If you are going to sell your home in Midland, Michigan and aren’t sure if you should hire a real estate agent or go commando (For Sale by Owner) you should continue to read.
You have decided to sell your home, and you are plotting a path to get the sale of your home on the way. You know that listing your home with a realtor is not free and will cost a commission. You estimate that your home is worth $250,000 and that the commission to the real estate agent could be $15,000.
So you are considering listing your home For Sale By Owner (FSBO).
Since I am a real Estate Agent, I am obviously biased; but still, hear me out as I will go over the pro and cons of both situations.
Also, I am speaking for myself here. I don’t know what most other real estate agents do, I can just tell you what I do.
First – there is no doubt that today the buyers are online. More than 90% of buyers have looked at homes online and search for homes in the available listings on either the Multiple Listing Services or on several Real Estate Web Sites. Very few buyers drive around a neighborhood to find a home anymore or look in the newspaper. Today driving around the neighborhood or looking in the newspaper is more of a supplemental task for buyers. If you have looked at homes yourself you already know this.
The Pros for FSBO listings and the Cons for a listing with a realtor is essentially the same thing. It’s the money you could save. You could save all or part of the Real Estate commission. Usually the commission between listing agent and buyer’s agent is split 50/50 and if a real estate agent brings a buyer to your home as a FSBO you will still owe commission to the buyer’s agent reducing your potential savings.
Cons for a FSBO listing and Pros for a Listing with Bryan Gardner as your Realtor.
• Many buyers are scared of the buying process. Buyers work with a realtor because they want an expert that understands the process of buying a house and to help them through the process. Those buyers will most likely never look at your FSBO listing. None of the Real Estate Agents that I know in Midland will show a home that is listed by a discount broker or a FSBO listing without being asked by a buyer. • Negotiating the sale. Lets assume you have a potential buyer for your FSBO listing. Do they know how to formally offer to buy your house? Do you? While the process isn’t too complicated for a professional there are steps required prescribed by Michigan Law that need to be followed. Who do you have to negotiate with? What if there is a disagreement? What if your buyers work with a professional (Attorney or Real Estate Agent)? Your sale could be falling apart. I know all of the Real Estate Agents in Midland. I deal with them on a daily basis. I have sold 115 homes as of writing this text. I know all the home inspectors, and I know how to fairly handle disputes in the buying and selling process. Look at my (this) website and look at the multitude of client testimonials. They all liked having me on their side. In 2013 (last year) 88% of my listings sold, just under 50% I sold myself, and the remainder was sold by my colleagues. Compare that with how often a FSBO listing does not sell.
• Mortgage/Appraisal/Title Insurance: Again, there are multiple steps that can make the sale fall apart. Lets assume you have a written offer, and the buyer doesn’t pay cash. When you work with me, I manage the process, weeding out buyers that may not be able to get a mortgage to pay for your home to issues that come up when the home inspector finds something that you or the buyer didn’t expect. Purchasing contracts for homes bind buyers and sellers and typically let buyers out if they can’t get a mortgage. If you have such a buyer, you have just lost 30 days in your sales process. I try to ensure that such a thing doesn’t happen, and if it does, I make sure the time lost is minimal.
• Listing price: A pitfall of a FSBO listing, and a benefit of listing with me is the question of how to price your home. Pricing your home is all about understanding the local real estate market. It isn’t rocket science to price a home correctly, however, an overpriced home decreases showings and minimizes offers. More often than not FSBO listings are not priced correctly. Most times they are overpriced, but sometimes they are underpriced. In both cases the seller loses. An overpriced home will take longer to sell and usually sells for less than it would have if it were priced correctly at the beginning. A home that is on the market for too long because it wasn’t priced right usually nets the seller less than if it had been priced right from the start. • Cost of not Selling: A $250,000 home costs the seller close to $2500 every month it does not sell, even if the mortgage is paid off. Living in the home may mitigate that cost, but the fact remains that if the home does not sell it costs the seller a significant amount of money. My average days on the market in 2013 was 62 days. I have sold homes that were priced right in one day. My colleagues and I at Ayre Rhinehart have sold homes that were about to be listed before they even were openly visible on the Internet. The best homes that are in a good location, and that are priced right sell very quickly.
• For Sale by Owner (FSBO) yard signs don’t work. I have seen many FSBO listings where the owner just stuck a sign in the yard and hoped for buyers to stop by or to call the number on the sign. I have passed FSBO signs with many buyers and without me doing anything the buyers did not even notice that the home was for sale and that it may have been a home they would like.
• FSBO listings are not being looked at by Realtors. When I list a home its going front and center on the Internet. You have seen my face everywhere on the net, so you already know I am well versed in getting in front of buyers and sellers on the Internet. I am on Facebook, I am on Google, I am on foxnews.com, I am on CNN.com and hundreds of other web sites. All my listings are on Trulia and on Zillow in addition to the local MLS. In addition, me, and my colleagues at Ayre-Rhinehart, but also other Real Estate companies start presenting your home to potential buyers even before it is formally listed.
In general I think it isn’t even a fair competition. I have seen FSBO homes sell, but the majority don’t, or they sell after a long time on the market and after several price adjustments. Please consider this – it doesn’t take long for you to spend more money on holding on to a home you have decided to sell but that doesn’t sell, than paying the commission to a Real Estate agent. I am a full time real estate agent. I only make money if I sell a home. I have a plan in place to make that sale happen. Give me a call and lets meet and I can show you how.