Why For Sale By Owner Homes Sell For Less?

In the short run, as a seller, saving the cash by listing your home on your own can seem like a smart idea. Avoiding the real estate commission fee and instead of pocketing the value of your home is something we all like the sound of; however, don’t be fooled by the upfront savings in the short-term. By the end of the process, you’ll have spent a lot more than the commission would have cost you, and even worse, your home will be selling for less than you had originally listed it at.

According to a 2015 report, For Sale by Owners (FSBOs) lost about 16 percent of the sales price with a median selling price of $210,000. Their counterparts, with agent assistance, sold for $249,000. Quite simply: homeowners attempting to sell by themselves don’t have the time to devote to the process, and it is truly a time-consuming process. From the start to the finish, it’s a full-time job, which is why realtors exist in the first place.

Market Age

Additionally, when buyers see a home online with the FSBO label, they run in the other direction. Their realtor is going to tell them to flee the scene since many inconsistencies and legal situations can pop up working with a seller who elected not to use a realtor. As a result, the house stagnates on the market for much longer than intended. The longer a home hangs out on the market, the less it’s worth to a buyer when they come around. They are able to negotiate the price down by arguing that the house isn’t worth its value, or else it would’ve been snatched up by now.

Market Value

Sellers definitely don’t have the time to manage the nonstop process that is selling a listing a home today. Even more pressing, sellers really don’t know the market value for the home. Configured by a variety of things, including the value and wealth of the surrounding community, deciding on an asking price is a calculated concept that requires expert oversight. More times than not, FSBO will list the home lower than what it’s actually worth. Plus, without the realtor by your side through negotiations, you probably don’t have the skills to defend a higher asking price anyway.

In the end, between the time your home sat on the market, as well as an inability to really identify the market value of your home, selling through FSBO will result in a lower price than you could’ve received with an agent.