In 1981, 22 percent of home buyers read newspaper ads to find a home and eight percent used friends as an information source. In 2016, 44 percent looked for properties online first (National Association of Realtors, 2017).
There is no denying that the world is quickly transitioning into becoming almost entirely digital. Instead of The Denver Post, people are now looking to find listings on websites and apps such as Zillow, Redfin, or Trulia. These apps allow consumers to filter through thousands of houses based on everything from location to number of bedrooms and the year the house was built.
There are many reasons why a person would decide to use a listing service alone and forgo hiring a traditional agent to aid the home buying process. While we admire the DIY spirit, the For Sale By Owner (FSBO) approach is less than ideal when it comes to buying and selling your home.
Below we have listed the most common myths about the benefits of FSBO listing services, and shed light on why using an active agent will always be a better solution.
- You Will Save Money
“I ran the numbers – do you want to save three percent, or lose 27 percent?” Vivi Gloriod, Your Castle’s top agent for the month of July, asks her clients. Many people are deterred by what seems to be a heavy commission fee that agents request when selling a home. Research shows that between common “rookie” mistakes, errors in pricing, and general lack of negotiating experience, FSBO will end up costing sellers more than an agent’s commission. According to the National Association of Realtor®’s 2016 Profile of Home Buyers and Sellers, the average FSBO sales price was $185,000, while the average price for a home represented by an agent was $245,000. That’s a difference of 25 percent!
Experienced agents, especially Your Castle agents, have been trained to be experts in negotiations and the real estate market. They are familiar with pricing strategy and are well equipped to recommend appropriate offers and counteroffers. Agents understand the value of your home and are incredibly motivated to get you the best price for your house.
- You Will Have Complete Control of Your Listing
This may be true, but stop for a moment and realistically ask yourself, “is this really for the best?”
Dave Ramsay of Ramsey Solutions reminds us that, “Even if you went the FSBO route every time you moved, you might do three or four of these transactions in a lifetime. A good agent closed three or four deals last week! They’ll know all the ins and outs of buying and selling a home, and they’ll walk you through every step of the process.”
One of the most tedious steps of buying a home is the copious amounts of paperwork that must be completed. In a FSBO circumstance, the burden of ensuring the paperwork is accurate and properly completed falls into the hands of the seller/buyer. Real estate professionals are well-seasoned on this paperwork and all of the legal schematics behind it.
Paperwork fees are often already included in an agent’s commission, effectively eliminating the extra expense of hiring an attorney solely to help you fill out the various forms. The home buying process is incredibly detailed and can quickly become very overwhelming to buyers and sellers attempting to navigate it alone. Each step in the process is inextricably tethered to the next, so an error made at any point in time during the proceedings can be fatal to the transaction.
- You Will Be Able To Manage Showing/Open House Timing
Perhaps you would be able to coordinate a single open house, but can you also juggle all of the other aspects that go into selling a home? For example, organizing photographers, home stagers, and marketing avenues in order to get people to even come to the open house you set the date for?
Agents have pre-established relationships with the best local house photographers and stagers. Together, they work as a well-coordinated team in order to show your house in the best light possible (literally and figuratively). Again, agents are experts in the local market and therefore know exactly how to stage your home to appeal to buyers looking to move into your area.
Established agents also have a strong social media presence, name recognition, access to professional networks, and relationships with other agents that can help move the sale of your house. Additionally, all agents have access to local Multiple Listing Service (MLS) that immediately provides information to thousands of active local buyers.
Embracing The Change
Listing services such as Zillow and Redfin have become disruptive innovators in the real estate world (meaning they have brought new technology into an existing market). Disruptions are inevitably followed by periods of adjustment, and in terms of real estate, all parties — including buyers, sellers, and agents alike — have had to re-learn how to navigate the world of real estate and reinvent the process of buying and selling a home.
Through these changes, there are a few benefits to using listing services as an aid to buying a home. Andrew Richardson, a Your Castle Real Estate agent, argues that, “Zillow has woken up this industry. We [agents] have to find new (and far more appropriate) ways to add value. Zillow has also brought reviews into the spotlight, meaning the value you add or don’t add can now be public.”
Above all, Richardson mentions, “Zillow has created opportunity. The opportunity is to be there [for the clients] showing value early on, [even] while they’re shopping at home. We [agents] can show up by direct contact, referral, direct advertising, and [now] by online presence.”
Listing services have found a way to allow agents to offer even better customer service to their buyers and sellers. In this way, listing services can be seen as beneficial, but only when used in conjunction with a traditional listing agent.
What is your experience with private listing services and FSBO tactics? We would love to hear about your experiences, good and bad! Share them in the comments below!