In Hampton Roads, our inventory is currently low which in effect cause our real estate market edging toward a seller’s market… just a little bit. As a result, we’ve seen a few sellers begin to list their homes as For Sale By Owner, or FSBO. This is certainly not the first time seller’s consider this option in order to save some money… but are they really saving anything? According to NAR statistics, 88% of buyers purchased their home through a real estate agent or broker. In fact, FSBOs accounted for only 8% of home sales in 2015 (2016 data not yet available). The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sales. If you are considering selling your home as a FSBO, please consider the following reasons as to why it is typically NOT the best decision for most sellers.
1. Marketing Challenges
89% of perspective buyers are searching online for their new home. Most agents have internet strategies, ad syndication, print media marketing, and networking streams for maximizing the exposure of their listings. As a FSBO seller, do you? If not, it will sit on the market longer… or not sell at all.
2. Legal Documents & Disclosures
Many years ago it was once much easier to complete a real estate transaction, especially when some deals were just one page in length! Today things are much different. With mandatory industry disclosures, plus local, state & federal regulations changing constantly, its no wonder FSBO sellers have dropped 8% since NAR started collecting this data in 1981. The last thing a seller wants is to get caught up in a legal bind due to “ignorance of the law.”
3. Property Showings & Security
Let’s be frank, are you prepared for the “tire kickers” wanting to see your house? Are you ready for the cancelled appointments or No-Shows? How about the after 11pm phone calls/texts wanting information that’s already on your FSBO listing? There’s also the caller who says, “Hey, I’m in front of your house, can I get a showing now?” You stated appointments only. You look out the window, and there are people walking around in your backyard assuming the house is vacant. If you’re fortunate, you schedule back to back showings on a Saturday afternoon, but folks shows up at the same time and you’re alone (folks upstairs, in the kitchen, the garage, and looking in your closets). A listing agent would take on these situations, so you don’t have to stare down that “potential buyer” standing in your family room just giving you the creeps!
4. Tough Negotiations
Sellers often think that putting a sign on the lawn, fielding phone calls, and agreeing to a price is all it takes to make a FSBO deal work. However, there are other players involved where seasoned negotiating skills will definitely be advantageous.
- Of course, the Buyer, who is looking for their best price
- The Buyer’s real estate agent who is representing only the Buyer’s best interest
- The Inspectors: Each home is different, so a Buyer may use some or all of the following inspectors that will all be looking to find something (home inspector, termite, swimming pool, roof, septic, water quality, etc.).
- The Buyer’s appraisal company, if the value is in question
5. Net More with an Agent
As previously mentioned, studies have shown that the typically FSBO homeowner sells their house for substantially LESS than those sold by a real estate professional. Perhaps it was not having access to sufficient comparable data, or truly knowing the market values. Maybe the seller was not technology or marketing savvy to maximize the buying pool and the house sat on the market way too long (or just didn’t sell). It could be that the Buyer’s side were better negotiators when it came agreeing to sale price or needed repairs. That doesn’t mean YOU can’t sell for more, it just shows that for MOST sellers, it doesn’t make sense to list FSBO.
Before taking on the many challenges that come from selling your house on your own, I’d like to suggest meeting with a seasoned professional and taking the time to consider all of your options? Please feel free to contact me.