For Sale by Owner
why it may not be such a good idea
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FSBO is (sometimes FISBO) is shorthand for "For Sale By Owner" and is pronounced fizbo. It
is normally used to describe property being sold by owners who don't use a real estate
company.
“I have Internet access and can put up a For Sale By Owner” sign, so why do I need a Real
Estate agent?
Results show that owners generally do not do well selling their own property. For those that
succeed (approx 15% in a good market) they:
- run the risk of over or undervaluing their property
- are surprised at how difficult it is screening potential buyers from time wasters
- do not account for wide reach of the MLS (multiple listing system)
- are unprepared for the volume of required legal documents
- have difficulty in closing on potential deals.
The principal reason that owners want to sell their own property is to save the commission.
However, Buyers want a deal... so, although Sellers may want to keep their commission the
sellers want a discount - NET RESULT - no gain.
So what’s the problem? The top 10 Reasons Why Owners Should Not Sell Their Own
Property are:
1. Qualifying Inexperience - Generally an owner, does not have the experience in qualifying
buyers to buy a property.
2. “Tire kickers” - Homeowner advertising and drive by’s may bring many candidates who will
waste the owner's time and perhaps block a real prospect. Also note that you’re inviting
undesirables in to your home - The "For Sale By Owner" sign in the yard is an invitation to
anyone to ask to see the home.
3. Difficulty in Negotiations – Owner’s, inexperienced in real estate transactions, will encounter
difficulties in negotiations on concessions, price, fixtures, transaction dates and other matters.
4. Inexperience in handling Objections – Homeowners are not prepared to address objections
from prospects. Thus, when major objections of any type are raised the owner does not know
how to proceed properly.
5. Problems on Financing - Even though the buyer is theoretically supposed to secure their own
financing, the selling broker normally arranges financing for the purchase of a home.
6. Lack of Prospect Sources - The more exposure a home has to qualified buyers, the more
likely there will be a quicker and more favorable sale. Most owners have very limited sources
for prospects.
7. Owner Expense - The owner may incur considerable expense in even succeeding in selling
his home at a somewhat reduced price. Such expenses can include newspaper advertising,
cost of sale sign, legal fees, etc.
8. Right pricing. The buyer wants a bargain, and the seller wants a good deal. In the end,
providing a comprehensive market analysis is the answer. A homeowner is not usually in a
good position to prepare and provide a credible analysis.
9. Under-pricing – As dangerous as over-pricing is, owners are also likely to under price their
properties. Owners are not familiar with often rapidly changing market conditions, and the
characteristics of the supply and demand for a particular type homes in particular locations, as
is the experienced professional broker.
10. Legal paperwork. One of the major reasons that selling a home yourself is difficult is that
correctly prepared documentation can be onerous. A homeowner will normally need to hire a
Lawyer to prepare the documents.
In the end, if you want professional work, you call a professional. So call in the professionals at
Village Realty.