Selling a home can be a stressful process, and it’s important to know how to navigate the process from start to finish. There are often hurdles involved with a real estate transaction, and it takes experience to know how to overcome them. If you’re considering selling your home yourself, here are some things to think about before you make that decision.
While the traditional approach to selling a home involves hiring and paying a real estate agent, some sellers turn to the DIY approach in order to save money: selling “for sale by owner,” without a listing agent. While selling your home yourself will allow you to avoid a listing agent commission, will it really help you walk away from the sale with more money in your pocket? Keep reading to find our guide to understanding the pros and cons of FSBO.
What does FSBO mean?
FSBO stands for “for sale by owner,” and it means exactly that: a home being sold by its owner, with no listing agent involved in the sale.
How For Sale By Owner Works in Asheville & Western NC
Selling a home FSBO in Western North Carolina begins with the initial preparation and pricing of the home. The seller has to clean, stage, and renovate (if necessary), then they’re responsible for choosing the right price for their home – one that fits the local market while remaining competitive and attractive to potential buyers.
The seller is also responsible for writing the home’s description, staging their home and taking photos (or hiring a professional team of stagers and a photographer). After this, the seller will need to advertise their property for sale. Most FSBO owners use social media and yard signs to get the word out, but these tools can be limited in reach. There are websites that allow “by owner” sales, but those website are not often front-of-mind with most real estate buyers.
Once the property is listed, the seller is responsible for coordinating showings and hosting open houses. They’ll be on call for all offers as they come in, potentially having to juggle multiple buyers’ agents at once as they bid on the home. If the property goes “under contract,” the seller will need to negotiate repair requests, ensure they provide marketable and insurable title, and manage the appraisal.
Finally, the seller needs to prepare for closing, completing the necessary paperwork along with the buyer, the buyer’s agent, and a real estate attorney. Selling without an agent means that the seller is responsible for following applicable disclosure laws, showing the home, preparing contract documents, and contract negotiations.
In 2022, only 7% of total home sales in 2022 were FSBO, and the majority of FSBO sellers (57%) knew the buyer of their home, per the National Association of Realtors (NAR). Selling FSBO may work better for people who know their home’s potential buyer – perhaps a friend or family member – and who don’t need to go through the process of marketing and listing.
Pros and Cons of For Sale By Owner in Asheville
Now that you understand the basics of FSBO, it’s important to consider the pros and cons of this method. While there are some notable benefits, there are drawbacks to be aware of as well.
Pros of FSBO
- There’s no need to pay a listing agent’s commission. This is a benefit of selling without a real estate agent. (You’ll most likely still have to pay the buyer agent’s commission though – more on that later). The listing agent typically gets half of the commission on a sale, and the buyer’s agent usually collects the other half, but this is not always the case.
- You’ll have total control of the sale. Every part of the sale, from listing the home to preparing it for sale to contract negotiation to closing, will be in your hands, which is either a comforting reality or an unsettling one.
Cons of FSBO
- You’re likely to make less on the sale. That’s right; even when you factor in a seller’s agent commission, the NAR reported in their 2023 Profile of Home Buyers and Sellers that FSBO homes usually sell for less than homes sold in agent-assisted sales. In fact, NAR notes that, in 2022, FSBO homes sold at a median of $310,000, while agent-assisted homes sold at a median of $405,000.
- Selling a home yourself is a lot of work. It’s like a second job on top of your full-time profession, family responsibilities, and personal life. Prepare to devote a lot, if not all, of your free time to selling FBSO. According to the NAR, when asked about the most difficult tasks of selling FSBO, 16% of sellers polled said choosing the right price, 13% said understanding and performing paperwork, and 10% said selling within the planned length of time.
- You won’t have the expertise and connections of an agent. Real estate agents have the training, experience, and professional network necessary to accurately price, market, and sell homes quickly, You won’t have access to this when selling FSBO.
- You’ll still be responsible for some fees. Selling your home yourself doesn’t mean you’re in the clear when it comes to costs. As shown below, you’ll need to plan for a few notable closing costs.
- Selling or buying a home usually involves a good bit of emotion, so it’s important to be able to approach the entire process from an objective point-of-view. This is not always easy to do when you’re a party to the transaction.
- Selling without an agent can open the seller up to liability. Real estate forms, including contracts, addenda, and disclosure documents, are always changing. Many of these forms are required by state law in North Carolina, whether an agent is involved or not. An experienced real estate agent will have plenty of practice in completing these forms correctly.
- Each real transaction has its own nuances. It takes years of practice to become proficient in all aspects of a real estate sale. Most sellers only sell a few homes in their lifetime, making it almost impossible to become proficient at doing so.
Costs Associated with Choosing to Sell FSBO
Some of the costs you can expect when selling FSBO include, but are not limited to:
Attorney Costs in NC for Selling Your Home
Because you won’t be working with an agent, you should consider hiring a real estate attorney to draw up the final contracts for the closing and assist you with any other legal matters throughout the sale. According to Upnest, a high-quality attorney will charge between $150 and $300 per hour. You aren’t legally required to hire an attorney, but it’s a good idea to do so; unless you have legal experience yourself, you’ll run the risk of making costly mistakes by choosing not to seek legal counsel.
Buyer Agent Commission in NC
As previously mentioned, you’ll likely have to pay the commission for the buyer’s agent at closing, though this isn’t set in stone. There’s no law that requires the seller to pay the buyer’s agent’s commission, but it’s a common practice and many buyers will expect it. In fact, most buyers do not feel comfortable buying a house without a buyer’s agent involved on their behalf.
MLS Listing Costs in Asheville & Western NC
MLS is a database of home listings used by agents and brokers all over the country. It can only be accessed directly by real estate professionals, so if you choose to sell FSBO, you’ll need to pay a third-party listing service to list your home on MLS. These companies charge hundreds (and sometimes thousands) of dollars to simply input your listing in MLS. These listings are often full of errors and misrepresentations, because the company has never visited the home to ensure the data is accurate. Misrepresentation in MLS (whether willful or negligent) can lead to legal problems down the road.
Conclusion and Asheville Real Estate Expert Insights
Selling your home by owner should only be attempted by experienced real estate investors and owners, but even then there will be still be challenges in marketing exposure, staying up to date on legal requirements, and overcoming hurdles to closing. We believe you should only consider a FSBO transaction when the buyer and seller are related or there’s some other arrangement that makes that sale not “arms-length.” There are many challenges that come with choosing the FSBO route. To get the most for your home and to avoid the added stress, we recommend selling with the help of a listing agent. Not only will the majority of the work be off of your shoulders, but you’ll have the insight and area knowledge of an expert who is working hard to sell your home and who is only a call or text away. If you’re planning to sell your home in Asheville or the surrounding area, we can help. The agents at Freestone Properties are locals who know the Asheville housing market inside and out, and our team is ready to help you sell your home. Contact us today – we look forward to hearing from you.
