FSBO is a real estate industry abbreviation for the term “For Sale By Owner.” For some of you homeowners, there is a temptation to try to sell your own home when the time comes to move. It’s a tough job and homeowners seem to manage it with varying degrees of success. However, a much larger number of homeowners fail miserably and end up paying a high price for it. Between listing fees and a home lingering on the market for too long, it probably won’t be worth what little you save in commissions. It may seem like a good idea yet there are some realities about selling your own home that you should make yourself aware of.
This is not to say that a homeowner can’t successfully sell their home; it absolutely can be done and done well. As a homeowner, it’s wise if you have a realistic perspective on the process. It’s not easy. It’s not convenient. It may not be as cost-effective as it seems. There’s a reason that real estate agents work long hours 7 days a week and if they’re awake, they’re on call!
It’s not easy.
Selling your own home is not a simple, straightforward deal like selling a car. It’s a complex matter, legally. If you want to sell your own home, you’ll need to learn a lot and do it quickly. You can easily be taken in by clauses, terms and phrases that you either don’t fully understand or don’t completely appreciate. You could end up in a truly compromised position if you don’t have a grasp of the contracts involved in a home sale.
You will also be at a serious disadvantage if you don’t fully understand home values and the current housing market in your area. Your listing price shouldn’t be a number you feel is warranted or what you think you need to get into a new home. It must be priced by what the market will bear at the time. This is one area where FSBO transactions often go awry. If you don’t have access to the hard data about recent sales for comparables in your neighbourhood, you might not be able to calculate a sellable price for your home.
A seller also needs a thick skin about his home and its price. You’ll hear a lot of negative feedback about your home, its price, the neighborhood, your maintenance skills, your decorating skills and just about anything else in between. Because we are emotionally attached to our homes, this can be hard to hear once, much less week after week. Additionally, buyers can be really uncomfortable viewing your home or negotiating with you if they know you are also the owner. If you aren’t a stellar negotiator with a hide for criticism as thick as an alligator’s, the FSBO process may not be for you.
It’s not convenient.
Real estate agents put in a great deal of time to sell your home. It really is a full-time-plus-time job. If you know a successful agent, ask them when they last had a full day off. Consider these time-consuming tasks:
- Marketing the home. Your agent will take pictures, post the listing on the MLS system and their website, share posts about the property on social media, write up descriptions of the home, create brochures and flyers, go through their contacts and make some calls to generate interest and see if they can find an interested buyer – and that’s just a start. Marketing any home takes time. And remember, you can’t even access the MLS System to list your home unless you are a licensed real estate professional. MLS is where most homebuyers first start their home search. FSBO companies will list your home on the Toronto real estate board. Toronto! Not Kitchener-Waterloo. Therefore the local kitchener, Waterloo, Cambridge realtors (which buyers are working with for free) don’t send their clients any FSBO listings as they are not on our board.
What this means for you is that you are missing 80% of your most qualified buyers.
- Screening potential buyers. As the seller represented by a Realtor, you will only meet the potential buyers that your agent has screened and pre-qualified. You won’t be dealing with all the folks who aren’t legitimate prospects. You’ll have to do all the prescreening if you sell on your own (there’s lots of tire-kickers out there).
- Showing the home. If you have a job that allows you to take off at the drop of a hat to show your home to a potential buyer who only has an hour to spare, then you might be okay. Many other people in traditional job settings will have difficulty making time to show the home to potential buyers at a moment’s notice.
- Fielding the calls. Your agent’s real estate office fields an awful lot of phone calls on a daily basis. They hear so many questions in a day that they often leave with sore ears! Can you manage your life, your job and a seemingly endless stream of phone calls, emails, texts and/or social media messages about your home? <Groan>
It’s not as cost-effective as it first appears.
Some might say they do it for the challenge, others for the experience, but in truth most FSBO sellers just want to save some money. They believe that if they do the work, they will save a bundle in real estate commissions. While it’s true that you won’t have to pay a commission, there are costs involved that are probably much higher than you realize.
Companies dedicated to “helping” homeowners sell their homes on their own have fees. They will charge you up front for their services and you have no guarantee or even expectation of a sale. Agents only charge if they are able to sell your home.
Marketing costs are also out-of-pocket if you sell your own home. Just about every website will charge you and so will the listing services. (The MLS, the service most used by real estate agents and home buyers, won’t even list for you unless you are a licensed agent.) Every classified ad, every printed flyer, every marketing tool will be paid for by you at the time of placement, not after the sale.
Selling your home on your own also costs you time. You’ll be spending time away from your job, away from your family, away from your life. Can you afford the loss?
You can sell your own home but it will take a great deal of effort on your part. Hiring a qualified agent with the skills to get your home sold quickly takes away a great deal of stress. If you choose the FSBO route, be aware of the perils and have a plan to outsmart them. Or you could simply hire a good real estate agent and let him or her do the hard work of selling your home. Yes, you’ll pay a commission but it will be worth every penny and your Realtor will earn every cent. If you’re wondering if an individual Realtor or a Real Estate Team is best for you, click here.
Find out how I’ve helped more than 2,000 families buy and sell homes in Kitchener-Waterloo by getting a copy of my free eBook here. Also for great real estate videos you won’t find anywhere else, subscribe to my YouTube channel. I love to share my expert knowledge so if you have any real estate questions feel free to call me at 310-SOLD or email me at firstname.lastname@example.org.