FSBO? Oh No!
Last week, I was inspired to dig into the FSBO world to learn more about it. FSBO or For Sale By Owner homes are homes that are being sold to the general public without the representation of a licensed Real Estate Agent. They came to my attention because I watched a local panel of successful agents discussing their strategies. One of these inspiring women had sold 54 homes last year (only her second year of being an agent!), 24 of which were originally listed as FSBO. She contacted the sellers and talked to them about why their homes hadn’t sold and what she, as an agent, could offer. She inspired me to do my own research on the topic and I would like to share that with you below.
Let’s say you are considering selling your home, but the idea of paying someone a commission for something you are sure you can do yourself just doesn’t make sense to you.
Selling your home yourself sounds easy. You remember how it all went when you bought it. You know you have a great house, and you know what you think it is worth. It’ll be easy to sell it yourself, right? Well……the truth is, maybe you could, but it is going to take a lot more Time, Money up front and Stress than if I were to help.
Below are some things to consider before you decide:
1. Your Time
When you decide to sell on your own be prepared to invest a lot of your personal time. You will be spending your personal time marketing, scheduling showings, and just answering your phone (yes, you will HAVE to answer your phone), showing the property, entertaining lookie-loo’s, and answering questions from potential buyers you will never hear from again. And all that BEFORE you even get an offer. If you work with me, you only have to talk to me 😊 I can manage all the other interactions for you.
2. Your Costs
When you sell by owner, you’ll often end up spending more money up front on things like marketing and advertising materials and fees, access to websites, signage, and upgrades with no guarantee of any return. I have already paid for access to a variety of marketing platforms, can provide my own signage and have built up a network of other Realtors and home buyers that I bring with me. Additionally, I will also pay for your home to be professionally photographed and provide virtual tours at no additional cost to you.
If the home is not priced right, it may sit on the market for a longer period of time. That delay could cost you if you have already purchased another home, or if you have other financial obligations involved that require a quick sale. It could even prevent you from purchasing your next home.
Your costs could also increase if you fail to notice stipulations in the offer / sales contract submitted by your buyer. They may request that you pay for any of the following: property taxes, attorney fees, appraisals, inspections and even mortgage discount points to lower the BUYER’s interest rate. Having an agent to advocate for you during negotiations and to be familiar enough with the contracts to explain all the intricacies of the offers will SAVE you not only money but also possibly stress and heartache as well.
3. My Costs
I do not charge anything upfront to sell your home. If I were to spend thousands on marketing efforts, photography, and other means to get your home sold and I can’t sell it – I am simply out those thousands, not you! This is perhaps one of the greatest things about using an agent. It’s kind of like those old lawyer commercials – I don’t get paid, unless you get paid.
4. Your Net Profit
Choosing to sell without representation may save you that commission but doesn’t ALWAYS save you money. There have been studies done on which method can net you more, and the results have varied from a 13% higher return with an agent, to virtually no difference in the final net – but keep in mind, if the worst you can do with an agent is walk away from the transaction with the same amount of money and virtually none of the work and stress, where is the risk?
5. Perception to Potential Buyers
The perception of FSBOs is that they are not serious about selling their properties and are often just testing the market. They are often not taken seriously in the real estate community because there are too many owners tentatively testing. The tentative testers are often unresponsive and unreliable which contributes to the perception that most FSBOs are not “For Real” so they are quickly and easily dismissed. Another challenge to this perception is that it is not your full-time job to show your home. If you have a job, or other obligations, you may have trouble scheduling your showings, or even answering your phone. If it is too difficult to see your home, the potential buyers will be turned off.
6. Your Marketing Plan
You might be ready to post your home on Facebook and Craigslist a few times, but only licensed Real Estate agents can post on the ultimate home selling tool – the MLS. The multiple listing service can be accessed by the public and THOUSANDS of licensed real estate agents and is the BEST way to get your home listed on sites like Realtor.com, Zillow, and Trulia. In Tennessee, the public can view the listings on the MLS but cannot add listings. A large majority of home buyers begin their search ONLINE, and you want your home to be seen by as many buyers as possible to get the best price. There is a reason that most people choose to use an agent when buying and selling their homes. Listing on the MLS increases the homes exposure exponentially!
7. Liability
*This is a BIG one! When you sell your home without an agent, any mistakes you make can cost you. When you sell on your own, and are not familiar with the contracts, language or expectations, others could exploit even little mistakes to their advantage. Just like in court, someone represented by a Lawyer who is experienced and FAMILIAR with the law, will have a better outcome than someone who is represented by someone unfamiliar with the process. Additionally, in Real Estate contracts, there are standard timelines and language. If the timeline is not adhered to, or the meaning of certain language is not properly interpreted, it could cause the contract to expire and you could not only lose your sale, but you could also be liable for damages and be sued.
9. Pricing Your Home
Pricing your home incorrectly when you list it can be an incredibly impactful mistake and can greatly affect the time it spends on the market and your final sales price. Pricing too high will mean fewer people see it, resulting in fewer offers. Price it too low and buyers could assume that something is wrong with the property or that you are desperate to sell. More time spent on market will also signal to buyers that something is wrong and can ultimately mean less money upon final sale. As your Realtor I will use all the tools at my disposal and work with YOU to determine the best price to list your home.
10. Low Ballers
When you FSBO you will likely also attract investors, who see your lack of representation as a prime opportunity. What may seem like a high offer to you may be a steal to them. An experienced agent will understand this and negotiate the most money possible for you. This is one more instance of VALUE that your Realtor offers you, and how I earn my commission.
11. You STILL have Control
One of the reasons some FSBOs have chosen to do it themselves is that they feel it gives them more “control” of the sale of their home. I have news for you. If you work with me, YOU still control the sale of your home! I am there to support you, offer advice, knowledge, experience, to market your home and ADVOCATE for you in the negotiation of the sale- but I do NOT make decisions for you. Only you can do that.
Typically, Agent listed houses sell faster at a higher sale price for less investment and risk for the seller than FSBO. Could you be the exception? Perhaps, but what is the risk worth to you? Are you willing to wager your personal time, sanity and possibly livelihood?
There.
I have made my case.
I feel strongly that my services benefit you more than the percentage of the sale, and I hope I have the opportunity to prove that to you.
Give me a call when you are ready to SELL your home.