Can I Save Money by Selling My House Myself?
Updated: Oct 6, 2020
You may have seen yard signs in your neighborhood that state, "For Sale By Owner." In the real estate business, these are known as FSBOs (pronounced "fizz-boes").
While some FSBOs do ultimately win the day, complete the sale at a fair market value in a reasonable timeframe, and save the owner the Realtor®'s fair commission (for the amount of work involved and the value of experience), these rare examples are often the exception that proves the rule. There's a reason that the "amazing" tale that a bragging relative or neighbor will share about getting more than their asking price the day they put their house up for sale stands out. It so seldom happens. However, the problem is that spectacular and rare occurrences often lodge in our brains and are tagged, "It could happen." Las Vegas is built on this principle!
While they have always been just a small percentage of the overall annual home sales in the U.S., recently this number has shrunk even more. There may be a number of reasons for this, including the obvious reason that during both a pandemic and in the midst of a volatile real estate market, owners are less likely to feel confident that they can accurately determine their home's true market value and they may not want to deal with scheduling and holding an unpredictable number of showings and/or open houses for total strangers.
Not all, but most real estate transactions tend to be logarithmically more complex and challenging than can be predicted. Generally, selling a home is not as simple as the sale of an item like a toaster or even a car. Perhaps this is why many FSBOs end up ultimately giving in and paying a fair commission to a qualified Realtor® after months of lost time, and quite often squandered opportunity. To add insult to injury, most FSBOs that do "succeed" in carrying a deal to completion will often take longer and realize less profit than comparable property sales in similar neighborhoods and markets.
It's entirely possible that you could save money by selling your house by yourself. The question then is, "Is it probable?" As statistics provided by Zillow and the National Association of Realtors® and numerous online articles by reputable sources such as “Time Magazine” or “Forbes” would indicate, maybe.
Can you succeed with your FSBO? If you are a successful and seasoned negotiator, with a firm grasp on the ever-changing variables related to real estate in your neighborhood, and with a significant amount of experience dealing with the wide variety of real estate problems and issues that may arise, maybe. If you have a network of seasoned colleagues to call upon should a unique problem present itself, have a generous amount of time on your hands, and a financial buffer in savings to allow for one or more critical costly errors, that would help. Finally, if you have a strong penchant for DIY projects that involve legal, logistical, financial, administrative, regulatory and overall project coordination knowledge and skills, the answer could be yes.
Like an exhilarating trip to Las Vegas, where some come back happy and most return lighter in the wallet, the ultimate question is twofold; can you afford to gamble, and do you feel lucky?