If you’re thinking of selling your house, you may be wondering whether it’s better to use a real estate agent or go the “For Sale by Owner” or “FSBO” route. Each choice has its pros and cons. Ultimately, 89 percent of home sellers choose to enlist the help of an agent when putting their home on the market.
Although you are not legally required to sell with a real estate agent in any state, 22 states (including New York and New Jersey) require a real estate attorney to close a sale. These specialized attorneys ensure that all paperwork and documentation is completed in compliance with state law. If you choose FSBO, make sure you’re up to date on your state’s real estate laws.
Advantages of For Sale by Owner
Approximately 11 percent of homeowners choose For Sale by Owner, or FSBO, but these sales only accounted for eight percent of total home sales in 2014. This means that about 27 percent of sellers who go it alone aren’t able to close. The primary reason sellers give for choosing to sell the home themselves is that they don’t want to pay the agent’s commission. That brokerage fee is, on average, six percent of the final sale price. That means if you sell the home for $200,000, you net $188,000 and the agent gets $12,000. While it can seem like you’ll maximize your profits by “saving” that six percent, there are a lot of other factors to include in your calculations. You may find that FSBO can cost you more than that six percent.
Advantages of Selling with an Agent
There are considerable benefits to selling with an agent. Realtors have access to knowledge and resources that the average homeowner does not, and statistically, a real estate agent will get you a better price than FSBO. The median sale price for a FSBO home in 2014 was $210,000, while the median for homes sold by an agent was $249,000.
Homeowners who sold by themselves reported that some of their biggest challenges were:
Selling within the time frame they’d set for themselves
Understanding and completing all the paperwork
Setting the right price
Having enough time to do everything required for the sale
Agents earn their commission by putting in the time and effort to get you the best price possible, often within a much shorter time frame than a FSBO sale. Most real estate agents have years of experience navigating the ins and outs of sales, and paperwork that can seem overwhelming to a first-time seller is old hat to an agent. They have detailed information about the current state of the local market, so they can pinpoint the best list price for your property. Additionally, agents are an objective eye to spot areas that need upgrades, repairs, or staging, whereas owners are often blinded to their houses’ flaws because of their emotional investment in the home.
If you’re considering selling your house in the near future, talk to a real estate professional to decide whether FSBO or an agent is right for you. Call Diane Beckmann at 845-709-4758 to find out how a seasoned real estate agent can assist you with the selling process.