3 minute read.
It’s no secret that the Canadian real estate market is still flourishing despite the government-mandated changes implemented in 2016 and record-high listing prices. As a result, we’re seeing more homeowners attempting to sell their homes on their own. This is what’s known in the real estate industry as ‘For Sale by Owner’ or ‘FSBO’; and there are several reasons why you may want to think twice before jumping on this bandwagon.
Here are my top five reasons to NOT FSBO:
1. Exposure to Prospective Buyers
Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?
2. Results Come from the Internet
Where did buyers find the home they actually purchased?
- 51% on the internet
- 34% from a Real Estate Agent
- 9% from a yard sign
- 1% from newspapers
3. There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interest of the buyer
- The buyer’s attorney (in some parts of the country)
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The appraiser if there is a question of value
4. FSBO-ing Has Become More And More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBO-ing has dropped from 19% to 8% over the last 20+ years.
The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.
5. You Net More Money When Using an Agent
Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense, especially in the name of saving a commission.
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.
Real Estate Statistics Courtesy of: Keeping Current Matters