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Thinking about selling without a Realtor?

It seems as though FSBO has been a bit of a hot topic lately – partly out of curiosity and perhaps out of a genuine intent to sell without an agent.   The case for FSBO is usually the same: you save yourself the commission you would have paid to the listing and buyer agents, besides that there usually isn’t more on the positive side.  I’ll attempt to paint a portrait of just how difficult it is to sell a house without an army of agents assisting.

“Army of Agents”

Let me explain what I mean by that.  When you decide to work with a realtor, you’re not just getting one person working to sell your house.  Every agent (in excess of 40,000 licensed agents in Ontario) with access to MLS can now see your listing and if your property description matches what his/her buyer is looking for, that listing will be brought to the buyer’s attention.

Bottom line is every seller working with an agent will indirectly have the assistance of countless other agents who are representing a buyer looking for a house similar to the one you’re selling.  That’s powerful.

Going Solo

FSBO essentially means you’re going to sell the house alone.  The major problem is generating the awareness.  This is possibly the most difficult obstacle to overcome without spending more than you would have working with an agent.

Let’s suppose for a minute that you are willing to put aside $5000 for advertising.  Where would you spend it?  Ads in newspapers/Google/radio/Facebook?  The effectiveness of any of those methods is quite limited.  A listing agent usually spends quite a bit on advertising, so this is not an expense you would usually have.

Statistics show that most owners who go without an agent usually give up after a few months.  Hopefully the owners have not lost too much in advertising by this point.

Selling for Less Than Market Value

At risk of sounding like a broken record, the wider the pool of interested buyers, the more you will sell your house for.  This is why awareness is so critical.

There are other factors at play that will affect value.  A property on the market for a long period is referred to as a stale listing.  These usually provide the buyer with significant negotiating leverage, which when coupled with the expectation of a reduced price since no commission is being paid adds to the downward pressure on price.

There are countless other issues like pricing, understanding documents, clauses, negotiating objectively (it is your own house after all).  I would never tell somebody to not try FSBO, but the challenges are pretty evident.  Without even knowing it, the costs of advertising and lowered selling price could end up being more expensive than just hiring an agent.

If you’re looking for a free, no obligation home evaluation for today’s market place, please contact me immediately.