Realtor® vs. FSBO—Which is the Best Way to Sell My Home?

This is a major question that home sellers must ask themselves? Do they want to hire a real estate agent (a licensed Realtor®) or sell their house on their own. There are some pros and cons to going “For Sale By Owner” (aka “FSBO”). And, there are some advantages and disadvantages of hiring a Realtor®. Plus, there may be one more solution you haven’t yet considered.

Let’s walk through the basics of each home selling approach…

Hiring a Realtor®

This is the “traditional” way to sell a house. You hire a licensed—and hopefully knowledgeable—real estate agent to help manage the important home selling steps that need to be taken. You pay them (and their broker) a fee for their services. It is usually a set percentage of the final home sale price. The payment won’t come directly out of your pocket, but it will be deducted during the closing stage along with any other closing costs you are paying. The fact that the payment is made this way makes it a little easier to swallow.

A really good real estate agent can potentially pay for his or herself by bringing you a higher selling price. They have experience in staging and marketing properties. They know where to advertise it and how to show it to attract more buyers. They can also help with reviewing offers, as well as negotiating the final price and other important contractual details.

The main drawbacks of working with a Realtor® are time and cost. You will have to spend some time getting the house ready for the market and then go through showings, offers and negotiations. The closing process may also be slower, depending on the complexity of the sales contract and the buyer’s financing. As far as cost goes, you may be paying some money out of pocket to make repairs, and of course, you will be paying the agent’s commission at the end of the transaction.

For Sale By Owner (FSBO)

Selling your house by yourself can be a risky proposition. It’s not a bad idea when the real estate market is red hot and houses are moving quickly. It can be more difficult during a slower market period. You may still want to invest some time and money getting the house ready for sale. Then, you might have to spend some money to advertise the property in local publications or listing websites.

Where you can save a lot of money with a FSBO home sale is by not paying the Realtor® commissions. These can add up to 3-6% of the final selling price. However, research shows that (in average real estate market conditions), FSBO home sales generally take a little longer and draw lower selling prices than traditional home sales through a real estate agent. Still, the trade-offs may be worth it and the savings could be there if you do things well.

Selling a house on your own can be intimidating. Do your research and be prepared to do some work if you want to avoid making a bad deal.

Cash Home Sale

The last alternative to consider is a fast and easy cash home sale. There are many real estate investors—and investment companies like PropertyLark—out there ready and willing to buy your house for cash. They are looking to make an investment in the property. They might want to make renovations and “flip” it to another buyer. Or, they want to hold onto it as a rental unit.

On the positive side, a cash home sale can be completed very quickly (weeks rather than months) and there will generally be zero out-of-pocket costs for you. Most cash buyers are willing to pay closing costs and they will buy your property in as-is condition. You don’t need to worry about making repairs/upgrades or getting the house ready for market.

On the negative side, a cash home sale will typically bring a lower selling price. The cash buyer will make you an offer and you can decide if it is acceptable. A slightly lower price may be worth it overall if it saves you out-of-pocket expenses, Realtor® commissions and a lot of time. Some home sellers aren’t in a position to wait several months for their house to sell on the open market. A cash transaction can be closed very quickly and you can move on with your life.

Which is the Best Way to Sell My House?

In addition, you have to think about the ongoing homeownership costs that you will still be paying over the months it takes to sell your house with a FSBO or real estate agent sale. We’re talking about mortgage payments, homeowner’s insurance, property taxes, utilities, HOA dues and other expenses that can add up over several months.

The point is you need to explore all your home selling options and find the solution that is best for you and your financial situation. All homeowners are different and each home sale is unique. If you would like a fast and fair cash offer from PropertyLark, please fill out the contact form on the right and we’ll get back to you within 24 hours. We can also help you with other more traditional home selling solutions if a cash deal isn’t right for you.