I’m currently in the midst of Dave Ramsey’s Financial Peace University. The program follows a 9-week curriculum that lays a foundation for ultimately becoming debt-free (mortgage included). While it may seem a bit radical, Ramsey lays out simple, manageable baby steps to get started, beginning with saving a $1,000 emergency fund, all the way up to saving for retirement and tithing.
In week seven, Ramsey discusses real estate and mortgages. In this chapter, after explaining that “a quality real estate agent is worth more than they’d cost you when it comes time to sell” (we agree, as do our clients!), he states, “ ‘For Sale by Owner,’ or FSBO says something to a buyer.” Have a look at the image below, and tell me what it says to you:
While it’s a lovely piece of homemade artwork, to my mind, this sign (and a similar one, of a different animal shape, in another spot in the yard) says that the house has been for sale for a long time (which, of course, may or may not be true). Then I begin to wonder what might be wrong with it, whether it’s an ornery seller, substantial problems with the home, too high an asking price, or any number of other problems.
Ramsey suggests that, to a buyer, a FSBO home equates to the owner being more flexible on pricing (read as: priced under market value), since they’re not paying a commission to an agent. Indeed, according to statistics from the National Association of Realtors (NAR), the median property sales price for those who engaged the services of an agent came in at 16 percent higher than FSBO homes.
The benefits become apparent when you review the statistics, according to the 2013 National Association of REALTORS® Profile of Home Buyers and Sellers. FSBO homes:
- Accounted for only 9% of home sales in 2013
- Sold, on average, 19 days longer than agent-assisted sales
- Sold, on average, for $41,000 less than agent-assisted sales
- Were considered difficult to sell by 70% of FSBO owners
- Posed significant challenges, including
- Understanding and performing paperwork
- Deciding on appropriate pricing
- Preparing home for sale
- Attracting potential buyers
In addition to helping you determine—and sell at—your property’s fair market value, there are several others concerns that arise when personally promoting your home for sale. These can include limited exposure (only a licensed agent can list your home in the MLS), legal conformity issues (real estate agents and transactions are strictly monitored by the Department of Commerce), marketing tactics (brokerages like RE/MAX Results are able to broadcast your listing to far more sites and outlets than you could as an individual), and more. Whether or not you agree with Dave Ramsey, choosing to work with a real estate agent can save you time and money when selling your home.
Angela Anderson, Realtor, Results Support Services: EMAIL — BIO
Licensed Associate Working with Sharlene Hensrud of RE/MAX Results, and HomesMSP — Sharlene, John, Angela
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