FSBO Woes: Why It's So Hard to Sell Your Own Home
For most
people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards.
By Marcie Geffner
Granted, some people are
able to sell their own homes without the services of a real estate agent. Some of
these successful do-it-yourselfers are very experienced home sellers. Others
are transferring ownership of their home to a child, a coworker or a tenant
who's already living in the home. These circumstances are the exception, not
the norm, however. For most people, a for-sale-by-owner (FSBO) transaction
simply isn't in the cards. Here are five reasons why.
1. FSBOs can't list
their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing
service (MLS) because these industry membership organizations are open only to
licensed real estate brokers and agents. FSBOs are also locked out of many home
search engines and Web sites, including the gigantic Realtor.com. Sure, a
determined FSBO can put a for-sale sign in his or her front yard and run a tiny
advertisement in the local newspaper, but the home won't receive nearly as much
exposure as it would through the MLS.
2. Agents won't show
FSBO homes. In a
typical home sale, the buyer's agent receives a percentage of the commission
that the seller pays the listing agent. Without a listing agreement, there's no
guarantee that the buyer's agent will be compensated for his or her services,
unless the buyer has signed a buyer's brokerage agreement that specifically
provides for such compensation. Even if a FSBO offers to pay the buyer's side
of the commission, most agents won't want to go through a transaction with an
unsophisticated self-represented seller across the table. That means the pool
of potential buyers for FSBO homes is limited primarily to unrepresented and
probably unqualified prospects.
3. FSBOs usually
overprice their home. Like most homeowners, most FSBOs honestly believe their own home is
worth more than comparable homes in the same neighborhood. Usually, they're
wrong. A real estate agent can provide an update on market conditions, an
assessment of the likely selling price of the home and tips for improving the
home's buyer appeal. Overpricing a for-sale home is a sure way to deter
potential buyers.
4. Buyers will feel
intimidated.
Potential buyers will spend less time in a for-sale home if the owner is
present during the showing, and they'll be shy about discussing its pluses and
minuses with their own agent if the owner is within earshot. Buyers will also
be less inclined to make an offer if they know they'll be negotiating directly
with the seller. Having an agent on each side creates an effective emotional
buffer between the seller and buyer.
5. FSBOs are likely to
stumble into legal trouble. Real estate transactions are fraught with potential
liability for unwary sellers, particularly in states that have extensive
disclosure requirements (e.g., California). A FSBO who overlooks even one
required form or legally mandated disclosure could face a protracted and
expensive buyer lawsuit after the transaction closes.
Copyright
© 2000 Marcie Geffner. All rights reserved
Information
retrieved from http://www.realtor.com/Basics/Sell/Why/Fsbo.asp?gate=iwn.