Not that long ago I did a blog post about For Sale By Owners and it amazes me how much owners do not understand about selling your home on your own.
This week, I had a client interested in a For Sale By Owner property and really wanted to see it. However, when doing basic research on the property, we realized there was no contact information. This made me realize that many FSBOs want to sell their property but don’t want to give out personal information, which is a big problem. Some Owners even pay a service to manage communications, and even those don’t work correctly.
Homeowners believe that by eliminating the agent, they will benefit by taking a greater percentage of the profit from the sale. However, this isn’t necessarily how things always turn out. How can a potential buyer reach you when there is no contact information out there?
For Sale By Owner – Pro’s
- No commission fee – Dallas/Fort Worth Market commission can be 6%, which on a $300,000 home would be $18,000. Before you get too excited, check out the cons because you will still have to pay the buyer’s agent commission.
- You Know Your Home Best – A realtor will try to remember all the features of your home.
- You’re In Control – You can pick the price, set showing times, and do all the negotiations.
- Free to Market Your Home – You can market your home any way you want to.
For Sale By Owners – Con’s
- Buyers or buyer’s agents having difficulty contacting the FSBO because the FSBO doesn’t put contact information in their advertising.
- Commission Fee – Even though you don’t have a listing agent, be prepared to pay at least the buyer’s agent commission of 3%.
- Risk of not selling your home – Because you don’t have all the resources to pull current market data, you may sell your home for a lot less than the market price or not at all.
- Marketing – While you have the freedom to market your home, remember only realtors can list on the Multiple Listing Service (MLS), which is the largest online tool used in real estate and is globally adopted for all the major websites. Realtors can also promote your home through ads, signs, email communication to other Realtors, and other methods.
- Documentation, timelines, and deadlines – FSBOs will need to educate themselves on the required documents, disclosures, timelines, and deadlines. Realtors are educated to know all the different documents, disclosures, and timelines required to have a successful transaction. The bottom line is that an FSBO is at a disadvantage.
- Qualified Buyers – It’s essential to have pre-approved buyers, and not knowing what to look for can cost you time and money.
- FSBO sign instead of an agent sign – Buyers may be thinking “bargain” or “distressed sale” for starters.
If you’re interested in listing your home as for sale by the owner, don’t be discouraged by these negative aspects. You need to go into the process informed and educated. Do your research, prepare for the pitfalls and roadblocks, and don’t spend dollars to save pennies.
If you will take on the challenges of selling your house on your own, do it with a reputable online service that will allow you to get the most exposure online. I highly recommend ForSaleByOwner.com.
Bottom line, if you have any concerns over a For Sale by Owner situation, schedule some time with me, a real estate professional, and at least see what I can offer.