FSBO vs. Selling Your House with an Agent: The Pros and Cons

FSBOs: The Pros

No Agent Commission

The most obvious advantage of selling FSBO vs REALTOR® is that you don’t pay an agent a commission fee. In most housing markets in the US, the typical real estate commission is 5-6%, split between the seller’s agent and the buyer’s agent. Importantly, this fee is usually covered by the property seller. This means that if you go for the FSBO option, you will make an additional profit of 5-6%. This amount of money is significant for people who are selling their home to replace it with a new house as they can put the saved up money towards the purchase of their new home. This sum is also important for real estate investors whose long-term return will automatically go up if their sale costs go down. This 5-6% of the sale price could be the difference between making a profit and making a loss when selling an investment property.

Being Fully in Charge

When you decide to sell your home with an agent or a broker, you transfer to him/her not only the majority of the responsibilities associated with this task but also most of the decision making. While you have the ultimate say in who the next owner of your property will be, you are generally not very involved in the selling process.

The opposite is true in the case of a FSBO. You, as the property seller, have full control over the process including the marketing of your house for sale, setting the price, the staging, the open houses, the viewings, the communication with interested buyers, the negotiations, and the ultimate sale.

An experienced real estate investor would like to be fully involved in selling his/her investment property as he/she has the necessary skills and knowledge to succeed with the transaction. Moreover, the investor is ready to put all the energy and efforts necessary to sell at the highest possible price as every dollar counts for his/her return. Meanwhile, for an agent this is just another deal.

Knowing Your House Best

Whether you are a homeowner or a property investor, you know your home for sale the best. You’ve lived there or you’ve managed it for a number of years, and you know the ins and outs of it. You are familiar with the most attractive features of your house, and you know how to bring the attention of potential buyers to them. In addition, you are aware of the problems with your property for sale and can somewhat conceal them, without being misguiding. This means that you are the best possible person to market your house during open houses and viewings. This is an important benefit of going for a FSBO vs Realtor.

Working at Your Own Pace

When you sell by yourself, you can move forward in the process at your own pace. Naturally, a real estate agent would be in a hurry to sell your home as soon as possible in order to move to the next deal. This might not be in congruence with your timeline, and it might actually compromise the best possible outcome for you.

FSBOs: The Cons

No Access to MLS Listings

The major drawback of selling as a FSBO is that you, as a regular homeowner, don’t have access to the MLS database. This means that you cannot list your property on this most popular platform for selling and buying homes in the US. Of course, you can have an agent list your property for you on MLS, but you will have to pay a fee for this service, which will eat into your profit. Not having access to the MLS will make marketing your real estate for sale significantly harder. That’s arguably the biggest hurdle of selling your home without a realtor.

No Real Estate Network

Real estate is very much a people’s business. The most important factor for success in the real estate industry is whom you know and who is in your network. Real estate agents and brokers take years to build a solid network of property buyers and sellers as well as other professionals and ordinary people who are of help when they have to sell a house. You, as a homeowner, do not have the luxury of a strong real estate network, which will further complicate your marketing efforts.

If you are a real estate investor with a few years of experience in the business, chances are that you already have a network. This makes an FSBO more feasible for an investor than for a homeowner.

Poorer Negotiation Skills

Unless you work in sales, you probably don’t have much experience negotiating prices. Exactly the opposite is true for agents who survive and thrive in the business just because of their ability to negotiate the best price for their clients. This means that once the time to negotiate the sale price with interested buyers comes, an agent will be able to get you a much better price and terms than you can get on your own. Indeed, the difference between the price you can get and the price an agent can get for your house will usually exceed the 5-6% agent commission on a typical real estate transaction.

Once again, if you selling your investment property and have done that a few times, you might have the necessary negotiation skills and experience to score a good sale price. However, first-time homeowners don’t usually have what it takes to make the most out of their sale.

Taking More Time

Selling as a FSBO vs REALTOR® generally takes more time. After all, real estate agents are professionals who sell properties for a living, and they know how to be efficient. This means that if you are in a hurry to buy a new home or to invest the sale money in a new investment property, you should work with an agent. This will significantly shorten the time your property spends on the market.

Moreover, the number of days on the market has a direct negative impact on the selling price. The longer your home stays listed for sale, the more you will have to drop the price before you find a buyer. Buyers get suspicious about why your home has spent so many days on the market if everything is perfectly fine with it, so they will not be willing to pay the initial asking price.