July 12th, 2018
The Dangers of FSBO
With today’s real estate market conditions and low inventory of homes, some home owners are opting for selling their house on their own without using a licensed real estate agent. Although one might think this would be an easy, quick answer to selling your home, there are several problems along the way that could happen when listing a home for sale by owner. Real estate agents can prove their worth by explaining to sellers that working with an agent saves time, money, liability and hassle.
Real estate transactions are extremely susceptible to fraud and scams. With how much today’s society relies on electronic transactions, it can be dangerous to take on this task on your own. Real estate agents and professional mortgage loan officers have specific rules and safety measures in place to protect everyone involved in the deal. FSBO transactions are most of the time based on trust and hearsay. Without a real estate agent, you’d want to make sure you at least engaged an attorney.
The paperwork involved in real estate transactions has dramatically increased in the past 20+ years, according to Keeping Current Matters. The real estate industry has started to require more disclosures and regulations that non-real estate professionals would not have access to.
Another possible problem during a FSBO transaction, according to Inman, is that all liability will be on that seller. Let’s face it, everyone makes mistakes. A seller, (or buyer), who doesn’t have the correct representation of a licensed agent, pays for those mistakes. Although attorneys can close real estate transactions that lack licensed real estate agents, they don’t carry errors and omissions insurance like real estate firms do.
In 2015, according to the same Inman article, FSBOs lost about 16 percent of the sales price with a median sales price of $210,000. Agent assisted home sales in the same circumstance sold for $249,000 median sales price. Homeowners without the correct education and licensing simply do not know the real estate conditions, home selling process, and market values to price and sell a home at top dollar. Not to mention, FSBOs spend more time on the market with an average of 18 percent of them unable to sell within their chosen time frame last year.
Although real estate market conditions prove that the market is lacking inventory, this doesn’t necessarily mean it will be easy or quick to sell your home on your own. Without having representation from a licensed real estate agent, homeowners are susceptible to fraud, losing money, and simply getting in way above their heads. Thinking about selling your home? Call a license real estate agent to avoid the stress and possible danger of handling the transaction on your own. Need help finding an agent compatible with your current home situation? Our referral services manager, Jordan Nelson, can play match maker and connect you with an agent that will meet your real estate needs.