So you are thinking of playing Real Estate Agent and sell your house on your own to save a few extra bucks? There are things you should be aware of before you decide to go this route.
For Sale by Owner, commonly known as FSBO (pronounced as 'fizbo'), is the process of selling real estate without the representation of a Realtor. In this case, homeowners may employ the services of listing companies such as Welist or Comfree to market their listing or do it on their own through websites such as Kijiji and Craigslist, and represent themselves along with the help of a lawyer. The main reason for homeowners to choose this path is to save the commission costs paid to the selling Realtor, which typically is 7% on the first $100,000 and 3% on the balance of the sale price.
A recent survey showed that the average sell price for a house sold by FSBO was almost 25% less than one sold by a Realtor. The typical sell price by FSBO was $174,900 compared to those sold by an Agent at $215,000. Studies have shown that people are more likely to choose FSBO in markets with lower price points.
The same survey found that 89% of buyers purchased their home through a real estate agent and 90% search online during their home buying process. Only 28% of buyers look in newspaper ads for listings. There are plenty of websites that offer free MLS listing searches such as Realtor.ca and real estate agents' personal websites. When buyers are working with a Realtor, they have the benefit of getting the inside scoop of listings even before they come on the market and the ease of automatic notifications as soon as a listing is submitted by the Agent. Another benefit of working with a Realtor is the use of his/her personal website for MLS listings searches. The advantage to this versus Realtor.ca are two days - meaning it can take Realtor.ca up to two days for updates such as new listings and price changes. By this time, the buyer could've missed out on a great new listing!
Over the past 20 years, the percentage of homes selling through FSBO has decreased by 10%. In 1991, 19% of homes sold by FSBO compared to only 9% in 2012. This means that more and more people are realizing the value of a Realtor. Realtors are constantly trained and educated on the market conditions and how to get the highest dollar for your investment. In most cases, when buyers choose to purchase without a Realtor, they are either looking for a deal or they are not serious. Are you equipped to handle a private real estate transaction yourself and can you remain unattached throughout the entire process? When you have a Realtor working with you, he is a neutral party and can offer you advice based on his knowledge of the real estate market alone and not be effected by emotions. Visit our website at www.powerrealty.ca for more tips and view profiles on our award-winning Real Estate Agents!
Sources: NAR, Google