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Why You Shouldn’t Be a FSBO

Do you understand the contracts process well enough to not get into any legal problems or to explain to a buyers’ agent how you want things drawn up?

Anyone, including you, can sell your home – all you have to do is underprice it. You will get offers selling it on your own; the question is whether you’ll get an offer for what you think you deserve.

Questions to Ask Yourself

  • Do you have the time to field all the calls, faxes, and inquiries that will come with multiple offers? One missed phone call or fax could kill a deal.
  • Will you be able to let anyone in during the week to see the property? (if not, fewer offers = less money).
  • Will you know what to say and what not to say to those who call? (if not, less interest = fewer offers = less money).
  • Do you have the proper forms and disclosures necessary to do this on your own? (legal problems, no protection between you and a buyer).
  • Do you understand the contracts process well enough to not get into any legal problems or to explain to a buyers’ agent how you want things drawn up?
  • Will you be able to meet the appraiser and/or inspectors to let them into the house?  If an offer falls through, and they often can, do you have the time and desire to do it all over again – more marketing, another open house, a tighter settlement schedule? Also, remember that people buying townhouses in homeowners associations, condos and coops have three days for resale and 15 days for new build after reading the documents to get out of the deal for ANY reason. There are many other reasons a contract can fall through after it is ratified…low appraisals, inspections problems, financing contingencies and more.
  • Do you understand the concept of the Golden Time? You will get the most money for your home in the first week that it’s on the market (in this market), and the longer it’s on the market, the less money people are willing to offer. If you try the “for sale by owner” approach and then change your approach to work with an agent, you will also have already eliminated the buyers who saw it in the first place, who may have low-balled it thinking you were easy prey, and who are not willing to make a second offer – they’ve moved on.
  • Do you have the ability to make sure that the financing that your buyer has is good and won’t cause the offer to fall through?

Do You Know…?

  • One of the reasons you get multiple offers is that your property is marketed really well (MLS) and has the most showings (and this is just a little part of my marketing for you). You will get more money and fewer contingencies if you have more people competing for the property. More showings = more offers = more money.
  • Most serious buyers are already working with an agent. Agents will be calling you and will be asking if you will “cooperate” with them. If you don’t (meaning you won’t pay them a commission), they won’t even bother to send their clients over. Fewer people = fewer offers = less money.
  • Even if their clients do find out about your property, there is often language in buyers’ contracts with their agents that if they buy a “for sale by owner” property, the buyer will end up having to pay them a commission, making them less likely to put an offer down. Not only that, but most wouldn’t even know how, nor would they even know where, to get the forms. Those who are able to write up a contract will lower their offers to make up for what they have to pay their agent. Other savvy buyers know that FSBOs are often good deals because there is little competition, and they will lowball you because of this.
  • If potential buyers do give you an offer without an agent, they will use generic forms and different templates, and this makes it very hard to compare any other offers you’ve gotten. You will have to comb every word and make sure they haven’t typed something up that would hurt you.
  • If you will cooperate with a buyers’ agent, thus paying half the normal commission, you are now only saving a few percent, because half of my listing commission goes to the buyer’s side.
  • You will have to pay for your own advertising and marketing.
  • Because you don’t have as many venues to market your properties as I do, you’d get a lot less traffic. Less traffic = fewer offers = less money.

According to the National Association of Realtors, “for sale by owner” properties lose 28% of the price they could have gotten if the owner went with an agent (taking commission into account). USA Today did a study and found they really only lost an average of 21%.

Have I persuaded you yet? If not, see what I will do for you.