The Cost of Selling on Your Own
Recently, our team was approached by a home seller who wasn’t interested in working with a Realtor. She was committed to selling for sale by owner (FSBO) instead because she believed it would save her money. However, things didn’t go quite as she planned.
To illustrate the real cost of selling FSBO instead of working with an agent, allow me to share the real numbers from this seller’s experience with you today.
This seller’s home appraised for $148,000, which is how much she ended up listing it for. This was a major mistake. By my analysis, her home was worth at least $160,000 without updates; and, if she would have been willing to make upgrades, her ARV (after-repair value) could have been $195,000. In fact, no recent sales in her neighborhood had closed for less than $190,000. With all of that in mind, it isn’t hard to see that she was leaving a lot of money on the table from the very start by listing her home so low.
Working without an agent doesn’t save you anything. Instead, it can cost you tens of thousands.
My team and I, knowing she would be apprehensive about paying any fees, found her an FHA buyer who was willing to buy the property for a net price of $136,900. This figure took into account the commission he’d be paying us, but the seller’s attorney stepped forward to insist that property be sold as is. When I told the buyer this, I advised him that we should reduce his offer to $133,920 to compensate for any necessary repairs. The attorney sent us a counteroffer of $135,985, which we accepted because it was still below our initial offer. In the end, my buyer walked away with the far better end of the deal. With just 3.5% down, my buyer actually closed with $25,015 (or 15.5%) worth of equity in the home.
That $25,015 came straight out of the seller’s bottom line—something that never would have happened if she had opted to work with an agent. The moral of this story is that working without an agent doesn’t save you anything. Instead, it can cost you tens of thousands.
If you have any other questions or would like more information about your own real estate goals, feel free to give me a call or send me an email. I look forward to hearing from you soon.