What Are the Cons of a Sale by Owner?

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Selling your own home requires emotional detachment and marketing savvy.
Selling your own home requires emotional detachment and marketing savvy. (Image: Jupiterimages/Comstock/Getty Images)

The hope of saving money lures homeowners to forgo using a broker. With the average broker's commission at 6 percent in the United States, owners can save thousands of dollars by bypassing real estate agents. In one Stanford University case study, having an agent did not significantly influence the selling price or asking price. But before you begin marketing your home, consider the challenges of selling FSBO (for sale by owner).

Emotional Attachment

Homeowners tend to believe that their home is better than the average home. Seeing your home for what it is -- both the pluses and minuses -- requires objectivity. In order to set a fair price, you must be willing to price it at market value. Price your home too high, and it will linger on the market. An agent can advocate for your home while remaining less biased about the price.

Buyers Expect a Deal

If you’re selling your home without an agent, buyers realize that you’re saving the commission. They may make lower offers as a result. According to the National Association of Realtors, unrepresented homeowners sold their homes for $92 per square foot in 2008. Agent-assisted owners sold their homes for $116 per square foot, on average. During a down market, buyers bargain aggressively with FSBO sellers, while pushy tactics and lowball offers may be less effective with agents.

Smaller Buyer Pool

If you refuse to pay a commission to agents who are representing buyers, agents will steer clear of your property. Many buyers insist on using an agent to view and analyze properties. By putting a "no agents" clause in your listing, you'll lose agent-assisted buyers. And if you don't pay a broker to list your home through the Multiple Listing Service, most agents and buyers won't even know that your house is for sale.

Time Committment

When an agent lists your home, your only responsibility is to keep the home clean for showings. When you list the home, you must create ads, screen callers, host open houses, show the home and negotiate the sales price. If your job isn’t flexible, you may not have adequate time to meet with potential buyers at their convenience.

Experience

Disclosures and contracts are legal documents. Agents provide guidance about potential liabilities, thus helping sellers avoid lawsuits. Agents review and analyze closing documents and ensure that you don’t lose money at closing because of an oversight. While you can hire an attorney, some lawyers are relatively inexperienced in real estate law.

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