TO FSBO or NOT
Claudia Coronado • April 14, 2021
These days everyone thinks selling their property is easy enough. Homes are flying off the shelf right??
Don’t Sell on Your Own Just Because It’s a Sellers’ Market
In a sellers’ market, some homeowners might be tempted to try to sell their house on their own (known as For Sale By Owner, or FSBO) instead of working with a trusted real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market as an opportunity to FSBO. Let’s unpack why that’s a big mistake and may actually cost you more in the long run.
According to the Profile of Home Buyers and Sellers published by the National Association of Realtors (NAR), 41% of homeowners who tried to sell their house as a FSBO did so to avoid paying a commission or fee. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of an agent.
The NAR report explains:
“FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000...Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”
When the seller knew the buyer, that amount was even lower, coming in at $176,700 (See graph below):
that's a lot of money to risk losing when you FSBO – far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s market, it’s still crucial to have the support of an expert to guide you through the process. Real estate professionals are trained negotiators with a ton of housing market insights that average homeowners may never have. An agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal when you do.
Bottom Line
If you’re ready to sell your house this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable and experienced real estate agent. Let’s connect to discuss how we can help you, especially in today’s market.
the information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Everyone's situation is different. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision.
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Hello Neighbors, Are you looking to move soon and not sure whether you should rent or buy your next home? It can be hard to know what the right move for you might be. Sometimes people are in a rush to buy because they feel like it’s what they are supposed to do. Others don’t feel like “wasting” money on rent every month. When it comes down to it sometimes people are in a certain phase of their lives where renting is just what makes the most sense. Here are some situations that can help you decide if you should buy or rent your next home. When to rent: If you’re just starting out and still learning to become financially independent. Maybe you’re a college student and would prefer to live off campus. Renting a small apartment nearby would probably be a good idea. It can allow you to gain some financial independence and learn how to manage your money. Renting can also allow you to understand what monthly costs will look like. Another reason to consider renting is if your job involves a lot of travel, moving or your job isn’t permanent. We have a number of tenants who move to LA from out of state or even out of the country for work purposes. For them renting a small home for the time being is what makes sense and might be what works for you too. When to buy: If you are financially ready. This is THE MOST important thing to consider. You may be ready to buy a home, but if your finances aren’t in order you may have to hold off. You know you’re financially ready if you have at least 15% saved for a down payment. You will also need additional money saved for any new furniture or renovations you may need or want. Aside from having the money save up, if you have a steady job and you’re looking to stay in the area for the long term buying your next home may be the way to go. Buying a home is a big commitment and you should be sure you’re 100% ready before you jump into it. You should be prepared to live in the same home/area for the next few years. If you’re still not sure what move is best for you give us a call and let us help you decide. When it comes down to it, whether you’re looking to rent or buy, at CIC Properties we’re here to help.
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