For sale by owner homes (FSBO) are homes that, as the name implies, are sold directly from the homeowner. When a homeowner sells directly to a buyer, no agent is involved, which is expected to save the seller a hefty commission fee. But as the saying goes, if it sounds too good to be true, that’s because it usually is. Now, this doesn’t mean that there aren’t some great, safe FSBO choices out there—it just means that those transactions are the exception and not the rule. Here are a few common reasons why FSBO homes end up failing for sellers:
Lacks a Selling Strategy
Pricing your property is one of the most important actions any seller can take. How you price your home can make or break your success on the market. When you don’t have a strategy, chances are you’ll make a pricing flop. Believe it or not, it’s possible for you to price your home too high or too low.
Pricing your home is about so much more than checking out comparable homes and sticking a price tag on it—the fact is, sellers have access to much more market data than the average person, and home prices are based on several factors. It’s not just about local home prices. Values change often, and realtors know when outside factors are likely to influence a home value later down the line. Furthermore, closing prices aren’t publicly disclosed, which means there’s no real, accurate way to make comparisons to nearby homes.
Too Many Biases
There’s no doubt about it: you’re biased about your own home. You remember what it looked like when you bought it, and you see the growth and the potential. What someone might consider a “flaw,” you’ve lived with. Buyer flaws might not even be flaws from your vantage point at all. In order to truly make your home listing-ready, you’ll need a professional, third opinion. Not from your friend or from your relative, but from someone who’s helped sell dozens of local homes and who knows your market inside and out. After all, you want your home to deliver the best possible impression, and to get the best bang for your buck. A professional real estate will make effective suggestions and help you stage your home in the best way possible.
Lack of Marketing Expertise
It may not seem like it to the average person, but there’s plenty of marketing associated with home selling, and the typical seller going the FSBO route lacks the appropriate knowledge for various marketing channels. Even if you do all the promotional things you believe will help, such as posting on Facebook forums and putting up for sales signs, the fact is, research shows this isn’t how most people choose to find their homes.
Even if you purchase a flat fee listing to get your home up on the MLS (the listing service many people use to sell and buy homes on different platforms), your home still needs to be marketed. Every seller can benefit from a targeted marketing strategy that maximizes exposure. Professional sellers know what channels to go through and how to angle your listing to appeal to your target demographic.
No Real Estate Knowledge
Because you’ve already purchased a home, you may believe you’re qualified to guide yourself through the selling process. But without an agent, real estate jargon can be very complex, and navigating through the stack of paperwork you’ll have to sort through can easily discourage you—or even worse, put you in a bad position legally later down the line. The last thing you want to do is sign off on paperwork that you aren’t completely confident about.
An agent will guide you through the unknown, explaining complicated documents in a way that makes sense to you, and ultimately mitigating your risks as a seller. They’re also trained to negotiate terms in your contracts to put you in the most favorable position, whereas an independent seller might be taken advantage of and lose quite a chunk of money.
Selling a home is a serious time commitment, and often, it’s a much bigger time commitment than the seller originally predicted. You’ll have to deal with approvals, home improvements, repairs, staging, marketing, inspections, repairs, and more. With so many items on your to-do list, selling your home becomes a full-time job that can easily detract from your job or other areas of your life. Working with a real estate agent can help you manage your time much better—they handle the heavy lifting so that you can go about your daily routine with minimal interruptions.