Intro -FSBO vs REALTOR

Should you sell your home yourself  “FSBO” or should you use a Realtor or Real estate agent?  I know you guys will says that since I am a Realtor, for sure I will be biased on what I am going to say in this video.  Let’s be open and be honest, in as much as I would highly recommend you using a Realtor when selling your home, this video will provide you an unbiased solution in order to make an informed decision.  I always tell my clients, like I am telling you right now, it is still your FINAL decision, nobody can force you into choosing anything. A disclaimer that this video is for educational and informational purposes only.   So let’s get right on it.

1 – FSBO vs REALTOR

First, what does FSBO mean? From the abbreviation itself, F stands for FOR, S stands for SALE, B stands for BY, and O stands for OWNER, so altogether, it simply means FOR SALE BY OWNER or FISBO for short.

What do you think is the number one factor why sellers are choosing this option?  Obviously to save money! HOW? By not paying a commission to a Realtor. But what does it entail? How do sellers sell the home themselves?

First -preparation is key.  You need to make sure your home is ready to sell. Once you have done everything to make your home market ready, (by the way, I have created a video for that, click the link above for more details in marketing your home, make sure to view that video). The next step is to make sure to price the home correctly. Never overprice your home.  This is one of the common pitfalls or mistake for FSBO’s.  They always overprice the home.  Keep in mind, if you have a loan buyer, the home still needs to be appraised to make sure it meets the lending guidelines. Make sure to do your market research and not rely simply on zillow or zestimates to get the value of your home.  Another thing, you can also do is hire an independent appraiser and pay them to assist you. They are in a better position to provide you with an opinion of value for your home.

2 – FSBO vs REALTOR

Now you got your value, and you marketed the home to potential buyers, then if there is an inquiry, you will have to coordinate and schedule the showing of your homes to potential buyers.  If you are working, then this might be a problem since you need to be at the property to show to “would be” buyers. An advantage is if you have a spouse who stays at home, then that would be an option, as long as you have someone to open the door for them. Or if you or your spouse are not able to show the home because of your work or office hours, then you can do an open house on a weekend.  The only disadvantage here is you are limiting your buyers to certain number of days.  Also another factor here is you will never know if the buyers are really serious in buying a property, looky loos or potential thieves.

To avoid the potential looky loos, make sure to prequalify or pre-approve the buyers before showing your home. In other words, before having them view the property or opening the home for them, and they show you proof that they are pre-approve or pre-qualified from a reputable lender. Make sure that the proof that they show you is legitimate and not a fraudulent one.

3 – FSBO vs REALTOR

Now you found the buyer, the next steps is to handle the negotiation and paperwork.  You can hire a real estate attorney to assist you with the paperwork to make sure everything go as planned. Do not forget to open escrow or coordinate with the title company to make sure title is opened for the property and be mindful of your timelines.

In regards to not paying the agent’s commission, sometimes you cannot avoid this if a potential buyer has representation (meaning they brought their own agent).  Nowadays, buyers are smart in hiring a realtor because they really do not have anything to lose since they know that someone is looking over for their interest and that they are aware that working with a buyer’s agent is FREE because the sellers usually shoulder this part when the home is sold.  With that said, as a FSBO seller, you have to pay the buyer’s agent.  If for instance your home is HOT, multiple offers, then you have the option not to pay the commission and have the buyers pay or shoulder the cost upon closing. Again this will depend on the buyer’s motivation.  As a courtesy and in order to have a wide range of potential buyers, I recommend paying the buyer’s agent.

4 – FSBO vs REALTOR

After which, you also have to agree on a closing date which is acceptable to both parties. Choosing the FSBO option, usually will take a lot of your energy since you are handling the selling part yourself without the use of the realtor,  but you will save in paying the commission (most likely saving the listing side of the commission). Now you have the informational overview on how to sell yourself using FSBO.

