FSBO Woes: Why It's So Hard to Sell Your Own Home.
For most people, a for-sale-by-owner transaction simply isn't in the cards.
Granted,
some people are able to sell their own homes without the services of a
real estate agent. Some of these successful do-it-yourselfers are very
experienced home sellers. Others are transferring ownership of their
home to a child, a coworker or a tenant who's already living in the
home. These circumstances are the exception, not the norm, however. For
most people, a for-sale-by-owner (FSBO) transaction simply isn't in the
cards. Here are five reasons why.
1. FSBOs can't list their
home in the MLS. FSBOs aren't permitted to put their home in the
multiple listing service (MLS) because these industry membership
organizations are open only to licensed real estate brokers and agents.
FSBOs are also locked out of many home search engines and Web sites,
including the gigantic Realtor.com. Sure, a determined FSBO can put a
for-sale sign in his or her front yard and run a tiny advertisement in
the local newspaper, but the home won't receive nearly as much exposure
as it would through the MLS. In addition to the MLS, there are tenths of other sites that are extremely effective and that, collectively, permit the desired outcome.
2. Agents won't show FSBO
homes. In a typical home sale, the buyer's agent receives a percentage
of the commission that the seller pays the listing agent. Without a
listing agreement, there's no guarantee that the buyer's agent will be
compensated for his or her services, unless the buyer has signed a
buyer's brokerage agreement that specifically provides for such
compensation. Even if a FSBO offers to pay the buyer's side of the
commission, most agents won't want to go through a transaction with an
unsophisticated self-represented seller across the table. That means
the pool of potential buyers for FSBO homes is limited primarily to
unrepresented and probably unqualified prospects.
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3. FSBOs usually overprice
their home. Like most homeowners, most FSBOs honestly believe their own
home is worth more than comparable homes in the same neighborhood.
Usually, they're wrong. A real estate agent can provide an update on
market conditions, an assessment of the likely selling price of the
home and tips for improving the home's buyer appeal. Overpricing a
for-sale home is a sure way to deter potential buyers.
4. Buyers will feel
intimidated. Potential buyers will spend less time in a for-sale home
if the owner is present during the showing, and they'll be shy about
discussing its pluses and minuses with their own agent if the owner is
within earshot. Buyers will also be less inclined to make an offer if
they know they'll be negotiating directly with the seller. Having an
agent on each side creates an effective emotional buffer between the
seller and buyer.
5. FSBOs are likely to
stumble into legal trouble. Real estate transactions are fraught with
potential liability for unwary sellers, particularly in states that
have extensive disclosure requirements (such as California). A FSBO who
overlooks even one required form or legally mandated disclosure could
face a protracted and expensive buyer lawsuit after the transaction
closes.
For more details, access www.ExtraRealtyPR.com