Are you thinking about selling your home in the near future? While the majority of people choose to hire a real estate agent when selling their home, there are many others who decide to sell their house themselves. When homeowners decide to sell their own home, it is called an FSBO (For Sale By Owner). Most commonly sellers will attempt an FSBO sale in an effort to save the 5-6% commission price tag that is attached to hiring a realtor.
However, there are many other considerations that should be taken into account before you decide to sell your own home. Below we talk about some of the main differences between selling your own home and hiring a real estate agent to do it for you.
1. Determining the Right Price For Your Home
Determining the right price for your home is often one of the hardest parts of selling. There are many different considerations that go into the price such as condition, features, age, neighbourhood, yard, and of course the local real estate market.
The number one reason that houses don’t sell is due to them being overpriced. Overpriced homes will sit on the market longer and when they do, they ward off potential buyers as it gives the impression there could be something undesirable with the house.
Meanwhile, underpricing your home can lead to thousands of dollars being left on the table (usually more than enough to cover a real estate fee). Determining the right price for your home requires a lot of knowledge about the local real estate market and buyer demands. Sellers are able to see what the listing price is of similar homes in the neighbourhood but are unable to see the actual selling price of these homes.
Experienced real estate professionals will have access to selling prices of comparable homes and insights into the market and its changes. They will be able to price your home competitively and get your home sold fast.
According to the National Association of Realtors, 8% of home sales in 2018 were FSBOs. Of this 8%, the average FSBO home sold for $217,900 compared to $295,000 for agent-assisted home sales. That means that hiring a real estate agent can on average get you up to 26% more money out of the sale of your home! More than enough to cover the cost of hiring professional help.
2. Preparing Your Home for Sale
Many homeowners have a unique attachment to their homes that makes it difficult to see imperfections and flaws that are obvious to newcomers. While many sellers are aware of the importance of decluttering, deep-cleaning, freshening up, and staging their home, they may not realize how difficult it can be to execute these tasks to the standards that most buyers expect.
Staging, in particular, is one of the most critical steps of getting your house ready for the market, it can significantly impact a buyer’s perception and ultimately the sale price of your home. Staging may seem simple, but getting it just right requires skill and knowledge of the local market.
A real estate agent has a fresh perspective and can provide expert recommendations about value-added repairs and renovations along with informing you about ones that are not worth making.
In addition, realtors often offer initial staging consultations as a part of their fees and furthermore are able to connect clients with reputable staging services. Although staging services will typically come at an additional cost to the client, it can help get your house in it’s best shape, attract buyers, and ultimately result in receiving top dollar for your home. According to the National Association of Realtors, in 2018, FSBO sellers found that the most difficult task of selling their home was in fact preparing and fixing up the home.
3. Marketing Your Home
Marketing your home is the number one way to drive traffic and stir up buyer interest. More interest in your property leads to more offers, and often a higher selling price. One of the biggest ways to catch a buyers’ attention is with professional real estate photography and videography, which would come at a cost to the seller. The average price for professional real estate photography can range from $100-$500, not including a video.
Over and above obtaining proper pictures, you have to have a solid plan for marketing your home in order to gain visibility from potential buyers. There are many different ways to market a home such as social media, local newspapers, real estate websites, etc. However, they all come with a price tag.
The biggest tool for listing homes in Canada is the MLS® listing directory (most popularly Realtor.ca) but only registered REALTOR® members are able to submit listings. However, private sellers are still able to purchase a flat fee MLS® listing and post their FSBO listing on MLS® for more traction. Although these fees can add up quickly as they tend to vary based on location and the company, they also often include additional service charges.
It is important to note that despite having an MLS® listing, since most buyers work with real estate agents to find their homes and real estate agents make a living solely off of commissions, you’re not likely to attract many buyers without committing to paying the buyer agent’s commission. A buyer’s agent commission is typically half (2.5-3%) of the full service commission pricing of 5-6%.
When you hire a real estate agent, you will get professional photography and high-level marketing skills included in the commission fee. In addition, a realtor’s marketing ability is far beyond the reach of your typical listing solutions. Real estate agents have large networks of qualified buyers and direct connections with their clients, other agents, and other agencies.
4. Showing Your Home
If you are planning to sell your own home, it is important that you understand the time commitment that is required. Selling a home is a full-time job and you will be responsible for answering calls, emails, texts, and any other inquiries that buyers may have about the details of your home.
You will also be responsible for scheduling showings and making yourself available. If you are unable to show your home at the buyers’ convenience it can quickly cause them to lose interest in your home.
If you hire a real estate agent, you can rest easy knowing that all of the showing appointments will be scheduled and handled for you. This not only gives potential buyers more flexibility but will make them feel more comfortable exploring your home as it is generally recommended that sellers are not present during showings.
Not to mention, a realtor will ensure that any potential buyer is a qualified buyer by asking important qualifying questions. This will ensure that the appointments are reserved for potential buyers, rather than unqualified and curious shoppers.
5. Negotiating Offers & Finalizing the Sale
Paperwork is an inevitable part of selling your home. It includes things such as buyer and seller information, property details, purchase price, deposit details, included/excluded fixtures and other possessions, closing agreements, and other conditions and clauses. This paperwork has to be completed by an expert (at a cost) in order to avoid any legal liabilities and other issues with the sale.
In addition, the negotiation is an important part of the offer process and will result in the final sale price of your home. If you are not an experienced negotiator, there will almost certainly be money left on the table.
Real estate agents are experts in the local real estate market and understand what is driving buyer demands. They are professional negotiators who will ensure that no stone is left unturned during the negotiation process, helping you get top dollar for your home. A good real estate agent can often negotiate more than enough money to cover the cost of their own commission and ultimately help you put more money in your pocket.
Furthermore, real estate agents are skilled with offer contracts and will often work closely with and be able to recommend a reputable real estate lawyer for the finalization of your sale.
While selling your own home is definitely possible, it requires a large commitment of both time and money from the seller. In most cases, FSBO sales result in missed opportunities for a higher sale price and a faster sale. Hiring an experienced real estate agent will not only simplify the selling process but will on average increase the selling price of your home.
Need A Realtor in the Niagara Region? Call Davids & DeLaat Today!
Are you looking to sell your home in the Niagara Region? Here at Davids and DeLaat, we have a team of experienced real estate professionals that are dedicated to getting you the best value out of your home. Visit us today to find out what makes us the #1 performing real estate team in the Niagara Region!