Greenwich real estate agents who happened upon last week’s Wall Street Journal feature may have been jolted by the headline, “How to Sell Your Home Without a Real-Estate Agent.” Why would the Journal—one of the most sophisticated observers of today’s business realities—possibly want to lead readers down the FSBO (For Sale by Owner) path? Don’t actual market results point to the opposite approach?
As it turned out, the shock turned out to be only headline deep. What seemed to be a how-to for homeowners intent on doing without the services of a Realtor® quickly proved to be the opposite. Greenwich readers who read on discovered the article was more like a how-not-to advisory for Greenwich sellers. Among the key points:
• Only 8% of all homes marketed last year were FSBOs.
• Real estate agents know best how to make the most of their huge selling edge: the cooperative use of the Multiple Listing Service: “Without use of the MLS, solo sellers have a tough time marketing their homes.”
• If FSBO sellers shell out for a service that lets them list in the MLS, any advantage is halved because they have to agree to pay the selling agent’s commission, typically 2.5% in Greenwich.
• Lacking the resources of professional offices, “another hurdle is ensuring that a buyer has sufficient cash” to pay for a house.
• Even if they build a website for their property, FSBOs face an uphill battle when it comes to effective use of search engine optimization and social media tools.
• The coup de grace is the bottom line. In 2017, even after factoring the commission, agent-assisted sales netted a median $45,000 more!
I have been brought in to deals to represent buyers (acting as the buyers agent) when there is an FSBO. I can tell you first-hand, that from negotiation to inspection process, not having an agent on the other side of the transaction has been difficult on a number of levels, and probably not saved the sellers any dollars in the long run. The bottom line is that negotiating is an art, and knowing how to get through hurdles and surprises that undoubtedly come up during the sales process is something that a skilled agent can get sellers through and preserve the deal.
Since most FSBOs hope to avoid paying “the typical 5% commission,” it’s not surprising that, as one self-help service admitted, 70% of sellers who started out as FSBOs “ultimately hired a full-service real-estate agent to sell the house.”
So why did the Journal choose that headline for an article that goes into such detail about the pitfalls of selling your home yourself? It’s anyone’s guess—but I’d go with shock value. For the 92% of sellers who decide to hire a professional, it certainly would get attention. Speaking as one of Greenwich’s experienced real estate agents, I’m pleased that they did: it showcased many excellent reasons to use professionals.