Many sellers decide to sell their homes For Sale By Owner (FSBO) in order to save money and realize a larger profit, which makes perfect sense. Why pay for it if you can do it yourself, right? But it’s not quite as easy as people think.
Many FSBO sellers rely on the yard sign and a classified ad or open houses to market their home. But the vast majority of buyers start their home search online, so if your home can’t be found easily, it can’t sell. Less than 5% of FSBO sellers use video marketing, direct mail (which is still surprisingly effective), or any sort of social media campaign. It’s no wonder that the average seller will net 25% more if they sell with a Realtor®. I said NET, not gross. That’s extra money in your pocket when the closing attorney hands you a big fat check at closing. If you can sell for $20,000 more but it cost you $12,000 to pay a professional, then it was free, right? Free is good!!!
FSBO sellers often have very little experience:
- Figuring out a good asking price
- Understanding the paperwork that’s legally required
- Knowing what they need to disclose
- Negotiating hard without losing the buyer
- Knowing how and where to market the property to attract qualified buyers
- Knowing the safety measures to follow during showings
It’s not a criticism, it’s just that sellers usually don’t have training in real estate. I remember I tried to sell my house as a FSBO way back in 2002, before I became a Realtor®. After a few weeks of no showings and no interest, I listed with an agent. When she asked me how I came up with my asking price, I said I added $20,000 to what I had paid for it five years before. It sounded like a good strategy to me at the time! Sadly, it was not realistic. At all.
This is what good Realtors® do all day, every day. You are paying for professional representation, guidance, knowledge, and experience. I could watch 100 Youtube videos on how to cut your own hair, and I could probably give myself a trim that wasn’t too terribly awful, but in the end it would probably be much easier and I’d get a far better haircut by a professional hairstylist. Getting a major haircut is stressful enough without botching the job and knowing that I did it to myself!
Here’s a perfect example that selling for sale by owner isn’t always easy: Colby Sambrotto is the founder of ForSaleByOwner.com, one of the most popular FSBO websites out there. You list your property on their site for a fee as a way to market your home. Mr. Sambrotto tried for six months to sell his NYC apartment for $2 million dollars. I’m assuming it was listing on his own web site. The home sat on the market for about six months without selling. He gave up and listed it with an experienced agent for a typical commission, who increased the listing price of Sambrotto’s apartment to $2.15 million, and they received multiple offers.
It wasn’t luck or good timing. This was an agent who knows his market, knows how to find a pool of qualified buyers, and how to facilitate the sale to make the deal go through. Correct pricing, aggressive marketing strategies, and probably a good amount of staging allowed Mr. Sambrotto’s home to be sold for much more than his original asking price.
Boring For Sale By Owner (FSBO) Statistics
- FSBOs accounted for 8% of home sales in 2014. The typical FSBO home sold for $210,000 compared to $249,000 for agent-assisted home sales.
- FSBO methods used to market home:
- Yard sign: 42%
- Friends, relatives, or neighbors: 32%
- Online classified advertisements: 14%
- Open house: 14%
- For-sale-by-owner websites: 15%
- Social networking websites (e.g. Facebook, Twitter, etc.): 15%
- Multiple Listing Service (MLS) website: 10%
- Print newspaper advertisement: 3%
- Direct mail (flyers, postcards, etc.): 3%
- Video: 2%
- Other: 1%
- None: Did not actively market home: 25%
- Most difficult tasks for FSBO sellers:
- Understanding and performing paperwork: 12%
- Getting the right price: 6%
- Preparing/fixing up home for sale: 6%
- Selling within the planned length of time: 18%
- Having enough time to devote to all aspects of the sale: 6%
A lot of what a Realtor does is to help you determine a list price that will earn you the most amount of money but still have it sell in a fairly short amount of time. Knowing the market and the neighborhood, understanding what has sold and what failed to sell, as well as the absorption rate is our area of expertise. Information is power and Realtors® have access to the most accurate numbers through the MLS and tax records.
Let’s talk safety for a minute. When a Realtor® puts a property on the market we use electronic lockboxes that give us a report of every person that opened the lockbox, what company they’re with, and what time they were there. I always recommend that my sellers put away all valuables before showings, lock up, and leave the house. If a FSBO seller wants to allow showings, you pretty much have to be present. What happens if you allow a “buyer” to walk through your house who’s just looking to see what you have that’s worth stealing? Or worse… but let’s not dwell on that.
How about marketing? I love video marketing. Here’s a sample of the type of video I do when listing a home.
Aren’t these photos gorgeous?! I wish I could say I took them but alas, these are better than anything I could ever take. I used a professional photographer and he did a fantastic job. But I made the video! I put it on YouTube and all over social media. Great photos really do make all the difference.
I also get a ton of traffic from Pinterest. I have one post in particular that gets an average of 200 pins a week. A WEEK! People find this post, pin it to their own boards, see my other posts, and all this drives traffic back to my web site where they can see my featured listings.
Now let’s assume that you put your home on the market as a FSBO and got a good offer. Once you’re in contract there are a million land mines to navigate. What if the buyer does a home inspection and comes to you with a laundry list of repairs they are demanding that you make? Or if they want you to reduce the sales price instead? What if it appraises for less than your agreed upon price and now their lender won’t give them a loan unless you drop your price? What if there are title issues? What if you fail to disclose a material defect and the buyer sues you six months after they buy the house? What if they can’t get a loan at the 11th hour and want their deposit back? These are things a professional Realtor® deals with on a daily basis and we can take care of the vast majority of them, as well as talk you down from the ledge every now and then!
So in conclusion, selling FSBO is absolutely doable and many people can and do sell their homes on their own very successfully. But if you need help, there’s no shame in hiring a pro.
About the Author: The above article 10 Reasons to Use a Realtor When Selling Your Home was written and provided by Karin Carr. Karin has helped literally helped almost 200 families buy and sell homes since 2005. If you are in the market to BUY or SELL a home, she can be reached via email at [email protected] or by phone at 404-855-1807.
Are you thinking of selling your home? I’m very good at marketing homes to sell quickly, and for more money. If you’re a first-time home buyer then you’ll be in good hands. I’ve helped countless first-time home buyers through the entire process of buying that first home! I have a real passion for helping folks buy and sell homes here in the great state of Georgia and I would love to connect with you!
I help people buy and sell real estate in the following cities: Acworth, Ball Ground, Canton, Kennesaw, Woodstock, White, Roswell, Milton, Alpharetta, Dallas, Powder Springs.