FSBO vs. Working with a Realtor

When you’ve made the decision to sell your home, the next step is to decide if you want to hire a

Realtor or sell as a FSBO (For Sale By Owner). While it may sound enticing to save on commission fees by selling FSBO, many sellers are unfamiliar with the real estate industry and unaware of the time and energy needed to navigate such a large transaction with the legal paperwork and contracts required. There are several situations where FSBO may be your best choice going forward, but for the majority of property sales, the knowledge and expertise of a Realtor can make the process much less stressful and time consuming for you.

FSBO may be a good choice for you if you already know a serious potential buyer personally and

over half of FSBOs know their buyer before listing their property. If you already have a buyer lined up,

marketing your property may not be a priority. As FSBOs do not have access to the Multi Listing System

(MLS) you are at a disadvantage when advertising your property to the public. Another benefit of

knowing the buyer directly is that you can offer your personal testimony with your own lived experience

of the home and surrounding neighborhood, while a real estate agent can only provide objective

comparatives based on market trends, the condition of the house and neighbourhood amenities. FSBO

may also be a good choice for someone who works in the real estate industry but is not a Realtor, such as

a real estate administrator or a paralegal for a real estate lawyer as they will be more familiar with the

process than a layperson.

Many people considering FSBO do so because they wish to save money in commission fees by

not using a Realtor, as they only have to pay the buyer’s agent a commission fee of 2-3%. For example, a

home that sells for $500,000 would have $10,000-15,000 paid to the buyer’s agent for commission. As a

FSBO, this savings can seem like a good reason to list your property yourself but in many cases, this

savings is mitigated by the extra costs involved in doing the work yourself. A FSBO also runs the risk of

undervaluing their property without the input and negotiation of a Realtor, with the savings in

commission fees often less than the extra value you could get for your home with a Realtor’s knowledge

about market conditions and comparable home sales and using that knowledge to negotiate a higher price

for your home.

If you are looking to list your home to the general public without a potential buyer lined up, your

Realtor can provide a great deal of value in promoting and negotiating on your behalf, saving you the

time and stress involved in doing so yourself. As most people selling their home have a full-time job and

other life responsibilities, handling every step of the transaction can be very stressful and may lead to a

less than desirable outcome for you. Contrary to popular belief, selling a home is not as simple as putting

up a For Sale sign and holding a few open houses. One of the many duties of a Realtor is to arrange for

home viewings on their own schedule, while if you are a FSBO, you must arrange viewings yourself

around your own busy schedule.

Many FSBOs underestimate the value of a Realtor and the services and support they provide,

which often offsets the commission savings as a FSBO. A big advantage to having a Realtor is their

access to the Multi Listing System (MLS) where your listing will be accessible to the general public who

are browsing sites such as realtor.ca. The professional staging and photography that a Realtor provides to

advertise your listing can make your listing stand out among others and generate a higher asking price for

the property. A Realtor will also have insight to the market value of your home with their knowledge of

comparable properties and market trends, avoiding the risk of a FSBO underpricing their property and

losing out on additional value, or overpricing their property and having their listing sit on the market for a

long period of time.

Realtors are also responsible for negotiating prices and conditions with potential buyers and have

the experience and expertise to advocate for your desired price and favorable selling conditions, and are

often able to extract the maximum value and conditions to protect you as a seller. Using the previous

example above of commission on a $500,000 home, if your Realtor can negotiate a price that is more than

$15,000 higher than what you would have accepted in an offer, this would equal the commission you

would save without a Realtor.

The legal contracts and paperwork involved in a real estate transaction can be complicated and

arduous for a layperson to understand and navigate on their own. A Realtor is educated in the various

steps and paperwork required to successfully complete the transaction. They will also know what

contingencies and requirements should be in a contract for an agreement of purchase and sale, and can

protect you from unexpected delays or overlooking documents you may be required to submit.

Some buyers may be less willing to work with a FSBO because they have more trust in a realtor

to ensure a smooth and expedient transaction on their end, which limits the potential buyer pool and can

result in accepting a less than favorable deal or having your listing sit on the market for longer than it

would if you had a Realtor. A common misconception of FSBOs is that realtors are overpaid and their job

largely consists of snapping some pictures and holding open houses, when the reality is that their job is

far more extensive and time consuming.

While FSBO may be the best option for someone who personally knows their buyer or is

equipped with some knowledge of how complex a real estate transaction can be, the vast majority of

people strongly benefit from working with a Realtor for the reasons listed above. When you are working

full time and “time is money” so having a Realtor means not having the stress of marketing, professional

photography, staging, arranging viewings and ensuring all paperwork is accurate and complete is

invaluable.

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