In a “Seller’s Market” many homeowners consider attempting to For Sale By Owner (FSBO) their own homes. It’s a risky move in any market, but especially in a market that is moving at the speed of money.
If you’ve considered or are considering selling your home in the near future, take a look at the 5 pitfalls For Sale By Owners typically encounter that cause the most trouble or even kill the deal.
1. Lack of Exposure to Buyers
REALTOR.com statistics tell us that 92% of all home buyers search for their new home online. Only 18% of buyers actually look in newspapers or other printed real estate guides or publications. For Sale By Owner sellers will have limited access to the multitudes of online home sites that are directly tied to the MLS. Only licensed Realtors® are allowed access to the MLS. The MLS is EVERYTHING when it comes to selling homes. It’s where hungry home buyers turn for their daily home hunt.
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.
2. Negotiating with EVERYONE
Consider this: An experience Realtor® handles all the negotiating when it comes time. By the way, it’s ALWAYS time to negotiate during the sell of a home and here’s just a small list of everyone that will want to negotiate during the transaction:
- the BUYER who wants the best deal
- the BUYER’S AGENT who represent the best interest of only their client, not you Mr. FSBO
- some BUYER’S opt to utilize a Real Estate ATTORNEY (that’s always fun)
- the HOME INSPECTOR hired by the buyer, and will always find things that will be presented to the buyer as needed repairs/issues
- the Buyer’s APPRAISER often needs a good swift kick in the pants when there’s a question of value
- the Buyer’s LENDER/BANK always has a say in the purchase and often time require repairs, but not all repairs should be paid for by the seller
Would you hire your dry cleaner to take your wedding photographs? Or your Accountant to perform a root canal? NO! Of course not! Working with an experienced Realtor® is equal to working with any other specialized professional that you use to deliver value to the things that are important in your life. Realtors® have an extended network of professional that they partner with to deliver a full-scope service, such a professional photographers, landscapers, handymen, roofers, Escrow & Title professionals, as well as trusted lenders. FSBO tend to lose money on piecing together a team that actually isn’t a team at all.
4. The Paperwork
The legal paperwork involved in the sell of a property in Texas has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years. Paperwork is overwhelming and not knowing which forms are the correct ones and what’s required is a major pit fall. Many FSBO find themselves chasing signatures for all parties and repeatedly switching forms. Not to mention, just because it’s a promulgated form doesn’t mean it’s easy to understand. Did I mention how time consuming all of this can be?
5. FSBO’s Net Less $$$ Profit
Oh, sure you’re saving the Listing Agent commission when you go FSBO but you’re losing money else where. According to the National Association of Realtor’s 2013 Profile of Home Buyers and Sellers, the average FSBO sales price was $174,900, while the average price for a home represented by an agent was $215,000, a difference of $40,100. While this doesn’t mean that an Realtor® will automatically increase a sale by $40k, but it does mean that working with a professional will yield home sellers more profit at closing!
Before you decide to take on the challenges of selling your house on your own, meet with a local Realtor® and find the one that you feel has the best experience to maximize your profits while saving you time and headaches!