Typically, we start to see more and more FSBO, or For Sale By Owner signs during a seller’s market. This is because homeowners don’t want to pay commission so they can maximize their profits… or at least that is the idea. According to the National Association of Realtors, the average sales price of a FSBO home was $185,000, while homes that were represented by a Real Estate Agent had an average sales price of $245,000. These statistics prove that selling your home with a Realtor yields more profit which is enough to cover their commission plus put more money in your pocket.
So why is selling a home so difficult and where do FSBO sales go wrong?
Marketing is Harder than it Looks
Nowadays, buyers almost always start looking for their new place to call home online. Typically, FSBO sellers are unlikely to get the exposure they need because they will have a very limited online presence. When a Realtor inputs your home into MLS (Multiple Listing Service), it is fed out to 3rd party websites like Realtor.com, Trulia, and other Broker websites. Plus, Realtors promote your listing on social media to their other Realtor friends who could have a potential buyer. So, sticking a sign in your yard or trying to do a DIY social media marketing technique hardly has the same effect.
Pricing Could Be Wrong
When a FSBO seller goes to price their home, they are normally basing their number off of one or two things. The first is an online assessment tool like the infamous Zestiment, lovingly brought to us by the incredibly inaccurate website, Zillow. When you use an online assessment tool, it is like bringing your doctor a printout of your WebMD search with your symptoms and possible cures.
Another way FSBO sellers may base their price is by using their neighbor’s house that sold. These two methods can often lead to a price that is severely above or below the actual market value of your home. A Realtor is trained to provide an accurate home value that is right in the sweet spot. The goal is to not price your home too high to turn off buyers and not too low causing you are losing out on profits. Realtors use their knowledge of the neighborhood and recently sold homes in the area to give you an accurate price, which is something that FSBO sellers often do not have.
Scheduling Showings
FSBO sellers can drastically under estimate the amount of work that goes into setting up showings. Plus, they have to deal with nosy neighbors with no intentions of buying and real estate sharks. These sharks target FSBO sellers and, quickly, swamp their phones with calls. These investor sharks are looking to save on the same commission FSBO sellers are, and often give an incredibly low offer. Often times, these lead to a no sale, but, if your home has been sitting on the market for a long time, you might just consider it.
The Mountains of Paperwork
The closing process can require more than 20 pages of complicated paperwork. This includes the contract and addendums that are designed to cover all of the situations that could go wrong. For example, if your home was built before 1978, then, you are required to have your buyers sign a lead-based paint disclosure. Same goes for if you live in a neighborhood with an HOA. So, unless you have a background in dealing with contracts or law, you may want to leave this up to the pros. A Realtor will take care of all of this for you and ensure that all the proper documentation is signed to avoid future liability.
