“I don’t need no stinkin’ Realtor!” A home “for sale by owner (FSBO)” option sounds like it could be a pretty sweet deal for the seller. After all, if you’re doing the work, you’ll walk away with the most money, right? But, is it really?
Here are some of the top pit falls for sale by owner sellers experience:
Pricing your home. Those who put their homes on the market as FSBO tend to set a price based on an online assessment tool or the lofty sum that the neighbor down the street claims they were offered. There is a difference between asking price, appraised value and market value. The market has a short attention span. The first three weeks on the market are the most critical. If it is priced too high it won’t show. If it doesn’t show, you won’t get any offers. If it sits on the market too long, it gains the stigma that something is wrong with the home. Conversely, pricing the home too low may create some skepticism and raise unwanted or unwarranted questions about the home’s true value. A Realtor has access to a database of comparable homes that have sold with square footage, number of bedrooms, etc., in your area.
Overestimate (or underestimate) how much money to spend on curb appeal. A novice home seller may not make repairs and upgrades that appeal to the to the broadest audience. A full-time Realtor works with buyers everyday and knows what gives buyers’ pause and what appeals to the majority. We also know the common repair items identified in the home inspection process and can provide guidance on repair items to address.
Showing your Home. FSBO sellers underestimate how draining it can be to set up showings. On top of scheduling actual potential buyers, you also have to deal with lookers with no intention of buying a house, lookers that can’t pre-qualified for a loan or may have less than honorable intentions, and investors looking to flip your house for a profit. Also, buyers can get uncomfortable with a seller present. As a result, feedback on the pros and cons of the home may be nonexistent or less than honest.
Negotiations. Homes for sale by owner leave a seller to do the negotiating. Negotiations often occur at multiple stages during the transaction from contract to close. This goes beyond the initial contract negotiations. Negotiations often re-open after the home inspection, termite inspection, appraisal, and final walk-thru. Realtors are trained and have experience with negotiations throughout the entire process. Let’s face it, the goal of negotiations is to keep the transaction moving.
The paperwork. Unless you have a background in contracts or law, the paperwork can be tricky. If the seller is not familiar with state real estate law and required paperwork, they open themselves up to lawsuits.
At Right Size Realty, we use marketing strategies to promote your home:
- Pricing the home competitively.
- Using a professional photographer to present the best features of your home.
- Listing the home on the Multiple Listing Service (MLS) only when it is ready to show. Jumping the gun may run potential buyers away.
- Creating a custom web site for your home and pushing it on Social Media platforms.
- Pushing out your home on REALTOR.com, Zillow, Trulia, and hundreds of other web site.
- Promoting your home to people in my personal database of 3,000 + clients.
If you would like a free market analysis of your home and feedback on prepping and staging your home, please feel free to contact us.
References:
Ericson, C. (August 8, 2017). Homes For Sale by Owner: 5 Reasons Why FSBO Sales Fail. National Association of Realtors. Retrieved from: https://www.realtor.com/advice/sell/why-fsbo-sales-fail/National Association of Realtors (NAR 2019). Highlights From the Profile of Home Buyers and Sellers. Retrieved from: https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers#fsbo