4 Myths of Selling By Owner – Atha Team Blog

Montrose Co Real Estate

In the current fast-paced Western Slope Colorado real estate market, it might be tempting to list your own home as a For Sale By Owner (FSBO). As qualified, motivated buyers are flooding into Montrose and surrounding areas, one might think it would be an easy choice to list their own home and bypass a realtor to save money. But there are some common misconceptions with the FSBO avenue that many may not be aware of.

Myth #1: You Will Get More Money Out Of Your Home When Bypassing a Realtor

Montrose home on a hill - Atha Team Real Estate Montrose Colorado Blog

Fact: According to Homelight, as of February 2020, FSBOs typically sell for nearly 30% less money than with agent-assisted transactions, and in November 2020 the National Association of Realtors put out a similar report stating over 10% lower sales prices for FSBO homes. So, no matter how you’re pricing your home, you could be leaving a significant amount of money on the table. Most home owner’s motivations for listing their own home are to save on real estate agent commissions when in reality, they would actually come out ahead if they used a realtor. Additionally, buyers typically expect sellers to pay the buyer agent’s fees, so you may find some disappointed buyers if they are working with a realtor. And since NAR shows nearly 90% of buyers are working with a realtor and relying on them to find homes meeting their criteria, your listing may never be seen by qualified individuals.

Myth #2: In The Current Real Estate Market, You Can Name Your Price

Fact: While the current market is highly competitive, an uneducated home price can either leave money on the table or be so inflated it will deter buyer interest. Starting with a higher price and then dropping the price if there is little activity can also give the impression that something is wrong with the property. Real estate agents go through a significant amount of training and continuing education to make wise decisions on setting your home valuation. They typically rely on years of professional experience combined with extensive data and analytics from Automated Valuation Models to price homes with a 4-6% margin of error as opposed to up to 16% high error rate for buildings worth less than one million without using AVMs, according to Forbes. So, pricing your home can be a tricky process if you aren’t familiar with the very active, fluctuating housing market in your area.

Myth #3: You Can Market Your Own Home Effectively

Montrose Colorado Neighborhood with Mountain Views - Atha Team Real Estate BlogFact: The MLS, or Multiple Listing Service, is the number one platform that is used to list homes. Realtors rely heavily on this source, and unless you pay an MLS listing service fee to have someone else put your home on this platform, you will be missing out on the majority of qualified buyers in your area. It is possible to list your home on some websites, but popular platforms like Realtor.com and Homes.com are a lot more complicated and usually require working with a company agent. Add to that the statistics that only 8% of recent homes are for sale by owner listings, you won’t have a wide audience if your home is not placed in the MLS system and syndicated to all the major home search websites.

Myth #4: You Can Easily Download a Contract Online to Sell Your Home

Fact: You might be able to find a customizable real estate contract online, but you will be opening yourself up to a huge liability by doing so. Even if you have a lawyer draw up the paperwork, some may not specifically carry E&O (Errors and Omissions) Insurance that real estate agents do to protect themselves and their clients from unforeseen errors. Add to that the very specific non-disclosure laws that differ from state to state, and the landmines are endless. Though there have been many successful FSBO transactions between private parties, there are nearly as many horror stories of lawsuits that have cost sellers hundreds of thousands of dollars in some cases.

In short, listing your own home can be done, but it can be a treacherous minefield that can have scary repercussions if not done correctly. While it can be tempting in our very active Montrose market to explore the for sale by owner avenue, it should only be attempted with the proper counsel of knowledgeable people who can guide you through the process.

Still not convinced? Check out Dave Ramsey’s rant on selling your home without representation: https://www.youtube.com/watch?v=4RE2shZUTXM


 Thinking about Buying or Selling? Call or Text: (970) 417-9375

Atha Team - Keller Williams Colorado West Realty LLC - Montrose, Ouray Ridgway

Copyright 2021 Atha Team at Keller Williams Colorado West Realty, LLC. If you have a brokerage relationship with another agency, this is not intended as a solicitation. Equal opportunity housing provider. Each office is independently owned and operated. For sale by owner data not included in research findings. Sales data reflects sales from homes not limited to the Atha Team LLC. This information was gathered from Keller Williams, The National Association of Realtor, CoreLogic data analysis firm, Montrose Association of Realtors, and the Mortgage Brokers Association. This data is considered accurate, but is not guaranteed. All Rights Reserved. 

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