Recently there has been a growing interest in For Sale By Owner aka FSBO. Most homeowners want to protect their equity in their home and look to selling FSBO as an alternative to using a professional real estate agent to sell their property. Sellers consider this type of sale without really educating themselves before following this type of sales path.
Sellers when trying to educate themselves for a FSBO use the internet to try and understand how most real estate professionals market and sell real estate in their area. There are many products available to sellers online who wish to do a FSBO but these e-books and online tutorials do not explain the pitfalls associated with this type of real estate sale.
There is more to selling a home than putting a sign in the yard and marketing the property online or in your local newspaper. There are certain legalities that most homeowners are not aware of that if performed incorrectly could result in the homeowner being sued. Some of these factors stem to proper wording of the contract to requesting certain inspections and disclosing factors related to the property. These factors alone however can be resolved with the use of an attorney and title company, but the primary factors that a seller wishing to sell their property as a FSBO go deeper than contractual and marketing.
There are social conceptions that a FSBO must be able to address and most homeowners as well as some real estate agents do not know how to address these issues. Most buyers when considering buying a FSBO feel since the property is not listed with a real estate agent they may not have any recourse against a seller if handled as a FSBO and something goes wrong with the purchase of the home.
Another social conception when considering whether to buy a FSBO is, since the home isn’t listed with a real estate agent, the seller isn’t paying a listing fee, so therefore we can come in with a low offer and the seller should accept it. This is a major problem with FSBO. Buyers always feel that if a seller isn’t paying commission to a Realtor, then the asking price of the home must be the same as if it was listed so therefore if there is a savings with the listing fee I as the buyer can offer lower and have my offer accepted.
Let’s also not forget that a FSBO will never have the marketing audience that a good real estate agent will have. This in its self can cost the FSBO several buyers and possibly cost the seller to lose thousands of dollars in the sales price. The loss in sales price can occur by attracting fewer buyers and the time the home is on the market to be sold. Also the FSBO must be prepared to answer questions related to financing, title and insurance questions that arise most of the time when a buyer previews your home.
Other factors that must be considered are, how available are you as the FSBO going to be when a buyer wants to see your property. Most of us have 9 to 5 jobs and can’t just jump up and leave our office when a buyer calls and wants to see the property. When a buyer calls you most of the time they want to see this property right now or in a short amount of time. If you are not able to assist that buyer on their terms right then, you most likely have just lost a prospective buyer who will move on to the next home they wish to preview and forget all about your home.
Real Estate market conditions also play a factor when trying to sell as a FSBO. Take the Las Vegas real estate housing market as a good example. Back in the first quarter of 2004, homes for sale in Las Vegas were selling the same day they were listed in the Las Vegas Multiple Listing Service with multiple offers on each home. During this time period in Las Vegas, all you had to do was throw a sign in the yard and place the home in the Multiple Listing Service and your home sold that day and usually 10 percent or more above appraisal value.
This was due to several factors, but primarily due to supply and demand. In this type of real estate market a FSBO can sell their home and make a good profit, but you can count on one hand these types of markets within the United States.
So before you choose to sell your home as a FSBO, be sure you educate yourself before making this type of decision. The money you believe you may be saving can cost you thousands more if you choose the wrong path to sell your home.
