When selling “by owner,” you will come in contact with all kinds of potential buyers, but one thing you’re bound to discover is that serious buyers work with real estate agents.
A lot of unrepresented buyers (those not working with agents) will not be especially credible or serious. They may be looking for an owner who will sell at a deep discount (after all, you’re saving the commission, right?), or who will do a lease option or provide some kind of owner financing because they are unable to obtain a conventional bank loan. And that can be OK in some situations, but most sellers, most of the time, are looking for ready, willing, and able buyers who have their financing lined up such that they can make an offer which will get the seller completely out of the property and on their way.
The thing about serious buyers is that most of them (about 88%) are already working with a real estate agent. And most of those who are working with an agent have been doing so for some time, as the home buying process can take many months – and in some cases, years. Those buyers will usually want to see their agent be compensated, and will be looking to the seller to pay at least their agent’s commission. There goes half the money you might have thought you’d be saving, in most cases.
Another thing to consider is that these agents may be actively steering away their clients from your For Sale By Owner listing. There are good reasons for this – they’ll worry about how much or even if they’ll get paid, for example. They’ll also need to worry about the paperwork – what contract will be used? The one they use for virtually all their sales, which they are very familiar with, or one that they’re unfamiliar with and may not protect their clients as much as the standard Realtor purchase agreement they know and love?
What’s more, since a for sale by owner probably has not sold many homes – if any – on their own before, that seller will often be unfamiliar with the process, and the buyer’s agent will be forced to do a lot of extra work, and assume a lot of extra liability. For these reasons, many buyer’s agents will do what they can to avoid working with For Sale By Owners.
Given that the buyer will in all likelihood have an agent, and that you’ll be paying that agent to represent them, not you – there is some sense in your having an agent to represent your own interests as well.