The common term for a homeowner selling their own home is FSBO (For Sale By Owner), but I prefer to call them Unrepresented Sellers. There are so many issues that need to be examined, and here is a short list to consider as you try to make the decision on whether or not you want to navigate these waters on your own:
- First and foremost: SAFETY – letting strangers into your home (prospective Buyer or criminal?)
- Mis-pricing your home; figuring out the best price (Sellers are often emotionally prejudiced; Buyers ultimately determine the value)
- Supplying reasonable comparables to a prospective Buyer
- Is the prospective Buyer qualified with a Lender (90% are NOT)
- If they ARE qualified, for how much?
- 65% of FSBO’s end up in court or arbitration (attorney’s fees can be astronomical)
- Inability to determine ‘lookers’ from Buyers
- Difficulty in selling a home when the owner is present during a showing, or
- Are you going to let strangers wander through your home unaccompanied?
- Following up on all showings so they don’t think you’re anxious (“But they said they LOVED my house, why haven’t they called?”)
- Legal liabilities for paperwork errors
- Knowing everything that needs to be done prior to marketing
- Staging your home so that it shows its best
- Frequent time away from work (or home or social schedules) on short notice
- People want to see it when THEY want to see it
- Writing a binding Contract
- Writing a Seller’s Property Disclosure
- Preparing a Counterproposal
- Depositing and documenting Earnest Money
- Writing a legal Lead-Based Paint Disclosure
- Tracking all dates and deadlines
- Ordering exact mortgage payoff
- Ordering Title Search
- Missed opportunities when away from home
- Finding potential Buyer$
- When you’re not home, you’re off the market
- Negotiating directly with the Buyer
- ‘Lookers’ stopping by at all hours
- Buyers want a lower price (a ‘steal deal’) because there’s no commission
- FSBO often means “desperate seller” and attracts bargain-hunter buyers
- Most Buyers don’t like to deal directly with the Seller
- Selling your home in YOUR time frame
- Figuring out the new (17 page) real estate contracts
- Writing real estate ads
- 99% of prospective Buyers go to the internet first – are you advertising everywhere you need to be?
- The longer it sits, the more people think there is something wrong with the house
- Holding an Open House
- Understanding and performing all necessary paperwork
- Making appointments to show your home
- Negotiating for the highest price
- Answering objections and criticism about your home without showing irritation
- Helping Buyers obtain financing
- Arranging for Appraisers
- Taking hours off to be there with an Inspector
- Negotiating inspection issues
- IF Buyer is part of the 90% of Buyers using a Realtor, you will be negotiating against a professional
- Finding a Title Company (and they charge more for closings of Unrepresented Sellers)
- Most FSBOs take longer to sell than if they had been listed by a professional
- Homes sell, on average, for over 20% more when a professional Realtor is used
It takes a long time for Realtors to not only get their license, but they are also required yearly to take continuing education classes, and to keep current with market trends and laws. Not only is the time that you have to invest to learn about all you need to know to sell your home just this one time going going to be daunting, it is also, quite likely, going to end up costing you a lot more than what you hoped to save by not having to pay a commission.
If you would like to discuss your options, with no high pressure or obligation, please contact Mimi Foster today with any questions I might be able to answer for you.
3 thoughts on “FSBO Advice”
Wow, I am sure most FSBOs would not understand what they have to go through. After reading this they can prepare themselves better in case they are foolish enough to decide to go by themselves.
Where did you find your stats on the 65% of FSBO end up in arbitration?
Dale – for years, one of the big real estate companies used the figure of ‘more than 50%.’ I always thought that was outrageous, so yesterday when I was writing my article, I had my assistant see if she could find the actual stats. She kept finding figures like 52%, 65%, 72%, etc., all from different years, all of them purportedly being NAR statistics, so I took the one that was middle of the road. I have had dozens of people ask that question, and I am trying to verify thru NAR what their current stats are. That SHOULD be an easy one to verify, but seems that all I have is all of the people online who say that is what NAR says :). I will see if I can find out thru NAR.