If you have decided to sell your home, you've no doubt pondered over whether to hire a real estate agent or try selling it yourself. There's no law that states you have to hire a real estate agent to sell your home. However, in some states, they do require that you hire a real estate attorney to handle the transfer documents as well as the closing. But the decision whether to use a real estate agent shouldn't be taken lightly. There's so much involved in a real estate transaction and so many things that can and typically do go wrong. Important issues that could land you in a significant amount of legal trouble if not done right. So exactly how do you decide what's best for you?
Here are the pros and cons of a for sale by owner transaction versus using a real estate agent to sell your home.
Pros of a For Sale by Owner Transaction
There are plenty of seemingly good reasons to attempt to sell your home yourself. However, you will probably find that the risks far outweigh the rewards. In fact, according to the National Association of Realtors, 89% of home sellers went through a real estate agent. And out of those who chose the FSBO route, 50% of them sold their home to people they knew.
Some of the reasons people choose the FSBO route:
- No commission fee.
- You are more familiar with your home than anyone else.
- Potential buyers don't have to wait to have their questions answered.
- You can directly handle all negotiations on the spot.
Cons of a For Sale by Owner Transaction
Here is where a for sale by owner transaction gets tricky because there are so many cons that come from doing so. After careful consideration, you might decide there is too much risk in trying to sell your home yourself.
- Accurately pricing your house so you don't lose money.
- Qualifying a buyer.
- Advertising and missing out on the MLS listing a real estate agent has access to.
- Understanding the real estate regulations and contracts, as well as assuming the legal and financial risks.
- The underlying safety factors and dealing with potential scams such as fake buyers scoping your house, taking pictures, stealing your valuables, learning your security system locations, etc.
Pros of Using a Real Estate Agent to Sell Your Home
The real estate agent profession exists for a reason. A real estate agent is thoroughly trained and licensed and therefore has the knowledge and experience to deal with potential issues that come with selling real estate.
- Experienced in how to effectively price your home.
- Have hands-on experience in how to market and sell your home for a quick, top-dollar sale.
- Recognizing and avoiding current scams and fake buyer schemes.
- Thorough knowledge of all real estate regulations, contracts, closing procedures and the legalities that accompany them.
- Access to the MLS system and a range of other marketing and advertising avenues, including networking with all the local real estate agents.
- A real estate agent will handle all the negotiations for you.
Cons of Using a Real Estate Agent to Sell Your Home
There really aren't too many cons when it comes to using a real estate agent to sell your home.
- You will have to pay a commission for the sale of your home.
- There will be a middleman if the buyer is also represented by an agent.
- You will be one of many clients that real estate agent has and will, therefore, have to share their time and attention.
- Extra time will need to be devoted to finding the right real estate agent to sell your home.
For some people, selling their home on a for sale by owner basis might make sense. However, more often than not, most people find they don't have the knowledge or expertise to sell a home and don't want to deal with the legal and safety liabilities that could potentially follow. Therefore, you should take some time to thoroughly research the risks of selling your home yourself. Then you will be able to make an educated decision about which route is best for you.