Top Challenges Faced While Listing Your Home For Sale by Owner (FSBO)
At first glance, listing your home For Sale By Owner (FSBO) sounds like a great idea, since you think that you may save on commission and have the whole process "under control".
Below are some of many challenges that FSBO sellers will encounter:
1. Statistics shows that less than 1% of homes are sold privatelly (and mostly between family and friends), and 99% of homes are listed and sold through real estate agents on MLS. Can you afford just 1% chanse of getting your home sold?
2. Obtaining the real name and phone number of everyone who comes to you is often difficult. Buyers are often not willing to provide strangers with accurate information about who they are and what they can afford.
3. Buyers are reluctant to discuss their finances with the other party. Most sellers fail to ask for a credit report, source of down payment, as well as other information critical to determining the buyers’ credit worthiness.
4. By showing your property to whoever calls on your ad or your signs, you will often waste valuable time with unqualified prospects.
5. It is difficult to determine the tastes and requirements of a buyer if you have not had the opportunity to fully qualify them beforehand.
6. Buyers normally will not discuss the disadvantages or shortcomings they feel are present in your property. Thus, because you do not know what their objections are, it is impossible to overcome them.
7. If you have to call the buyer back yourself, you are weakening your bargaining position and may give them the impression that you are desperate to sell. A seller who seems anxious usually receives less money for their home.
8. Buyers who know you that are selling 'For Sale by Owner', almost always deduct the agent's commission off your asking price. You are essentially viewed as a 'wholesaler' and thus, buyers expect to pay a discounted 'wholesale price', rather than a full 'retail price'.
9. For most sellers, their home is their most valuable possession. Are you willing to risk having your most valuable possession sold by someone other than a well-trained, seasoned professional?
10. Do you have the legal expertise to personally prepare a valid and fully enforceable agreement? Even if you use a lawyer to draft a contact for you, they will not negotiate all the terms and conditions for you with the other party. In our market 1 out of 2 contracts fall apart. For FSBO sales it's even worse.
11. Almost every purchaser buys by comparison and looks at 10-15 homes before makig the final decision. Since most homes are listed with real estate agents, don't you think that the buyer will eventually meet an agent who will convince them that they need one?
12. Even if you offer buyer's agent commission, why would you pay someone to negotiate agains yourself? It's like going to the court unrepresented against someone represented by a stong lawyer and you even having to pay for them. Don't you want to have a prefessional working for you and protecting the equity in your home?
13. Lack of broad market exposure leads to having to accept 15-20% less on the sale. Does it make sense to lose that much by trying to save 2-3% on a professional's commission?
14. Security, security, security. Strangers in your home can be unsettling if they are unaccompanied by a professional real estate agent.
15. Being able to adjust market position in a timely manner based on new competition and absorption rate is crutial in today's market. Do you have the infomration and expertise to make that decision?
16. Buying another home contingent on the sale of your current home 'by Owner' is nearly impossible.
Over the past 16+ years, Alex helped hundreds of sellers who were initially treying to sell privately, but ended up hiring him to sell faster and for more money than if they were going to get on their own.
Below are some of many challenges that FSBO sellers will encounter:
1. Statistics shows that less than 1% of homes are sold privatelly (and mostly between family and friends), and 99% of homes are listed and sold through real estate agents on MLS. Can you afford just 1% chanse of getting your home sold?
2. Obtaining the real name and phone number of everyone who comes to you is often difficult. Buyers are often not willing to provide strangers with accurate information about who they are and what they can afford.
3. Buyers are reluctant to discuss their finances with the other party. Most sellers fail to ask for a credit report, source of down payment, as well as other information critical to determining the buyers’ credit worthiness.
4. By showing your property to whoever calls on your ad or your signs, you will often waste valuable time with unqualified prospects.
5. It is difficult to determine the tastes and requirements of a buyer if you have not had the opportunity to fully qualify them beforehand.
6. Buyers normally will not discuss the disadvantages or shortcomings they feel are present in your property. Thus, because you do not know what their objections are, it is impossible to overcome them.
7. If you have to call the buyer back yourself, you are weakening your bargaining position and may give them the impression that you are desperate to sell. A seller who seems anxious usually receives less money for their home.
8. Buyers who know you that are selling 'For Sale by Owner', almost always deduct the agent's commission off your asking price. You are essentially viewed as a 'wholesaler' and thus, buyers expect to pay a discounted 'wholesale price', rather than a full 'retail price'.
9. For most sellers, their home is their most valuable possession. Are you willing to risk having your most valuable possession sold by someone other than a well-trained, seasoned professional?
10. Do you have the legal expertise to personally prepare a valid and fully enforceable agreement? Even if you use a lawyer to draft a contact for you, they will not negotiate all the terms and conditions for you with the other party. In our market 1 out of 2 contracts fall apart. For FSBO sales it's even worse.
11. Almost every purchaser buys by comparison and looks at 10-15 homes before makig the final decision. Since most homes are listed with real estate agents, don't you think that the buyer will eventually meet an agent who will convince them that they need one?
12. Even if you offer buyer's agent commission, why would you pay someone to negotiate agains yourself? It's like going to the court unrepresented against someone represented by a stong lawyer and you even having to pay for them. Don't you want to have a prefessional working for you and protecting the equity in your home?
13. Lack of broad market exposure leads to having to accept 15-20% less on the sale. Does it make sense to lose that much by trying to save 2-3% on a professional's commission?
14. Security, security, security. Strangers in your home can be unsettling if they are unaccompanied by a professional real estate agent.
15. Being able to adjust market position in a timely manner based on new competition and absorption rate is crutial in today's market. Do you have the infomration and expertise to make that decision?
16. Buying another home contingent on the sale of your current home 'by Owner' is nearly impossible.
Over the past 16+ years, Alex helped hundreds of sellers who were initially treying to sell privately, but ended up hiring him to sell faster and for more money than if they were going to get on their own.
