Many home sellers looking to boost their revenue may consider listing their home as For Sale By Owner (FSBO). The logic, usually, is that not having to cough up an agent’s commission will be worth the headache and hassle. That logic is, more often than not, fatally flawed. There are few reasons for selling as a FSBO listing. And there are many reasons why not FSBO.
Got a potential client on the fence? Tell them:
One major thing home sellers notoriously underestimate is the cost of their time. Selling a home takes work. That work requires time. Real man hours. How much is your time worth? Put an actual dollar amount on it. That commission probably doesn’t look too bad now, does it? It might even look like a total bargain.
While we’re on the subject of time, let’s talk about wasting it. Remember that figure you came up with? Imagine throwing it away every time an unqualified buyer is lost, making you start from the beginning. Those unqualified buyers are likely to include a lot of ‘lookers’ who are interested in nosing through your house more than placing an offer. On the other hand, hiring a qualified agent means your realtor will be brining financially qualified people through your home, who are interested in the type of property you’re selling and the location. The leads will be better, and you won’t have to stop what you’re doing to show them your property.
Pricing can be particularly challenging for the FSBO own. Unlike brokers and agents, home owners typically do not have the resources to establish legitimate comp properties that adequately justify an asking price. What’s more, the owner/seller is not likely to understand how to predict appreciation or value. Underpricing, surprisingly, is equally common.
When problems arise—and they often do—the best help usually comes from experience. But FSBO sellers are typically inexperienced in real estate transactions, and may encounter significant negotiation setbacks on price, concessions, objections and legal issues. If major objections are raised, the home owner is put in the position of having to defend his home, and is rarely able to be objective.
More issues to consider include a lack of buyer exposure, unknown or unpredictable marketing/advertising costs, lack of a good follow up system, safety, liability, and market age.
Understanding the value a quality real estate professional brings to the home selling process is really important. Do your homework, find someone you can trust, and rest assured that commission is well spent and well earned.