Why Sellers Don't Save Money When Selling On Their Own

Why Sellers Don’t Save Money by Selling on Their Own.

By Michelle Fradella, Broker - Pinnacle Real Estate Group, Picayune MS

“Why should I use a Realtor?” I know this is a question that many sellers ask themselves. After all, can’t you just do it yourself and “save the commission”?

You could. But let me ask you something . . . How much training do you have in negotiations? You have to put yourself in a buyer’s shoes. A buyer who calls on a For Sale By Owner (FSBO) is expecting to save some money, so they take the commission off the asking price – I mean of course you as a buyer don’t want the seller to keep that fee if there isn’t an agent involved! Now the buyer feels that there is some room for negotiating off of the discounted price, so they make an “offer” on that - Usually another 3-5% off the net price.

Now subtract the cost of all the advertising you will need to do in order to get the word out about your property. You will need to put classified ads in the newspaper (not a cheap venture), and run ads on the internet on “FSBO” websites that make you pay $1500 or more UP FRONT, even if the property doesn’t sell. You’ll need to buy signs for your yard, and try to find as many other ways as possible to let people know your property is for sale.

We are currently in a buyer’s market, which means that buyers now have a huge amount of homes to look at and consider when making a purchase. What makes yours stand out more than all those listed? How is your home going to be in front of all of those people who are working with a realtor, looking for a property like yours? The only way you are going to get it to stand out is to ask for less than market value, so your property is a “better deal” to the buyer.

Now take into consideration all of the relocation buyers, and first-time homebuyers that are either not going to even know your property exists, or are not wanting to deal directly with the seller without having someone there to help them make the right decisions and help them get financing? A relocation buyer doesn’t get the local newspaper, and they certainly don’t have much time when they are here to drive all over creation and happen upon your sign. If you are looking to purchase property in a new area, where would you start to look? . . . www.Realtor.com. Then their relocation coordinator sets them up with a broker in the area they are moving to, and they are off to see properties.

If you have a mortgage on your property, every month that it doesn’t sell takes the money you are paying in interest payments away from your profit. Say your interest each month is $600 (and that is usually on the low side). When you wait 8 months, you have lost another $4,800.

So, if you started out asking $200,000 for your property (hoping that it is priced at market value so you can sell it at least attracts some attention), you then subtract the commission, advertising expenses, and interest payments, not to mention the amount the buyer haggles out of you negotiating the price. How much profit do you have left? And who is there to consult you if something goes wrong with the sale, or the buyer can’t get financing? Do you know what financing opportunities there are for a property like yours? Do you have a plan B for the buyers if they can’t get the loan?

Selling your property on your own might save you paying a commission, but it will also keep you from walking away with as much as you would have if you’d had an experienced, licensed, full-time professional do it for you.