The Problems With For Sale By Owner

Every Baltimore Realtor® has met people who like the idea of selling their home without using a real estate agent. Who wouldn’t want to save the 6 percent on a home sale? But if that’s all there were to it, why did for-sale-by-owner (FSBO) deals account for only about 7 percent of Baltimore-area home sales last year? (That’s what the National Association of Realtors said in a report they did for the Greater Baltimore Board of Realtors.)

One reason is that Baltimore home sellers aren’t stupid. They know that most buyers will offer a lower price for a for-sale-by-owner (FSBO) house. In fact, nationally, homes sold with the help of a real estate professional in 2006 sold on average for 32 percent more than FSBO sales.

Another reason is that, unless an owner is willing to turn away prospective buyers who are already working with a real estate agent, the owner is still going to pay the buyer’s agent about 3 percent of the sale price.

So where’s the savings to sellers? The fact is, FSBO sellers can easily come away from a home sale with less money in their pockets simply because they didn’t engage a Realtor.

Here are eight more reasons for a seller of Baltimore-area real estate to work with a Realtor:

1. A Realtor knows the market and what people are paying today for homes similar to yours. He or she will work with you to set a competitive asking price for your home. A home priced too high will stay on the market too long. Priced too low and the seller won’t get what he or she could have.
2. Realtors are experts in marketing and negotiation. They focus on showing homes to qualified buyers. They know how to prepare a home, maximize value and provide broader exposure to the market, which are critical to generating multiple bids.
3. Realtors give the seller access to major online marketing resources such as www.realtor.com and other big Web sites that attract buyers. (All listings on Realtor.com must be listed with a real estate professional.) This exposure speeds the buying process by increasing your chances of finding a buyer who matches your needs and isn’t wasting your time just “window-shopping.”
4. Realtors know that the first few weeks of a home’s listing are crucial. They can set things in motion to sell the home as soon as a suitable buyer is located. They help you to close the deal as efficiently as possible.
5. Realtors bring objectivity to the search and negotiation. They act as mediators between the conflicting interests of seller and buyer, aiming to make both parties as satisfied as possible. Realtors understand that a deal has to be a win-win in order for a sale to close.
6. A Realtor can advise you as to which investigations and inspections of your property are needed. He or she can also help you find qualified, responsible professionals to do most of these investigations and provide you with written reports.
7. A Realtor will guide you through the closing process and make sure everything flows smoothly. He or she can assist with negotiating factors, including but not limited to price, financing, terms, date of possession, and often the inclusion or exclusion of repairs and furnishings or equipment. Realtors are skilled in reading contracts and will be sensitive to any fine print that you might dismiss as unimportant.
8. As members of the National Association of Realtors, Realtors must commit to a strict Code of Ethics to protect consumers.

Real estate transactions are complicated and often stressful. Something unexpected almost always pops up. Realtors are skilled at dealing calmly with the complexity of the transaction and at responding quickly to the unexpected. Those and all the other skills and resources of a Realtor can be critically important when most or all of a seller’s assets are on the line.