How about a using a REALTOR or REAL ESTATE AGENT in selling a home?  What are the advantagesBy the way, there is a difference between a REALTOR vs REAL ESTATE AGENT.  A lot of people use this interchangeably.  Not every real estate agent is a Realtor.  Being a realtor, means they have gone a step further by being a member of the national association of realtors and must adhere to the Article 17 of the code of ethics. Since this is not our topic in this video,   I will post a link on the subscription box as to what Article 17 is all about.

5 – FSBO vs REALTOR

So what does a Realtor do in selling a home? Is it worth paying their commission fees?

First step, is PREPARATION.  They will have you prepare the home by pre-inspection, cleaning and staging.  Again, click the link above for more information about getting your home ready to sell.

It is better to have this all done and addressed ahead of time instead of the negotiation process.  Usually inspection and appraisal are the major hurdles in the sale. Might as well, do it now in the preparation phase.

Also most Realtors hire professional photographers, staging consultant (if needed), etc to make sure the home is show ready.  I am speaking for myself here since I do hire these professionals ahead of time when I showcase a home.

Second – PRICING the home.  Most Realtors use sophisticated tools to provide you a comparative analysis in your home.  They pay for these added tools and they give this report to you as a benefit for free.  You do not have to pay an independent appraisal for getting the value of your home.  A Realtor maybe able to provide you an estimate ballpark, though, you can still hire an independent appraiser if you do not mind spending this additional expense.

6 – FSBO vs REALTOR

Third is PROMOTION – marketing and advertising the home.  I am speaking for myself on how I do my advertising and marketing. Besides sharing it to the Realtor community and to my spheres and business page, as a certified real estate  digital marketer, I advertise and market my listings (whether it is for sale or for lease). From listing it in MLS, syndicating it to top websites, all the way to promoting and advertising in social media (facebook business page and marketplace, instagram, linkedin, youtube, etc. I pay marketing dollars to advertise the listing and target the right buyers.  Buyers find their home online and it is important that your home is out there for the buyers to see.  I make sure to target the right buyers and not just random people.

7 – FSBO vs REALTOR

When using a Realtor, particularly a listing agent, either they can get a buyer directly or a buyer’s agent will be bringing the buyer to your home to show the property.  For me, I do not do dual representation.  If I found a buyer directly, this buyer will be assigned to another Realtor. I only represent you, the seller and only you. If for instance, I am the buyer’s agent, then I only represent the buyer and another agent should represent the seller. This is to avoid any potential problems in the future. As part of my service, I also provide the showing service company and automated lockboxes that provide you notification if in case somebody enters the property while you are out working.

A Realtor should also coordinate and make sure that the potential buyers are preapproved with a lender. Both agents help in this regard.  In addition, during the negotiation process, both agents communicate with each other.  In this way, emotions do not run as high especially if you are selling one of your largest investment in your life.  Sometimes when a seller deals directly with a buyer, you cannot avoid emotions and with agents working on the transaction and negotiating directly through the help of their clients, the stress is passed over to the agents, this is what you are paying for, and that is for the agents to handle the nitty gritty part since the goal of both agents (as much as possible) is to make sure both parties will cross the finish line.

8 -FSBO vs REALTOR

Once we found the right buyers and both parties are under contract, the Realtor’s job is to make sure that title is opened and clear, they communicate with the lender that the buyer’s loan is moving fairly well, and all parties involved are in the same page and most importantly timelines are met and so much more.  The Realtors work behind the scene so that nothing falls thru the cracks.  As long as you work with a Realtor you trust, and who has great reviews, then rest assured, they will do the driving for you, while you are enjoying the ride.

So what do you think?  FSBO or REALTOR? You decide.

By the way, I have my ULTIMATE HOME SELLERS GUIDE available now for download.  Scroll all the way down in my description below to find the link.

If you learned from this video,  give it a thumbs up, subscribe and hit the notification bell to be part of my insider real estate tips and secrets.  Again this is Jennifer Yoingco, you are my priority for anything real estate, serving Houston, Tomball ,Spring and the surrounding cities.  I will see you next Tuesday.  Bye.