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For Sale By Owner
Welcome! Being a real estate agent, you just know you're going to get the negatives about FSBO from me. What did you expect? The fact is, about 16% of Sellers successfully sell their home FSBO. But how many would do it again? What are the risks, the problems, the challenges? I hope you can do your homework using this
information and decide if it's really worth it to sell your home yourself. Only you can make that decision! As always, if you have any questions, please feel free to contact us. Real estate is our business, and it's all that we do!
Why Use A Realtor? There are things you may not know about us...
Important Considerations for For Sale By Owners
Security
How do you feel about strangers coming through your home? People you don't know looking, seeing your possessions, being in your home with no supervision other than yourself? While we would like to think that the people calling on FSBO ads and signs are honest people looking for a new home, the fact is there are less desirable people out there. Isn't this a perfect opportunity for them to get into someone's home? To evaluate your property, your security, your belongings? So you'll just screen who you feel comfortable with and who you don't, right? Wrong! If you pick and choose who you will let view your home and who you won't, chances are you'll be breaking Fair Housing laws and very well could end up getting sued and/or fined substantially (up to $50,000)! The government even hires people to go out and evaluate Fair Housing practices, so be sure you are aware of the laws, and don't break them. Realtors are required to take Fair Housing continuing education every license period to insure we know what is ok and what isn't. (See these articles: Fair Housing - What Does It Really Mean? and Fair Housing Issues for FSBO's)
Most real estate agents won't put a Buyer in their car until that Buyer has shown them a pre-approval letter. The bottom line is, we don't have time to be messing around with people who can't buy a home or won’t commit to getting pre-approved. So if they can prove they're qualified and ready to buy, we'll happily work with them. We know our clients - know how to reach them, know where they work - and we accompany them on showings. We walk with them and view the property with them. Doesn't this seem like a safer way to sell your home?
Important Security Tips For FSBO's
- For your safety never set an appointment with anyone to see your home unless they have given you their name and number and you have called back to verify that number. An easy way to do this is to say, "let me check with my husband for the best time and I will call you back". Even if you are not married.
- Never let the potential buyers know your schedule; such as when you are not home, when your husband is not home, when you pick up the kids, when you work, when you will be on vacation, etc.
- Only give information to the caller about the house. Never give information such as we don’t have a security system, dead bolts, etc.
- Always have a back up plan when you allow strangers into your house especially if you have children. Have a neighbor look out for you until the strangers have gone.
- Never let a stranger into your house without identification. If the person states that they are a real estate agent, ask for a card and then call his or her office for verification if you don’t recognize them.
- Keep a list of all people who have looked at your house including the name, phone numbers, addresses, descriptions of the cars, tag numbers and any additional information which could be helpful in the event of a future burglary. All these people would be suspects.
- If you have a home flyer information box do not put information on the flyer which would breech security.
- Place all valuable items out of sight. Guns, jewelry, silverware, and collections. Anything of value needs to be hidden.
- Never leave the stranger alone and watch everything they do while in your house.
- One of the latest scams, according to The Real Estate Today magazine is as follows: A nice looking, clean cut couple makes an appointment to view your house. When they get inside one of the parties ask to use the bathroom. While in the bathroom they are searching for prescription drugs. There is a huge market for these drugs. Make sure you hide any prescription drugs in a place not obvious to the stranger.
See also: Safety Issues When Marketing Your Home
Who Will Call?
- Real Estate Agents
Most likely, you will receive a lot of contact from real estate agents. You will receive phone calls, letters, and unannounced visits. Understand that this is our job, and it takes a lot of initiative, courage and skill to approach FSBO's. Most agents don't bother. In fact, if you think about it, this aggressive agent knocking on your door or mailing you information just may be the one you want working for you!
- Bargain Hunters
Buyers assume that if you are selling by owner, you are motivated and ready to deal. They prey on FSBO’s because Realtor’s won’t work with them. They want a bargain and don’t want to risk the possibility of multiple offers and bidding against other buyers, as so often happens in Realtor – involved listings.
- Investors, Particularly Those Looking For "Distressed Properties"
It is easy to assume that homeowners selling without the services of an agent are in some sort of financial trouble and are therefore selling on their own to save money. You may get people asking strange questions and prodding into your personal matters. If they are experienced in real estate, there is also a good possibility they could take advantage of you – be careful! They know the average person does not know enough to adequately protect themselves in a real estate transaction. Consult an attorney before signing any documents to ensure you are not setting yourself up for a future lawsuit.
- Window Shoppers
You may receive a lot of traffic and phone calls, especially in the beginning. Beware - this can cause false hopes and catch you off guard, costing you in the long run. Many buyers looking at For Sale By Owners are simply curious. Realtors, because of the time and effort involved in working with homebuyers, are very careful to pre-qualify their clients and make sure they are ready, willing, and able to buy before they take them to see homes. We simply can’t waste our time or our Seller’s time if they aren’t ready, and we will turn them away from our services if they’re not ready to act. Therefore, those that are "just looking" target For Sale By Owners as opportunities to see different homes and satisfy their curiosity.
...And Of Course, The Occasional Qualified Buyer If You Know How To Identify Them And Make Them Want To Buy Your Home!
Cost
So you don't want to pay a commission. You'll save the money and do it yourself. It can't be that hard. Not worth 7%, anyway! But how do the numbers really shake out when all is said and done??
First of all, a recent NAR survey shows that FSBO's receive a median sale price of $145,000, while REALTORS® received a median sale price of $175,000. This reflects a significantly higher sale price by listing with a REALTOR® than selling on your own. If you're paying a 6-7% commission, that's still more money in your pocket than if you go it alone!!
This NAR survey also shows that 86% of homebuyers use a REALTOR®. Why wouldn't they? A Buyer in this market hardly stands a chance of finding the right home without one. So you can pretty much bet you'll be paying a Buyer's Agent 3.5% to sell your home, and they'll not do a bit of work for you. In fact, they'll be working against you. You're not their client. You will be working in an adversarial situation with a real estate professional who does this for a living. But you save 3.5%, right? Well....
On the average, FSBO's spend 1% marketing their home. Newspaper ads, signs, flyers, etc. So now we're at 4.5%. So you're still saving a bunch, right?
Who is going to look over your contracts? Who is going to make sure your best interests are protected, that you're liability is limited? Probably an attorney. How much will this cost you?
At this point, don't you think it is worth it to pay an extra 1-2% of the price of your home to have someone doing all the work for you, arranging showings, maintaining security measures, pre-screening buyers, marketing, networking, negotiating, looking out for your best interests? 84% of all Home Sellers do. That's why there are full time real estate professionals who dedicate their lives to you... the homeowner. We advocate for you, keep updated on real estate laws and continuing education, and work this job day in and day out. We're here for you!
Helpful Articles for FSBO's
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