Reasons Why Real Estate Sellers Can't Save Money By Selling On Their Own

What are the reasons that sellers are unable to save money by selling on their own?

Reflect on this matter for a moment. Essentially, we toil without compensation, exert immense efforts to market a property, and only receive remuneration upon its sale. 

It's quite a remarkable arrangement for homeowners, wouldn't you agree? We locate buyers and facilitate the sale of their property, ensuring they reap the same financial rewards that they would have garnered if they had endured the exhaustive process, expenses, and frustrations on their own. "Eric, why do you assert this?" you inquire. Allow me to elucidate. Here's the rationale.

Independent Buyers Seeking FSBO Properties Crave One Thing Above All: A Tremendous Deal

Albeit their objective encompasses more than saving on agent commission fees, they strive for an exceptional value proposition. Let's say there is a $100,000 house, and our services come with a fee of Z. If an FSBO seller asserts, "I intend to handle the sale independently and save Z," a prospective buyer contacting this FSBO exhibits an awareness that the seller endeavors to bypass commissions deemed typical in the industry. 

Consequently, the $100,000 asking price already incorporates the anticipated commission. Given the buyer's aversion to paying those fees to the agent, it follows that they would deduct Z as an approximation of the commission. However, operating under the impression that the seller would still amass a sum akin to a listed sale, the buyer often expects a further discount of roughly 3% of Z.

Imagine an instance where an FSBO seller has actively engaged in independent selling for an extended period. During a presentation, you can take a seat and address the seller directly, saying, "Jean, let me elucidate why you won't achieve any cost savings. Have the buyers who have shown interest in your property made any offers?" Let's assume Jean responds affirmatively. At this point, you can confidently state, "I wager that they have been offering you approximately 10% below your asking price." Often, the seller's reaction will convey genuine surprise as they inquire, "How did you know?" It seems buyers possess some unspoken guidebook advising them to negotiate at a price 10% lower than what the seller initially seeks. 

Do you comprehend the significance of this concept? It signifies precisely why an FSBO seller is unlikely to realize any savings. In the end, they would essentially achieve the same financial outcome, or realistically, even less compared to if we were handling the sale on their behalf. Additionally, the FSBO seller would need to undertake significantly more work to merely hope for a break-even result. While certain circumstances, such as a red-hot seller's market, may slightly alter the validity of this premise, countless other reasons convincingly argue against FSBO sellers achieving any significant cost savings.

Engaging In Third-party Negotiations Sets Us Apart

As agents, we become the intermediary between buyers and sellers, sparing them direct negotiations. Imagine this scenario: a seller desires $100,000 for their house yet might secure only $90,000 when handling the transaction independently. 

Now, thanks to our mastery in negotiations combined with our extensive expertise, we possess the astonishing potential to generate a profit of $90,000 or perhaps even surpass that amount for the seller. There's a common saying you may have come across: "An attorney who advocates for themselves has an easily misled client." This adage holds true because personal involvement often leads to errors. Simply put, one of the invaluable assets we offer to sellers is our impartiality. We rigorously practice the art of negotiation, which has a solid foundation in methodical research, as part of our skill set. 

On the flip side, typical sellers may encounter the housing market now and then—perhaps a mere once or three times throughout their whole existence. Keep in mind that this could very well be their most momentous financial agreement. 

In circumstances as paramount as these, wouldn't it be prudent for them to rely upon a professional who boasts a track record consisting of dozens, or even hundreds, of successful deals? Undoubtedly, they should. Additionally, it's worth highlighting that our mutual gains lie in delivering the highest payout possible, as we, too, prosper from our commission. 

Once more, forgoing our assistance would merely amount to the seller netting no additional funds, or conceivably even less, for their arduous endeavors. Why subject oneself to such a precarious proposition?

Agents Possess a Multitude of Valuable Resources That Are Fundamental

When a seller aims to secure the optimum price, our mission is clear: we must drive as many potential buyers as possible to their doorstep. To achieve this, we harness the power of robust marketing tools, enabling us to generate extensive exposure for the property. It is through the execution of these marketing strategies that we attract a greater pool of interested individuals. 

Consequently, a surge in prospective buyers ultimately translates to higher offers on the house. One crucial aspect to consider is that sellers who attempt to navigate the process on their own find themselves severely disadvantaged. They lack the extensive arsenal of marketing tools available to us, which drastically limits their exposure.

How many marketing tools does a For Sale By Owner (FSBO) have at their disposal? Perhaps two or three, scarcely sufficient. In stark contrast, as competent agents, we possess a plethora of resources. Allow me to provide an illustrative example that highlights the irrefutable value of our marketing advantage. 

Suppose a homeowner in Boston decides to sell, while a potential buyer is relocating from New York. Regrettably for the FSBO, this eager buyer does not have access to the Boston Globe or any other avenue to sight the FSBO ad. On the other hand, the buyer smartly reaches out to a trusted Boston agent, ensuring they gain access to professionally listed properties. 

Consequently, the FSBO misses out on a remarkable opportunity to attract the best, most highly motivated buyers - the cream of the crop. This demonstration effectively emphasizes how our marketing tools can elevate property exposure, subsequently leading to a more lucrative sale price. To summarize, these three key factors debunk any notion that sellers can save money by embarking on the journey alone.