Selling a home is one of the most significant financial decisions many people will make in their lives. However, because it’s not something people do often, many homeowners are unfamiliar with the process. With a little information, though, you can make the decision that makes the most sense for your family based on your goals and finances. This article explores the two main methods of selling a home, including both For Sale By Owner (FSBO) and using a traditional real estate agent, and examines how the recent settlement with the National Association of Realtors (NAR) will likely impact the home selling process beginning this summer.
For Sale By Owner (FSBO): Empowering Homeowners
For Sale By Owner (FSBO) is an approach where homeowners sell their property without the assistance of a real estate agent. This method can be desirable for several reasons:
- Cost Savings: One of the most significant benefits of FSBO is the potential to save on commission fees. Traditional real estate agents typically charge 5-6% of the sale price, amounting to tens of thousands of dollars. By choosing FSBO, sellers can retain this money, maximizing their profit.
- Control and Flexibility: FSBO allows homeowners complete control over the selling process. From setting the price to scheduling showings and negotiating directly with buyers, sellers can manage every aspect of the transaction according to their preferences and schedules.
- Direct Communication: Without an intermediary, communication between the seller and buyer can be more straightforward and transparent. This direct interaction can lead to quicker decision-making and more personalized negotiations.
Using a Real Estate Agent: Expertise and Convenience
Hiring a real estate agent is the traditional method for selling a home. Agents bring professional expertise, market knowledge, and a network of contacts that can be invaluable. Here are some advantages of using a real estate agent:
- Market Expertise: Real estate agents have in-depth knowledge of the local market, helping sellers price their homes competitively and attract potential buyers.
- Convenience: Agents handle all aspects of the selling process, from listing the property to conducting showings and negotiating with buyers.
- Professional Networks: Agents can access a broad network of potential buyers, other agents and marketing channels.
Industry Changes:
The NAR Settlement
Recent developments in the real estate industry, particularly the settlement with the National Association of Realtors (NAR), are poised to impact how homes are bought and sold. The settlement addresses current practices, such as the lack of transparency and competitiveness, including how commission fees are disclosed and negotiated.
How the NAR Settlement Could Benefit FSBO Sellers
The opportunity for FSBO home sellers to work with buyers’ real estate agents will likely increase. These agents can assist with bringing qualified buyers to the property without the FSBO seller having to pay the full commission traditionally associated with listing agents. This flexibility allows FSBO sellers to benefit from the professional networks and expertise of buyers’ agents while maintaining control over the sale process and saving on listing agent fees.
Conclusion: Making the Right Choice for You
Selling a home is a complex process with multiple options, each offering distinct benefits. FSBO provides cost savings and control but requires effort. Using a real estate agent offers convenience and expertise but comes with high commission fees. The recent NAR settlement is set to enhance transparency and competition, empowering homeowners and homebuyers to make more informed decisions.
Ultimately, the best choice depends on individual circumstances. By understanding the available options and staying informed about industry changes, homeowners can navigate the selling process more effectively and achieve their desired outcomes.
Yehuda Kohn, a 20-year veteran of the mortgage industry and the founder of SaveOnYourHome.com, is dedicated to transforming the home buying and selling experience by making it more accessible, transparent and cost-effective. SaveOnYourHome.com offers free services and step-by-step guides to help homeowners sell their properties and prospective home buyers complete their transactions without paying any fees or commissions.
