It’s easy to see why home sellers today would be tempted to sell their homes as a Louisville FSBO, or For Sale By Owner. Doing so means that sellers don’t have to hire real estate agents. It also means that they don’t have to pay those agents their commissions.
Many agents charge a commission of between 5-7 percent of a home’s final sales price whenever they help owners move a home. For a house that sells for $250,000, that 5 percent commission can cost sellers $12,500, and 7% would climb to $17,500.
In a market like today’s in which many homes have lost value, the profits that sellers see are reduced. By eliminating a real estate agent commission, sellers can boost what little profit they can expect to realize in today’s struggling housing market.
But sellers might find that selling on a FSBO basis is more difficult than they thought. In fact, FSBO sellers might find that their real estate agent’s commission is a small price to pay when compared to the hassles of going FSBO.
A smart real estate agent knows the local housing market. Because of this, these savvy agents can best set the asking price of your home. And the right asking price is the key to closing a sale today.
Owners, though, tend to overvalue their properties. They remember what they originally paid for their home and all the improvements they brought to it. Because of this, they typically set an asking price that is on the high end. That’s OK in a hot housing market. But in a sluggish market, setting an asking price that’s too high can lead to a dearth of realistic offers.
Buyers today know that housing values have tumbled. They won’t overpay for homes. If you’ve set your home’s asking price too high for your market, these buyers will simply move on to a lower-priced home in your neighborhood.
Sticking a “For Sale” sign on your front lawn isn’t enough today. You need to market your home in print publications, on Web sites, in the Multiple Listing Service, on real estate web portals like Realtor.com and on blogs.
You can do this on your own, but it takes time and patience. Real estate agents, thanks to the connections they’ve built up, can advertise your homes in a wide range of media. And they can target their marketing efforts to the right buyers for your home. Maybe you’re trying to sell a single-floor ranch home. Your real estate agent might advertise your home on Web sites and blogs devoted to empty nesters in your community.
What happens when you do receive an offer? It’s time to negotiate a better price. And when that’s done? You’ll need to complete the paperwork necessary to officially accept your buyer’s offer.
This can be a complicated and tense time. That’s why real estate agents usually act as buffers during the negotiation process. They’ll work with their clients to develop reasonable counter-offers and do whatever they can to make sure that buyers and sellers can come to an agreement that leaves everyone satisfied. Handling these negotiations as an owner can be difficult. When it’s your own home that is at the center of negotiations, it can be too easy to let emotions take over.