Properties that are listed for sale without using a licensed real estate agent are known as FSBOs, or For Sale by Owner. For many people, the thought of paying a 6% commission to a licensed professional to sell their home is, well, depressing. After all, how hard can it be? No one knows your home like you do. But before you make the decision to forgo using a real estate agent, you should consider your comfort level in several areas.

One of the areas in which you may need special expertise is pricing your home. Do you feel confident in your knowledge regarding neighborhood values or with your ability to conduct the research necessary to price your home appropriately? Remember, even if you know what the house down the street recently sold for (the one you’ve driven by a thousand times that looks very similar to your house), you might not be aware that the furnace was ancient and on its last legs or that last year the owners completely remodeled their kitchen. Not having intimate knowledge of the factors driving value in neighborhood sales can result in incorrectly pricing your home.

Underpricing AND overpricing your home can cost you money. Is it worth an extra $300 in commissions to avoid underpricing your home by $5,000? Conversely, overpricing your home can result in an extended marketing period with carrying costs such as mortgage payments, utility costs, and real estate taxes. And nothing is worse than overpricing your home in a declining market—leaving you in the dreaded position of chasing the market down! By the time you begrudgingly accept that your house is overpriced and you are willing to reduce the asking price, the market has further dropped. Now your new reduced asking price is still too high and the cycle repeats…

Sales agents that are active in your neighborhood will have first-hand knowledge of the condition and attributes of properties that have sold or are currently available for purchase and directly competing with your house. This knowledge will prove useful in setting a reasonable asking price that will result in a timely sale.

Not surprisingly, asking prices can be tainted by emotion in FSBOs. Homeowners remember the month of Sundays spent laying and relaying the stone patio in the rear yard. They can’t imagine potential purchasers not smiling ear to ear when they discover the beautiful forest wall mural a best friend painted in the nursery. When pricing a home, a good sales agent can help to navigate past the emotion—a really good agent will do so while enjoying a glass of tea on the rear patio looking at baby photographs.

– Linda Tayntor