Can you actually be losing
money when you think you're saving money? Yes, and it typically
happens
because FSBO (For Sale By Owner) sellers unknowingly “leave
money on the table”… equivalent to “giving
it away”. This unfortunate scenario can take many forms,
but is frequently caused by sellers (a) having underestimated
their property's value, and selling below fair market value
(b) having overpriced their property and squandering time & money
trying to find someone willing to pay above fair market value
(which rarely happens), (c) not having access to massive pools
of potential buyers via mechanisms like MLS (Multiple Listing
Service), and Realtor ® referral networks, (d) lacking
the marketing expertise and/or exposure mechanisms needed to
let the world know you exist, or (e) lacking the necessary
negotiation skills to establish the best possible contractual
terms for all parties while obtaining the best possible price
for the seller. There are many more ways in which FSBO sellers
have notoriously given their buyers “cash gifts” at
closing, but suffice it to say that it's the rule rather than
the exception, by far, and the sad part is that they usually
don't even know it happened, or how much was sacrificed.
We've all heard stories about lucky homeowners
placing a “For
Sale” sign in the yard, opening their front door on a
Sunday afternoon and receiving a full-price offer at the end
of the day. If you're thinking of selling your home, you might
be lured by these successful FSBO stories. After all, you reason,
why pay commission to a Realtor®, when you could keep the
profits all to yourself? But the reality of the FSBO process
is far less rosy than you might think.
-
Advertising
works best when
it's run frequently over a period of time. Most FSBO
sellers, however, try to
cut
costs by running a single ad here and there,
usually not often enough
to attract the attention of many buyers. The Realtor®,
on the other hand, advertises their listings often in print media,
in electronic media, and in the MLS, which is only available
to licensed Realtors® and
brokers.
-
Most
homeowners believe their house is worth more than it really
is. Even if you study comparable homes and
try to discern the value of yours, it's
still
a time-consuming process and an amateur's guess. If it's not competitively
priced, many prospects will simply bypass your home. If you later
lower the price, you'll have to advertise again, at more
cost to you.
-
Over
the years,
we can become accustomed to our home's imperfections,
to the point
where we're not really aware of them anymore. A Realtor® can
see a house the way a
prospective buyer would. He or she may suggest some
minor
improvements, like fresh
paint, new flooring, some minor but very visible repairs,
or furniture arrangements that could help your home
sell faster
and for more
money.
-
Realtors® will
qualify prospects
before showing them a home. A FSBO seller is at the
mercy of everyone who calls or knocks on the door.
You
may spend
valuable time giving
free tours to curiosity seekers or prospects who cannot
afford your house. Worse yet, you could be making yourself
and
your property
vulnerable to possible
hidden motives. This is not the place to convey such
horror stories, but they are more commonplace than
you might think.
-
Prospects
often shy
away from FSBO homes. Some fear legal problems because
of the intricate paperwork involved. Some may worry
the seller
is not
disclosing everything
about the home's condition. Others may simply
feel uncomfortable
negotiating directly
with the owner. FSBO sellers face the same disclosure
requirements as everyone
else. Working directly with buyers (bypassing Realtors®)
does not remove any
obligations, risks or potential liability; the courts
won't care whether you were a FSBO seller or not.
-
Many
FSBO stories, unfortunately, don't have happy endings. After a considerable
outlay of time and money, sellers often list with an agent in order
to get their house sold. Unless you have a sure buyer – a cousin
or coworker, for instance – consider listing your house with
a Realtor ® right away before it grows market-weary, and before
you expend time & money that can never be recovered.
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