Selling a home in Calgary can be stressful. In fact, some might say it competes with events like divorce and bankruptcy as being among the most emotionally draining things a person encounters in their lifetime.
Sometimes people make the choice to go it alone when selling a property. Often it seems that homeowners don't think the cost of a REALTOR ® is feasible. Or they don't see the value in a partnership with an agent at all.
But taking a For Sale, By Owner (FSBO) position is not without risks. The most daunting risk is losing out on what could be.
Real Estate Agent transactions can sell for 25% more than FSBO transactions. If money is the issue, securing up to 25% more on the value of your home would cover all brokerage fees with money in the seller's pocket.
Yet, many homeowners still try FSBO first to see what happens. This is an especially frequent trend when the market is primed for sellers.
As for Calgary's real estate market, it has been very good in 2017. But in July an ease in demand caused by factors like lending uncertainty and summer seasonal slow down began to tip the scales. What remains is a growing supply of homes for sale and a demand that is not increasing at the same rate.
Is this really the time to take unnecessary risks selling your home?
The Risks of FSBO: Selling a Property in Calgary
When selling a property, there are always going to be risks. Many are outside of your control, like market fluctuations and lending policy changes.
FSBO selling has its own set of unique risks that may make you think twice before pocketing the amount you'd spend on the agent's commission.
First, There's The Money
Nevermind that you're likely going to lose money on the sale of your home by omitting an expert Real Estate Agent. Let's talk about the commission.
If you're choosing to go it alone when selling a property because you don't want to pay a commission, remember if your buyer has an agent you may end up paying a percentage to that agent, anyway based on the fact that most Agents have a signed Buyer Brokerage Agreement with their client.
The truth is, if you want agents to show up and view your home with a buyer, you have to offer a fair incentive. No one wants to work for free.
With an abundance of homes for sale in the Calgary market, why would an agent show your home above another similar home, knowing they are going to have to do the same amount of work for little or no pay?
Almost 90% of home buyers are shopping online to find homes and will hire an agent when it comes time to view homes and to represent them to negotiate an offer. If you decide against meeting the industry most common buyer agent commission, you could be limiting yourself to 10% of shoppers. It's no wonder why the homes tend to sell for less.
A thoughtful, motivated FSBO will invest time and money in systems like MLS ® System, advertising to REALTORS ® , and offering a competitive commission to buyer's agents. They will also consult a Real Estate attorney to help them with contractual obligations once a buyer has been established.
By the time you've invested in advertising, legal help, and buyers agent commission, you have to ask yourself was it worth it?
On top of that, you could lose up to 25% of your home's potential value on the sale. When you look at it like that, it's not a great deal at all. Selling a property by owner seems risky, at best!
Then, There's the Expertise
A good agent is going to be smart about Calgary's current market when selling a property. They should be someone you turn to for expert advice on everything from pricing your home to negotiating with the Real Estate Agent representing the buyer and know the current neighborhood stats.
A seller's agent spends countless hours surveying and researching your home. They note improvements, check current values in your neighborhood, and price the per square foot cost of competitors currently on the market and those that recently sold.
They strategically use this information to create a comparative market analysis that is comprehensive enough to provide expert level advice on pricing. They know instantly when an offer comes in if it's in-line with market value, above or below average. That puts you in a better position to negotiate.
But one of the most valuable things a Real Estate Agent offers is guidance. Selling your home comes with a lot of paperwork. But when there's a question, having an expert that provides clarity, solutions, and peace of mind is priceless.
And Finally, Professional Resources
Being an expert isn't all about the knowledge, it also includes having access to tools of the trade. Licensed REALTORS ® are part of a network of professionals. The professional association provides resources like MLS ® System, contract management, quick access to relevant tax information, neighborhood profiles and more.
REALTORS ® also have the most secure lock boxes to protect your home and scheduling services that make showings more efficient. They have buyer referral networks and relationships that can be leveraged with professional photographers, inspectors, and banks. Only agents can provide affordable, resourceful marketing on all of the platforms where your home should be listed.
If you decide that doing it alone is the way to go, you forfeit more than your money and your time. You are forfeiting resources that sell your home faster and for more money.
Still Thinking About FSBO?
Even knowing what we do about FSBO sales, many homeowners will choose to test the waters anyway. From the seller's perspective, what do they have to lose? After all, they can always reject a bad offer and contact a Real Estate Agent when they're ready.
But before you take this approach, please understand that it's a slippery slope and there are many more risks involved than whether or not you have to pay commission.
If you're willing to invest the same time and money in research, advertising, professional tools, resources, buyer agent commission and contract legal advice you might have a shot at not losing money on your home's value.
But if you're like many homeowners who simply don't have the time, money or expertise to make that kind of commitment, give us a call. Our experts are ready to talk to you!