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A Cautionary Tale for Selling Your Home on Your Own For Sale By Owner (FSBO)

For Sale By Owner (FSBO)Selling your home on your own sounds like a good idea – you can save some money and who knows your neighborhood better than you do?

One critical thing you MUST know about selling FBSO is who the potential buyers are for your home.

Let’s step back for a minute.

What do most people do when they want to buy a home?

Most start their search on the Internet, drive around on the weekends and visit a lot of Open Houses.

When they’re getting serious about buying, they contact a real estate agent, frequently someone referred to them by a friend or co-worker. Good agents will qualify the buyers before investing a lot of time in them. A good agent will make sure they are serious, have been pre-approved by a lender, and have a time line in mind that has them purchasing a home within the next month or two – essentially, as soon as a home that is a good match is located.

Other buyers don’t call an agent. Instead, they continue to search on the Internet, visit Open Houses, and some of them will also scour the local newspaper ads for homes for sale as FSBOs.

Let’s ask this question:

Why would a potential buyer forgo the services of a licensed real estate professional? Buyer’s agents are paid by the Seller, not the Buyer, so why would any buyer NOT want free services from a professional when those services come at no cost to them?

Those services include:

  1. Tailored listings, frequently pre-viewed by the agent for suitability to the client.
  2. Introductions to mortgage and inspections professionals who can help their clients through the home buying process.
  3. Guided tours with colorful printed maps highlighting areas that may be of interest to the buyers, etc.
  4. All of the paperwork prepared, reviewed, copied, emailed, delivered, etc. for their convenience.
  5. Quick access to market data about recent sales, so they know what they’ll need to pay for the type of property they want.
  6. Expert advice on the suitability of a property for the buyer’s intended purposes.

What kind of buyers wouldn’t be interested in these services?

Buyers who think they are going to get a good deal by buying from a seller that doesn’t have to pay a real estate commission, i.e. someone who is selling FSBO.

If you’re planning to FSBO, you might be wondering why this doesn’t work out perfectly – since you also hope to avoid paying a commission.

The answer is simple: these buyers know you aren’t paying a commission and they’re going to reduce the price they’re willing to pay for your property by the amount of commission you’re saving. You heard that right – they think THEY should benefit from that commission savings – the same money you expected to be putting in your OWN pocket by selling your home on your own.

Think about that – you’ve spent your own time, and own money to sell your home. You made the fliers, wrote the ads for the paper, set up accounts and paid to have your home listed on a bunch of FBSO web sites. You hosted multiple open houses, fielded dozens of phone calls from prospective buyers, cleaned up for their visits, and walked them through your home. You had the home appraised prior to offering it for sale so you KNOW what the home is worth in the local market. You planted signs in your yard and at the entrance to your neighborhood. You did all of the work to get your home sold FSBO so you could save the commission that you would have had to pay if you had hired a real estate agent to perform these services for you.

And now the buyers thinks that savings should be passed on to them.

None of this means that selling FSBO isn’t worth a try. It just means that the more you understand the likely thought processes of the buyers you’ll be seeing, the more you can be prepared to negotiate for what your home is really worth.

My name is Alison Shuman Masis, licensed Texas Realtor and co-owner of a real estate appraisal company, Appraisal IQ, in Austin Texas.

http://theappraisaliq.com

photo taken from justnewlistings.com





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