If you’re planning to sell your home, you’ll need to consider whether you’re listing it yourself or hiring a realtor. Individuals with previous real estate experience may not have any trouble with the selling process. If you choose to use a “for sale by owner” method, you don’t have to pay a realtor’s commission. That means you pocket significantly more of the house’s purchase price when it sells.
But this route isn’t right for everyone. In fact, if you don’t have previous experience with real estate, it’s almost definitely not for you. It’s easy to underestimate how difficult it is to work within the constructs of the realty market.
With an FSBO transaction, the owner is responsible for marketing, showing, and selling the house. There is no realtor involved in the process. If you do go this route, you’ll need to consider multiple practical and legal factors.
This type of transaction also gives you complete control over the process. You can choose exactly what your home looks like, when the showings and open houses are, and when the inspections occur. But there are dozens of tasks you’ll need to complete, and you’ll also need to be comfortable with legal jargon for the contract.
Another potential drawback is that your attachment to your home can make you a non-impartial advertiser. A real estate agent tends to have a better objective idea of your home’s value.
The negotiation process is also challenging if you don’t have background market knowledge. Typically, a buyer will make an offer below the home price, and then the seller will counter until the two reach a mutual agreement. If you don’t have a reliable understanding of your home’s value, it will be borderline impossible to win this negotiation.
With realtors, you get access to someone who knows the market. They understand what needs to be done to sell your home. They also handle all of the scheduling, open house setup, and contract negotiation. This takes almost all of the pressure off of the owner.
The drawback of this is that realtors work on commission. When your home sells, the realtor’s price is a percentage of the final sale. An average realty commission is about 6-percent.