Selling your home using the For-Sale-By-Owner (FSBO) method appeals to some sellers for two major reasons. The first is the potential to save money (i.e. avoid paying the commission fee to a Real Estate Agent). The second reason is that sellers think that selling a home is easy, and that a Real Estate Agent is not needed.
Unfortunately, sellers usually underestimate the amount of work listing, showing, and ultimately selling a house entails.
We’ve prepared a list of the top reasons why FSBO’s fail:
Lack of Time
Buyers want to see houses at times that are convenient to them. These times may not be convenient for you, especially if you work full time. Not being available to show the home to potential buyers will limit the amount of showings and cause the sale to take much longer.
Just putting a sign in your front yard doesn’t cut it anymore. Sellers need to create a strategy to actively market the home on multiple channels. Most FSBO sellers do not have the time or resources to market their home successfully.
Choosing the Wrong List Price
Sellers lack the experience, tools, and expertise to value the home accurately. Most often, sellers over-estimate the value and consequently, turn potential buyers away. Other times, sellers under-estimate the value and end up missing out on potential proceeds.
No Experience with Negotiation
When an offer from a potential buyer does come in, many FSBO sellers lose the deal in the negotiation stage due to inexperience, inflated expectations, and emotional attachments to the home.
Limited Pool of Buyers
The majority of buyers use real estate agents. Agents do not typically show their clients FSBO homes, because they work exclusively with homes listed through the MLS. In Addition, agents prefer to work with other professionals who are familiar with the home buying process, as opposed to unrealistic and inexperienced FSBO sellers.
No Screening Process
FSBO sellers do not prescreen potential buyers to see if they are preapproved. Showing the home to buyers that are not preapproved is a waste of time because there is no guarantee they can afford the home or qualify for a loan.
Some sellers are so determined to save money that they forgo a realtor, and instead, opt to do a For-Sale-By-Owner. While FSBO appears like a good option for the cost savings; the process is often more complex and time consuming than most sellers expect.