For Sale By Owner FSBO

shutterstock_1724419Thinking of Selling Your Own Home? Think Twice!!  Paying a real estate commission of five or six percent of your purchase price may seem like a lot of money and it might be tempting to think that you could do just as good a job.  After all, a Realtor® makes it look easy by taking a few pictures, sticking a sign in the ground, and collecting the big bucks, right?  Nothing could be further from the truth.
First, let’s talk price — as discussed in this article, according to the National Association of Realtor’s 2013 Profile of Home Buyers and Sellers, the average FSBO sales price was $174,900, while the average price for a home represented by an agent was $215,000, a difference of $40,100.  Of course, this is a national average, so these prices are ridiculous by California standards.  However, that is a 20% difference and that average percentage difference should hold true, so California FSBO’s could be losing much more money.  Why so much?
The first reason is exposure — the MLS and syndication is a powerful force. Some people think they will get around that by paying a bottom feeding real estate agent to do an MLS listing for a fee.  However,  the syndication and exposure is not the same for these properties, as they don’t have the additional “push” marketing around them that a professional agent will do, such as visual tours, custom website exposure, and featured placement on the big aggregator sites like Trulia or Realtor.com.  The second reason is that local agents will either ignore the FSBO home or will automatically discount any price to be paid by six to ten percent — they don’t want the liability of being the only professional in the transaction as it makes it much more likely they’ll eventually get sued.  It also means they will most likely get stuck with all the work for half the commission OR they risk having you refuse to pay them commission at all. It is simply easier for them to sell another home in your neighborhood where they will have another professional on the other side.

Another reason is agent to agent networking is still the most common reason homes get sold — local agents work to get the word out about the features of the home and suggest it to other agents for their clients.

Selling on your own has legal ramifications too — there are dozens of laws that affect what is legally required for disclosures and condition at the time of sale. Miss one of these and you risk having the sale overturned later or having a lawsuit on your hands.

Security is another consideration.  Agents have special lockboxes that record who comes in your house and when.  The people showing the homes also have had background checks and fingerprints taken to ensure they are not really home invaders.  The same is not true when you stick a combo lock on your home.  You don’t want to wake up with the “buyer” from this afternoon holding you hostage at gunpoint!

Once you find a buyer, keeping that buyer might also be challenging.  Since you don’t know much about real estate lending, you might end up with a nightmare where the buyer can’t get their loan approved but won’t let you out of the deal either.  You will end up having to hire an attorney and that will most likely cost much more than the commissions you “saved.”

Finally, there is the stress — if a real estate professional has done their job for you in the past, it all looks very smooth.  But there are lots of moving parts — contingency dates, inspection findings, escrow requirements, lender issues, timing coordination, title company issues, building reports, etc — that all affect keeping the transaction together.  An experienced agent may make this all look easy, but most transactions have some hurdles to clear.  Why take the risks? Call me today!!

About Lauren Perreault