5 Common Traps of ‘For Sale by Owner’

It may seem like something that can be handled on a person’s own, however, selling your home on your own is truly no easy task, and will most likely result in some headaches along the way. Let’s discuss 5 common traps of a for sale by owner (FSBO) transaction that a Realtor can help you avoid.

1. Fewer People May Know Your Home is For Sale

Trained specialists acquire their licenses to accomplish this for you for a reason. A real estate agent will have insider connections and networking contacts, they will know the market, and will also guide you through the entire process, whilst negotiating on your behalf, and do everything in their power to make the process of selling your home as simple as possible.

Only Realtors can list homes on the Multiple Listing Service (MLS), which is one of the biggest online tools real estate agents use today. In a For Sale by Owner transaction your “buyer foot traffic” may be limited to drive-bys and curious neighbors, and if this is the case then you may have a potentially expensive problem to deal with.

Selling is quite often a game of numbers, and it is as simple as this: The greater exposure brings greater chance for success. You will need to be willing to invest your time, money and any skill set you may have in the real estate industry, in to a solid marketing plan.

Realtors almost always use services that will allow sellers to approve, deny, or reschedule showings and also to set time-frame boundaries. If you truly want to sell your home, you need to be as accommodating as possible for showings of your home, because if you decline one, potential buyers may seek out and put an offer on a home around the corner instead.

A Realtor will be doing all of this for you, and he or she will have more experience, and sometimes more drive, in promoting your home through ads, signs and other methods.

2. The Risk of Underselling Your Home

There is a risk of selling your home for significantly less than it is worth if you are doing For Sale by Owner. Statistics have shown that the average FSBO home sells for approximately 15% less than homes which are sold through a Realtor.

3. The knowledge

Not only will you need to spend a significant amount of time educating yourself on the process of selling a home to the point that you could become a licensed real estate agent yourself, but you will also need to educate yourself on the current market, and advertising methods competitive real estate agents are using today, as well as working with potential buyers.

4. The paperwork

Preparing all of the legal forms, disclosures, etc. is your responsibility, and if you’re unfamiliar with the guidelines and requirements, which majority of us are, you are taking the risk of financial and legal liabilities.

5. Unqualified Buyers

It may prove to be more difficult detecting the unqualified, or uninterested buyers without prior experience. Unfortunately, people who may not be able to obtain the proper financing will actually seek out homes that are For Sale by Owner since they know most private sellers are generally inexperienced.

You will also come across many people who are “just curious” and are not serious about buying a home, but rather enjoy to look around as a Saturday or Sunday adventure when there’s not much else to do to entertain one’s self on the weekends. These types of inquiries will waste a lot of time and can be a distraction from the few serious buyers who may show up in the midst of all this.

Also as aforementioned, one of the more hexing difficulties a For Sale By Owner would face is the surplus of people stopping by to see their home. It might sound attractive to have so much foot traffic, although the issue typically is that the people who are stopping by in to FSBO properties are not usually qualified for a mortgage, or many may not even be serious buyers at all. Rather they are just looking to curb their own curiosities, at your expense.

Realtors will know to ask the appropriate questions to be certain those stopping by to take a gander at your home are genuinely potential home buyers. Also, if you are aiming to save the commission on a Listing Agent for your home, please remember that you will still need to consider the commission owed to the Buyer’s Agent, which is not waived in an FSBO transaction.

Final Thought

Allow the professionals to aid you in selling your home so that you have the most success, and the least headache, when the time comes to sell.