We all love saving money. Finding coupons online for restaurants, using credit card points for purchases, and seeking out the cheapest gas station in town are all sensible ways to cut corners.
People selling their homes might be tempted to think that another good way to save money is by selling their home on their own. This is called â€œFor Sale By Ownerâ€ or â€œFSBO.â€
The truth is, FSBO real estate transactions typically donâ€™t work, and end up costing the sellers more than if they had gotten professional help to begin with.Â
Here are the top 3 reasons why you should avoid For Sale By Owner when selling your home:
1. Legal dangers
Selling your home is probably one of the biggest financial transactions you will ever make, and the process is fraught with potential legal dangers.
Did you know that FSBOs get sued more than any other group in real estate? A whopping 71 percent of all real estate litigation is a result of one party not being represented in the transaction, like in an FSBO, where the buyer has an agent protecting their best interest while the seller does not.
Also, consider that the paperwork involved with a home sale is extensive, usually 100-150 pages, and it is a legal and binding document.
2. Low success rate
According to statistics, FSBOs have a success rate of about 14 percent. Of that group, 7 percent knew whom they were selling their homes to ahead of time (friend, relative, neighbor, etc.). That means that true FSBOs are successful only about 7 percent of the time.
According to the National Association of Realtors, a real estate agent/realtor can get sellers 10-13 percent more for their home than people trying to sell by themselves. Since Realtors typically only charge 6 percent, the average consumer will make 4-7 percent or more on their home sale if they use the help of a real estate professional instead of trying to do it on their own.