When it comes time to sell your home, you might be considering a ‘for sale by owner’ or FSBO approach.
On the surface, this method may seem enticing, however, there is a lot that goes into the sale of a home. It’s important you are aware of what is involved to sell a home before making a decision to go it alone.
Saving the commission
The biggest reason people tackle home sales independently is to save money. If you choose to sell your home with the help of a real estate professional, you will be paying a commission for the services rendered. As an FSBO your objective is to save this money. Let’s discuss if this is worth your time and energy.
There is no standard commission structure in BC, but the average commission ranges between 5% and 8% on the first $100,000 and 2.5% and 3% on the balance plus GST. Some rates, depending on property type, will charge a percentage across the whole price.
Knowing how to price your home
When it comes time to list your home, you will need to decide on a list price. Without informed knowledge of the state of the market, this could be difficult. If you are already very knowledgeable about how to price your home, and how the current market is performing, then going down the FSBO route might be an option.
Working with a real estate professional will give you data and information that will help you choose a price based on the current comparables and market conditions. Pricing your home correctly is vital to achieving the best price.
Underpricing your home is obviously not the best option unless you are in a very competitive market and can handle multiple offer scenarios to achieve an above-asking price offer.
Overpricing can leave you with no appointments to view and the days on the market extend past the average time to sell. This could impact the overall sale price, as homes that have been on the market for a long time can be a red flag for potential buyers to offer well below the asking price.
This competitive insight will also give you an indication of whether it’s the right time to sell for your situation. Your real estate professional will educate you on a realistic selling price and if it isn’t what you were hoping for, then you could decide to delay the process or do some upgrades to increase value.
Working with a real estate professional also means that they can monitor a change in the market and alert you when it is a good time to list.
This, again, requires industry knowledge and experience that can take years to build. A real estate professional is working in the field on a daily basis so will have first-hand experience on what is trending in the market being on top of market conditions, stats and inventory levels.
Getting it in ready-to-list condition
You also need to get your home into “sell-ready” condition, which can help you get a higher selling price. This is a key step, as there are many factors in making a home saleable. Some minor staging or repairs may be required to attract a qualified buyer. Your agent can walk through your home and give some simple tips to help maximize your price.
The buyer will likely require a home inspection as part of the conditions of the contract. If there is something wrong that you may not have been aware of, the deal could collapse and you will need to start over. This is something your agent can possibly address before you even put up the for sale sign, which means you can put your mind at ease for the rest of the time.
Knowing how to negotiate offers
Part of selling your home means managing the offers from potential buyers. Working with an agent provides you with advice on the terms and conditions that work best for your situation. As an FSBO this process would be navigated on your own. If you understand contract law this will be manageable.
For example, there can be a multitude of “subjects” (conditions that must be met in order for the deal to be official) in a buyer’s offer that are not in your favour.
Does it make good business sense to wait for another offer or to counter the existing offer with more favourable terms? Depending on market conditions a buyer is usually going to offer below the asking price. There are strategic ways to manage this correctly depending on many factors.
Trying to navigate this step on your own can be challenging unless you are well versed in the skills of negotiating.
The time commitment
Selling your home can be a full-time job. As an FSBO you are responsible for the marketing of your home, staging it, running the open houses and private showings, and the negotiations, just to name a few. It is important to determine if you do have the time in your day-to-day to tackle it.
Navigating legal documents
There are many legal documents required to ensure the sale is properly executed. This can be one of the most difficult steps, as it means learning a whole new language of real estate jargon, which your agent is already fluent in.
As an FSBO you may want to consider having a lawyer review the documents to make sure the contract is legally binding. There will be a cost associated with this.
A real estate professional can help manage the legal documents and also the closing process to make sure the sale completes. There can be some troubleshooting involved that a real estate professional can handle easily. Lack of experience can be very detrimental, so if you choose the FSBO route, ensure you feel confident to handle the unknowns that may arise.
Want to know if working with a real estate professional is right for you?
If you are still on the fence, you are invited to get in touch with Michele Laurent to learn more. She will guide you through the process and give you honest insight into what you can expect, regardless of what you choose. To get in touch, email Michele at info@michelelaurent.ca or give her a call at 604-312-1266.
Meet Michele
With over 25 years of experience, Michele has been a consistent, top-performing realtor with 16 years of Medallion Club status; top 10% of the industry in Greater Vancouver.
Her clients can be confident in her knowledge, professionalism and efficient approach to the buying and selling process. The majority of her business comes from referrals from satisfied clients. Michele is an expert at valuing properties, negotiating with finesse, and getting to know what works best for each individual client.