Conventional wisdom states that if you plan to sell your own home you should hire a real estate agent. After all, transacting in real estate is a complicated process. Agents have the experience, training and expertise to help you sell your home in the property market at the price you want.
But a revolution in the real estate market has been taking shape the last few years. More property owners have taken to selling their own home without the help of a licensed real estate agent.
The process of selling a home privately without the representation of a real estate agent is called FSBO or For Sale By Owner. It has been gaining popularity in Australia where prices of real estate property have been on a steady climb since the year 2000.
Why are more people going the way of FSBO?
There are 2 big reasons why FSBO may be the best approach to selling your own home.
Improve the Net Return on Your Property
When you hire a real estate agent, there is a price you pay for capitalizing on his or her experience, expertise, knowledge and connections. The price is in the form of commissions which range between 2% to 3% depending on the location of the property and the level of demand.
By going FSBO and removing the agent from the transaction, you automatically improve the net return on your property by 2% to 3%.
But there are also other expenses to account for when you hire the services of a real estate agent. These are the out- of- pocket expenses for marketing and promoting your property.
Without a real estate agent, you have better control over the expenses related to the sale of your property. All told, you would save up to 6% to 8% in expenses by going the FSBO route.
What can you do with the 6% to 8% cost savings?
- It will give you better room for price negotiation
- You can use it to contract the services of a Virtual Assistant who is a cheaper option than a real estate agent.
A Virtual Assistant can do the following tasks for you:
- Prepare all the required contracts
- Open an account for your home in a reputable For Sale By Owner website
- Manage your social media
- Attend to all inquiries
- Schedule property visits
- Prepare marketing collateral
You only pay a Virtual Assistant for productive hours worked which means you can easily stay within your budget and still get more work done.
Improve Probability of a Quicker Sale
A real estate agent will ask you to sign an Exclusivity Agreement. This ensures the agent that only he or she has the full and complete authorization to sell your property.
The agreement is onerous because while your property is beholden to the agent the agent will never be beholden to you.
Real estate agents also manage other properties in their list. They will not devote 100% of their time trying to sell your property. This is also a business and agents observe PROTI or Potential Return on Time Invested.
Translation: Agents may put more time and effort selling a property that offers higher or immediate returns. Good luck if your property is located in Tasmania and the agent has properties lined up in Sydney!
As a rule, if your property remains in the market for 4 months, its perceived value starts to drop.
By adopting FSBO, you can devote 100% more time to selling your own property. With the help of your Virtual Assistant, you can probably sell your home within 4 months.
Selling your own home may seem like a daunting task. But really, is there anything a real estate agent does that you can’t do yourself? The most time consuming part of the process is pushing your property in the market and the Virtual Assistant can get that done more efficiently.
If you want a higher return on your property in the fastest possible time, FSBO is the way to go.