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It’s finally time to sell your house, and you’re immediately faced with a difficult decision: Should you hire an agent, or try to sell it on your own?

You may look at the numbers and figure you’ll be out $18,000 when all is said and done. You may think about what you could do with that $18k if you had it to spend (A car? Pay off debt? Travel to Mallorca and beyond?) So you could decide to buck convention and…sell your $300,000 home without an agent and go the “For Sale By Owner” (FSBO) route.

Certainly, there may be situations and circumstances when that might be a good idea, but here are 5 reasons why you might want to think twice about selling your house on your own:

Liability

Perhaps the most significant deterrent to a FSBO transaction is the inherent risk that the home seller will take upon himself/herself. There is potential exposure to litigation if anything–and that means anything–goes amiss: inspection errors, disclosure errors, clerical errors, due diligence errors, etc.

Licensed real estate agents carry E&O (Errors and Omissions) Insurance which would financially shield them from mistakes that can be made in the complex web of transactions that make up a home sale. The typical FSBO seller, however, will not have this protection and will thus be financially liable for any errors and subsequent litigation that might occur.

Marketing and Exposure

Everyone desires the quick sale of a home in an agreement that is advantageous to both parties. Maximum exposure to potential purchasers is often best achieved with a listing on the local MLS (Multiple Listing Service), where it can be seen by numerous real estate agents representing buyers. In turn, the home is also represented on popular real estate sites such as realtor.com and Zillow.

Most FSBO homes will not have the same level of access to a wide array of potential buyers and agents. Tyson Craig, a realtor based in Draper, Utah, says “92% of Utah home buyers shop with the assistance of a licensed realtor and may never be exposed to FSBO homes. Why? Agents prefer to show homes that are represented by other agents that have their UAR license on the line and have the same interest in protecting the transaction, making sure it stays legal from start to finish.”

Time, Time, Time

As previously stated, the transfer of homeownership is a complex process. Like anyone who has gone through the rigors of either selling or purchasing a home can attest, the procedure involves a very significant time investment to properly bring the whole event to a successful conclusion.

In a typical real estate transaction, the seller’s agent is tasked with the subtle details of the sale; after all, that is why they are being paid. Those who decide to go the FSBO route will need to invest a significant amount of time juggling the needs of the buyer, the agent representing the buyer, appraisers, city inspectors, home inspectors, showings, and more.

Low Risk

When considering the time investment in selling a home, it’s significant that the bulk of that time will be expended by the seller’s agent—at a relatively low risk to the seller. In other words, the seller’s real estate agent invests all of the time and energy and know-how and is only paid upon the successful sale of the home.

If the home does not sell, they don’t get paid and the seller has not lost a significant amount of time or funds. In a FSBO situation, the private seller will be out the time invested if the home fails to sell in a timely manner.

Listing Price

Errors in judgement with regard to the listing price of a home are relatively common, and even more so with a FSBO. Typically, sellers err on the high side—listing their home above the value that the usual buyer will pay.

A real estate agent helps to temper the tendency for the homeowner to list too high by selecting a reasonable range, using comparable properties supplied by the MLS. Too often, a homeowner will overvalue individual improvements that they have made to the property (e.g., a pool)—improvements that will not receive a dollar-for-dollar return in the overall appraisal or market value of the property.

Conversely, a price that is too low will attract investors or low-ballers seeking a bargain, buyers who are unwilling to pay a full-market value for the home.

So, should you consider using the FSBO model to save some money?

Most experts say no when taking the factors listed above into consideration. FSBO homes generally sell for less and the overall percentage of homeowners selling on their own has steadily decreased over the past few years. The liability issue alone might well be enough to indicate that the best choice is to consider the agent’s fees as part of the accepted cost of selling a home.

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