Why Realtor vs. FSBO ?

What are the advantages of using a Realtor?


Homes offered For Sale By Owner (FSBO) are not listed in the Multiple Listing Service (MLS). MLS listings are available for public view, without a real estate agent, at Realtor.com, realestatebook.com, the wallstreetjournal.com, yahoorealestate.com, trulia.com, zillow.com, and more than 20 other popularly searched home sites. Homes listed in the MLS are not only seen by buyers but locally searched for by hundreds of Realtors, doing customized searches for their particular buyers. FSBO listings do not receive as much exposure with just a sign in the front yard and a small ad on Craigslist or in the News Gazette. According to the National Association of Realtors, In 2006 12% of sellers successfully sold their house FSBO. Of these 12%, 40% sold their home to someone they already knew. This means that only 7% of all homes sold, successfully sold 'For Sale By Owner' on the open market.
Real Estate Agents generally will not show FSBOs. Typically, Sellers always pay the real estate commissions, totaling usually 6%. This means, that if a Real estate agent is working with a buyer, he is probably only going to show the buyer homes that are listed with another real estate agent who is offering, what is called a “cooperating compensation” which is typically half the commission, or 3%. If an agent is willing to show a FSBO, after securing a commission agreement from their buyers, or the sellers of the FSBO, There is still no Seller representation. This means that the Buyers agent is going to be doing the negotiating for both parties. Not only with the Buyers agent be doing to negotiating, but, most likely the seller will not have the needed disclosures required by law. These forms need initials and signatures, by both buyer and seller.
FSBO sellers usually over price their home. It is easy for a homeowner to think their home is worth more than it is. They often think that their style and décor is what the market will commonly accept, and a lot of time they are wrong, A Realtor will make recommendations regarding repairs and cosmetic improvements. A Realtor will also do necessary research to determine the fair market value of the property. A Realtor will compare listing price to sale price ratios, and market trends to determine if the subject is located in an inclining or declining market. A lot of times, Sellers will keep receipts for all the work they have done to their property. They will add all these receipts up and use this total to derive their list price is. This is not the proper way to price a property. This is called the cost approach to value. The cost approach, more times than not, will not determine the competitive price of a homes.
Buyers will feel intimidated of FSBO listings. Buyers feel intimidated when walking through a home when the owner is present. Buyers will feel shy about expressing their true opinions and discussing their thoughts with a spouse, friend, or their agent, if the seller is listening. Buyers are less inclined to make an offer if they have to negotiate directly with the seller. Buyers fear that their offers will offend sellers, and cause an emotional altercation or disagreement.

FSBO sellers can end up with legal complications. There are extensive disclosure requirements when selling a home. Seller disclosures which require the seller to answer a multi-step check list covering all major components of the property and the condition they are in, a Radon disclosure, disclosing if the sellers are aware of an elevated radon levels in the home.  A lead based paint disclosure is required if the house was built before 1976. This disclosure informs a buyer whether or not the seller is aware of any lead based paint in the property.  Lenders will require these disclosures to be submitted with a written sales contract. Often times a Sellers of a FSBO will fail to ask the potential buyer if they are “pre-approved” with a lender. A buyer and seller can get all the way through the negotiating process before even realizing that the buyers won’t qualify for a home loan. A Realtor makes sure that all buyers are qualified to purchase the property before even stepping foot in the home. Sometimes sellers of FSBOs will forget about, or fail to mention any unpaid liens that might be placed on the property from a plumber, electrician, or contractor for non-payment of work performed on the property. A Realtor is required to research the title of the property to confirm that there is nothing outstanding that might delay or complicate the selling process.  Most FSBO sellers do not know what zoning regulations exist where their property is located. If a potential buyer wants to build an additional garage, or fence in the property for horses, or convert a portion of the house into a hair salon, a seller might highlight the amble space available to do any of these modifications, however, local laws and regulations, or even Home Owner Associations might not allow for them. If a buyer and seller run into one or more of these complications, more times than not, the transaction won’t even close. If it does close, it is usually at less favorable terms.


To Sum it up, Time is money. The most effective and safe way to sell a home is by using a well educated, informed, and professional Realtor. A Realtor has the knowledge and expertise to inform a seller of necessary repairs, and cosmetic work to ensure a home is being markets at its full potential. Only Realtors, who are members of the National Association of Realtors, are committed to treating all buyers and sellers equally and honestly. Realtors adhere to a strict code of ethics, and are expected to maintain a high level of knowledge, dignity, and respect in their marketplace. 85 % of home buyer would use the same Realtor again. Real estate purchases are the single biggest investment in America. Most real estate transactions today exceed $100,000. If you had a $100,000 tax question would you try and figure it out yourself, or would you go and consult a CPA? If you had a $100,000 legal issue, would you use an attorney or attempt to resolve it yourself? No, you would consult a qualified professional who can help you through each step.