To FSBO or not to FSBO
April 7, 2009
I wrote this article a while back and wanted to share with you the Top 6 reasons to NOT to sell privately. Sure, you’re thinking, yeah, yeah, she’s in real estate, of course she’s going to discourage selling a home privately.
My answer to that is yes, you’re right, with my first hand experience and education in real estate, it would be negligent to sell privately. You open yourself up to way too many risks and at the end of the day, I would rather go with an expert, and you should too.
For Sale By Owner Cartoon
Real Estate Professionals Are Insured
Similar to driving a vehicle, you need to be insured to protect yourself should you get involved an accident. The same goes with real estate. With the increase in number of real estate transactions, the number of mistakes and lawsuits generated from listing properties, financing, misinformation in advertising, permits, legal and title issues and so on, are also increasing. Mistakes and negligence made by an unrepresented homeowner can result in a costly affair, one that could have been avoided. An unrepresented seller who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.
Security and Safety
Selling a home, unfortunately, can give rise to serious security threats, especially when it’s done by someone who is inexperienced, and unprepared. The use of a Realtor provides another added benefit in that every showing or open house conducted by the listing or cooperating agent is recorded by the respective brokerage. It is the Real Estate Agent’s duty to his or her client to ensure that the home is being cared for in the absence of the owner and prospective buyers are being chaperoned by their agent.
Privately Listed Homes Are Poorly Marketed
Just like the fisherman who uses a trowel as opposed to a single line to ensure the best and most plentiful catch, a well marketed home on the market acts in a similar way. By attracting a large volume of potential buyers, a seller can bring forward more prospects and offers as opposed to accepting the first buyer that comes along. This is achieved by use of MLS (Multiple Listing Service), networking with other agents within the brokerage, institutional advertising, mass marketing via flyers, newspapers, email campaigns, etc.
An Unrepresented Seller Will Typically Overprice Their Home
This one may seem surprising to some. Why would a homeowner, who is trying to save on real estate costs, list their home above market value? The answer is simple; the seller believes that their home is worth more than comparable homes in the same neighbourhood. Overpricing a home is a sure way to deter potential buyers and the longer an unsold home is on the market; the more people will think there’s something wrong with it.
FSBOs Sell Their Homes for Less Money
According to a report conducted by the National Association of Realtors in 2006, homes that were sold with the help of a real estate professional in 2006 sold on average for 32% more than FSBO sales. The median FSBO selling price in 2006 was $187,200, compared with $247,000 for agent-assisted transactions.
Time is money
One of the most famous phrases coined by Benjamin Franklin in 1748 has become the mantra for those who value smart, well thought out choices in the business world including real estate. Sellers who choose to forgo representation and sell independently face time preparing for open houses, showings, and juggling consistent calls from potential buyers who may or may not be serious.
The inability to effectively prescreen for serious buyers, financially or otherwise, can be stressful on anyone. Sellers also face an emotional roller coaster when a prospective buyer views their home and frequently will offer sharp criticism as a strategy to cut down price, a licensed Realtor offers a buffer in order to reduce all of these unnecessary stresses.
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