FSBO vs REALTOR®: Why REALTOR® Always Wins

by Sundaybell on October 14, 2011


Which is the better way to sell your home: through a REALTOR® or doing it yourself by using a for-sale-by-owner company (FSBO for short)? There are good arguments for both, but a comparative analysis shows that working with a REALTOR® is easily the better option.

REALTORS are always the better option

5 Reasons why REALTOR® beats FSBO:

1. More money
2. Better marketing
3. Buyer screening
4. Skilled negotiation
5. Proper documentation (paperwork)

1. MAKE MORE MONEY

REALTOR®: on average, REALTOR®-sold homes went for $60,000 more than their FSBO counterparts.

FSBO: not knowing how to price property is the major reason for FSBO failures. In most cases, FSBO homes are badly overpriced, resulting in a lack of buyer interest.

2. QUICKER SALE DUE TO PROFESSIONAL NETWORKING

REALTOR®: through networking with other real estate professionals, a REALTOR® is able to market your home to a larger number of buyers. In fact, more than 50% of home sales are cooperative sales, where the buyer is brought in by another real estate professional.

FSBO: FSBOs attempt to market directly to the public, but because they don’t have the same marketing power as REALTORS®, their exposure is limited. Furthermore, many real estate professionals won’t even bother showing clients a FSBO property.

TOP 2 ON LIST OF MOST DIFFICULT TASKS FOR FSBO SELLERS:

  • Getting the right price
  • Preparing/fixing up home for sale:

3. SCREENING FOR QUALIFIED BUYERS

REALTOR®: REALTORS® can pre-qualify buyers, so that you’re only dealing with serious people who have the financial resources to buy your home. Furthermore, they protect your privacy by controlling who has access to your property.

FSBO: by not having the same knowledge, resources and information as a REALTOR®, FSBO sellers are hard-pressed to know if a buyer is legitimate or not. This could be especially relevant during an open house, when nearly anyone can enter the home.

4. NEGOTIATING SKILLS

REALTOR®: REALTORS® are well equipped to handle the complex negotiations involved with any property sale. They will protect your interests while negotiating for a quick and profitable sale.

FSBO: knowing there’s no REALTOR® involved, buyers will negotiate aggressively for a low price, something that many FSBO sellers are unprepared for. In addition, most buyer negotiation will be through their REALTOR®, who can take advantage of a FSBO seller’s lack of knowledge and experience to secure a better deal for their client.

Not knowing how to negotiate and the inability to answer common questions are among the many reasons why nearly 90% of FSBOs fail to sell.
TOP 2 ON LIST OF FSBO METHODS USED TO MARKET A HOME:

  • Yard sign
  • Friends/neighbors

REALTORS rely upon more than just signs!

5. DOCUMENTATION AND PAPERWORK

REALTOR®: closing a sale involves lots of contracts and documents, which if not properly completed or filed, could invalidate your sale, land you in court or cost you thousands of dollars in penalties and fees. A REALTOR® is familiar with all the paperwork and will ensure the proper documentation is in place for the sale to go through hassle-free.

FSBO: many FSBO sales fall apart at the last minute due to incorrect or missing documentation. Not only that, but many FSBO sellers who manage to sell their homes find themselves in legal trouble later on because of either incomplete or wrong documentation. Ignorance of the law is no excuse!

NUMBER 5 ON LIST OF MOST DIFFICULT TASKS FOR FSBO SELLERS: Understanding and performing paperwork

The truth is, selling your home just isn’t that easy…

Tell us if you if you see things differently or just think that we’re wrong!


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