First off what does it mean to list your home as a FSBO? This means “For Sale By Owner”, listing your own home without the help or guidance of a licensed Realtor. The number one reason home sellers will usually choose this route is to “save money” by not having to pay a professional Realtor. Other reasons could be, the seller may feel they can do the same job or a better job at selling their home than a Realtor. Some sellers could have had a bad experience with a previous real estate agent… now they are left with a bad taste in their mouth and have lost trust in working with all Realtors.
There are multiple other scenarios that can cause a homeowner to choose selling their own home over working with a licensed real estate agent, I have literally heard them all. However sometimes we can’t blame a homeowner for feeling this way. Especially if they have had a bad experience with a Realtor, or maybe worked with a Realtor that did not provide the level of service that was promised. Over my 11+ years in the real estate industry, I have seen both good and bad Realtors in the business. Unfortunately just like in any industry, you have both sides and it can be hard to find the right person who is truly passionate about what they do. The people in business that strive to go above and beyond to provide excellent service and help customers, rather than just trying to make a “quick dollar”.
I am 100% sympathetic to the reasons why a for sale by owner would want to sell their own home. These are also VERY important reasons as to why homeowners should do their homework; interview agents and put forth the effort to find the best agent for the job. I highly recommend sellers do not choose a Realtor based solely off of the first agent they meet, the one who “says” they can get them a higher sales price, or the one who will do it for the “cheapest” amount. There is much more to be considered when making this important decision. Looking at only these areas can cause your home to not sell or sell for much less than it could have and an overall bad experience.
When choosing the right Realtor to sell your home, this should be based on actual facts within the local market. This includes items home buyers in your market will consider and items an appraiser will also take into consideration. Your decision to work with someone should be based on finding a Realtor who is experienced, someone who is able to overcome issues, able to bring YOU VALUE, and someone you truly enjoy working with. Selling your home is a very important time and can also be emotional, make sure you hire someone who will take away some of the stress while guiding you in the right direction.
Listing your home on your own will definitely allow you to save on paying a commission to a listing agent. However it will also result in you not getting the full benefits when selling your home. Did you know selling your home for sale by owner can actually have a negative affect on the sale? This method can turn away qualified home buyers within your market. This happens for multiple reasons, here are just 5 reasons home buyers will avoid homes that are listed “for sale by owner” and choose to look elsewhere:
- A for sale by owner is not licensed to sell real estate.
Why does that matter to a home buyer? Well one of the biggest reasons is, the seller is not held to the same legal guidelines that a licensed Realtor is held to. This can lead to mistakes or problems that can be done either intentionally or unintentionally. Sometimes this even happens out simple innocence, not being aware of specific requirements or understanding the ins and outs of the transaction. This is actually one of the biggest reasons a home buyer will avoid buying a home listed directly by the owner. As this can lead to conflicts during the sale along with having less accountability and recourse in working with someone who is unlicensed or unrepresented.
- A for sale by owner is not required to know the process.
Along with not having a license to sell real estate, a for sale by owner does not typically have direct access to the proper legal documents or process. This can lead to costly problems for both the buyer and seller along with liability issues if an error is made. Also issues can arise from timelines not being followed, inspections not being properly done, or if there is a discrepancy within the agreement to purchase. Often times sellers may not be up to date with which documents / requirements are applicable within the sale of the home. Unlike a licensed realtor, a for sale by owner is not legally required to know this information. This can often cause many of the issues mentioned within this post.
- A for sale by owner does not have all of the resources to attract buyers.
This not only eliminates and/or turns away a huge amount of home buyers within your market by improper marketing strategies. It can also cause your home to never even be seen by home buyers due to lack of exposure. The resources needed to properly (I repeat properly) market a sellers home can be expensive and time consuming. If someone is selling their personal home, it usually is not financially beneficial or time effective for a home owner to invest the effort and resources that is truly needed. Such as: professional photography, the use of multiple marketing platforms, video, and access to the many online accounts specific to the real estate industry. Not to mention the contacts and relationships built up over many years within the business.
- What else have they gone “cheap” on?
From a home buyer’s perspective if they see a seller wanting to sell their own home and not pay a licensed Realtor, it could begin to make a buyer’s mind wonder. What else did the seller want to “save money” on, take short cuts on, or do on their own to “save money”. Leaving the buyer less confident about buying the home and raise additional concerns.
- What if something goes wrong?
What if something goes wrong during the real estate transaction? Most sellers have not sold enough homes to be aware of all the possible issues that can come up during the process. Such as; appraisal issues, inspection issues, negotiation issues, and finance issues all while keeping the parties involved in compliance with the terms of the agreement.
To alleviate some of the above issues some for sale by owners will state that they will work with a Realtor on the buyer’s side only. However this is also something to be cautious of, as this can now get into a dual-agent situation or leaving the seller unrepresented yet wanting to get the benefits of the buyers Realtor. This can lead to more grey areas and only partially resolving the previously mentioned concerns.
If you are looking to buy a home or a seller considering listing their home for sale. Please take a moment to contact me to find out the best way to avoid these issues or costly mistakes.