason that just 8 percent of sellers sold their own home last year, according to NAR. It’s hard work! Professional real estate agents develop comprehensive marketing plans, take professional photos, arrange inspections and appraisals, oversee staging, hold open houses, place print and online ads, seek out potential buyers and negotiate with buyers’ agents on price and terms. Homeowners need to ask themselves if they really have the time or expertise to do all of that on their own.
- Determining the right listing price is critical. Real estate professionals review comparable sales, local market conditions, as well as the pluses and minuses of your home in helping you set the list price. As an owner, you may not have a clear or objective sense of what that price should be. The right list price may get your home multiple offers or a faster sale depending upon what you want. Setting the list price too high may cause potential buyers to not even look at your home.
- Negotiating against pros. If you try to sell your home on your own, you may end up negotiating with a professional real estate agent working for the buyer whose expertise may cause you to end up selling your home for less money and/or with other contractual terms that may not be in your best interests and could also cost you more in the long run.
- Limiting your pool of buyers. FSBO properties are often not able to utilize as many of the real estate search engines and websites as properties sold by REALTORS®. This is potentially a significant obstacle in an era when more than 90 percent of buyers start their home search on the Internet, according to NAR. Those selling their own home typically cannot leverage the advertising, marketing and networking resources that are needed to reach the potential buyers that agents are reaching every day.
Even in a good market, properly marketing and selling a home is far more complicated than most people suspect. It’s very easy for non-professionals to make costly mistakes. Since the sale of one’s home is often the single biggest financial transaction that most of us will ever make in our lives it is critical that it is handled as expertly as possible. When it comes to selling your home, it truly pays to rely on an experienced real estate professional to help guide you through the process.