DENVER - ColoradoDesk -- Peter Wassileff of HomeSmart in Lakewood, Colorado says today's real estate market is one of the fastest moving in recent memory. With record-low inventory, Peter is seeing multiple offers and sometimes even bidding wars for homes in the most sought-after neighborhoods. This has led some sellers to question the need for an agent. After all, why spend money on a listing agent when it seems that you can stick a For Sale sign in the yard then watch a line from around the block?

For sale by owner or FSBO offers sellers the opportunity to price their own home and handle their own transaction, showing the home and negotiating directly with the buyer or his or her real estate agent.

Peter says one of the biggest problems FSBOs run into is pricing the home properly. Without access to information about the comparable properties in the area, sellers could end up overpricing their home causing it to languish on the market or underpricing their home leaving thousands of dollars on the table.

Even during last year's strong seller's market, the median sales price for FSBOs was 10% less than the median price of homes sold with the help of a real estate agent. And during a more balanced market, like the one we experienced in 2018, FSBO homes sold for 24% (or $60,000) less than agent-represented properties. This suggests that, while sellers may think that they will price and market their home more effectively, in fact they may end up losing far more than the amount they would pay for an agent's assistance.

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Without the services of a real estate professional, it will be up to the seller to get people in the door. Sellers will need to gather information for the online listing and put together the kind of marketing that today's buyers expect to see. This includes bringing in a professional photographer and videographer, writing the listing description, and designing marketing collateral like flyers and mailers or hiring a writer and graphic designer to do so.

Once someone is interested, sellers will need to offer virtual showings and develop a COVID safety protocol. Sellers will then need to schedule an in-person showing (or in some cases, two or three) for each potential buyer. In addition, sellers will be on their own when evaluating offers and determining their financial viability. Sellers will need to thoroughly understand all legal contracts and contingencies and discuss terms, including those regarding the home inspection and the closing process. While handling all of this work, it's likely that sellers will still need to pay the buyer agent's commission. Peter says that Sellers must weigh the potential savings against the significant risk and effort involved.

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If a seller is simultaneously selling and buying another home, Peter says even more expertise, coordination and negotiation skills are required to insure both transactions close.

According to Peter If sellers choose to work with a listing agent, they will save significant time and effort while minimizing the personal risk and liability. And the increased profits realized through a more effective marketing and negotiation strategy could more than make up for the cost of an agent's commission.

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