For Sale By Owner: 3 Reasons Not to Go This Route
We’ve been in the real estate business a long time, and while prospective buyers and sellers who come to us are ready to work with an agent, from time to time we are asked, “What are your thoughts on for sale by owner? Won’t I save/get more money if I go that route?” We take a deep breath and offer our best advice. We understand the desire for DIY on many levels, but (in our humble opinion) home buying and selling is a detailed science that requires extensive experience and expertise to ensure the process runs as seamlessly as possible.
Here are 3 reasons we can offer to NOT go the “For Sale By Owner/FSBO” route:
1. Be Prepared for Mountains of Paperwork
The amount of paperwork that is required with going the FSBO route has become quite involved, and has increased dramatically due to mandatory industry disclosures and regulations. This is a primary reason we’ve seen a major dip in FSBOing from 19% to 9% over the past 20 years, and for good reason. Not only is it cumbersome, but you don’t want to risk making a major mistake when lost in the sea of all that paperwork!
2. Negotiations Can Be a Nightmare
Selling a home requires a lot of negotiating, which can be extremely stressful and taxing if you’re inexperienced. You’ll need to be prepared for an array of personality types who will throw all kinds of scenarios your way–and you’ll need to have the (right) answers! Here’s a short list of the types of people you need to prepare yourself for:
- Buyers who are looking for the best deal possible on their home purchase, and they’re prepared to fight for it!
- The buyer’s agent, whose primary interest is for the best interest of the buyer.
- Home inspection companies who are working for the buyer and are therefore more prone to finding issues and problems with the house, which is in favor of the buyer, not you.
- You may also have to deal with the buyer’s attorney (depends on which state you’re in).
- If there is a question of value, you’ll also be dealing with an appraiser.
3. You Risk Lower Exposure to a Broader Audience
The buying audience is online. Period. Studies show that 43% of homes (purchased recently) were discovered on the internet, while a mere 9% were found by seeing a roadside sign, and only 1% reported having found their home from a newspaper ad. To add to this point of buyers being primarily online, another recent study revealed that over 88% of people are searching the internet for their future home. Real estate agents have access to ensuring that their clients are listed in the appropriate real estate channels with maximum exposure to reach their intended buying audience. In addition, agents put a lot of work into strategically marketing their clients homes correctly–everything from placement, to beautiful photo’s and descriptions, pricing, and so much more. Be honest with yourself and ask, “Am I able to do all of this, effectively?”
Bottom line is that you’re hoping to make the most money you can on the sale of your home. Sure there are potential bumps in the road, but a good, reputable real estate agent can navigate these issues to help you through it. Selling and buying a home is a subjective experience, often filled with a great deal of emotion and stress. Our best advice is to do your research and at least meet with a well-recommended agent before going the FSBO route. You might find it’s absolutely worth it!
If this blog was of interest you might also want to read, “Is Now a Good Time to Sell Your Home?”