For Sale By Owner
July 13, 2020by Sarah Day
If you’re thinking about selling your home, the thought
might have crossed your mind to sell it yourself (For Sale By Owner or FSBO). Many
people think that by selling themselves, they will be able to net more money
because they can save on the agent fees. Some also feel that they are the most
knowledgeable about their own home and will be able to market it better
themselves. While I can understand the thought behind this, I’d like to share
why selling your home yourself doesn’t actually work out to be in your best
interest.
The reasons selling your home FSBO does not work as planned
can be summarized into three categories: exposure,
logistics and perception.
Exposure:
When selling a property, it is important to get it in front
of as many people as possible so that the pool of potential buyers is increased.
The importance of this is that your chances of a multiple offer situation, and
therefore getting full asking price or above, increases the more buyers that see
the home. As the owner, your marketing plan for the property likely includes
putting a “For Sale” sign in your front yard and maybe sharing it with your
friends on Facebook.
In a recent study, when asked where buyers actually found
the home they purchased, 50% reported finding it on the internet and 28%
reported finding it through their Real Estate Agent. Real Estate Agents
typically find available properties to show their buyers through our Multiple
Listing System. As a non-agent, you are not able to include your property in
this system which causes it to be at a disadvantage. In fact, only 7% of buyers
reported that they found their home from a yard sign. This means that by doing
a FSBO, you are excluding the majority of current buyers from seeing your home.
Studies have shown that 95% of buyers start their home
search online, and as mentioned earlier - 50% of buyers actually found the home
they purchased online. As a Real Estate Agent, I have an internet marketing
strategy that includes multiple platforms. This allows me to provide thousands
of views for each listing through both digital and social media ads. These can
be targeted by area; depending on the characteristics of your property, it can
be marketed locally, nationally or both.
Logistics:
In every real estate transaction there is an incredible
amount of paperwork and negotiations. Over the past 20+ years, the amount of
people doing FSBO has dropped from 19% down to 7%. Likely, the increased amount
of paperwork due to additional industry disclosures and regulations has been a
deterrent. These forms and disclosures are updated constantly by our local
Realtor® Association due to changes in the market and increased understanding
of issues. As agents, we are familiar with the forms and are up to date on any
changes. We can help our clients navigate through the complexities of the forms
in addition to the nitty gritty of actually filling them out.
A seller will likely have to negotiate with many individuals
in addition to the buyer throughout a transaction including but not limited to
the buyer’s agent, home inspector and appraiser. Not only can these
negotiations be difficult and time consuming, but all these other individuals
work for the buyer (or the buyer’s lender). When selling FSBO, you do not have
a designated advocate to help guide you through these negotiations and work on
your behalf.
Perception:
One of the reasons you want to sell yourself is to save
agent fees, right? Well most buyers who look at FSBO homes do so because they
also think they’ll save the agent fee and purchase the home for less than other
similar homes available. Only one of you can technically save the fee, and this
issue is often one of the difficult negotiations that take place. Many times,
to keep the deal together, the seller has to come down on the price so that
each side is saving some of that fee. When this happens and the buyer is
working with a buyer’s agent, the seller might also have to pay a cooperating
fee to the buyer’s agent. In this situation, the seller has not actually saved
anything and likely received less overall for the property. Not to mention,
they had to navigate through this process on their own.
In summary, selling your home FSBO is typically not in your
best interest. I always recommend working with a seller’s agent that you trust.
A good agent will work with you to achieve your real estate goals and be your
advocate through the process. They will also make sure they have an
understanding of what makes your home special and communicate that to potential
buyers through their marketing materials. If you have any questions about this,
please don’t hesitate to reach out!