For Sale By Owner (FSBO): 5 Reasons Why It Is A Terrible Idea
Posted by Vamsee Lella // February 8, 2018
Are you considering selling your home by yourself? If you’re in the seller’s market, then you’ve probably heard of For Sale by Owner (FSBO). At first glance, it looks like a good idea. After all, who knows the house better than you? Plus, you can also avoid paying out any realtor’s commissions meaning more money in your pocket.
However, it’s not quite as easy as it sounds. There will be a lot you have to deal with and in the end, you could end up far worse off than if you’d hired an agent. Here are five reasons why it’s a bad idea to sell by yourself.
- There Is No Real Financial Benefit. There’s a lot more to selling a home than just sticking it on a listing site and waiting for the phone calls to come in. A big reason why seller’s agents are worth hiring is that they know how to correctly price a property, based on its condition and the local market. An owner who has never sold a property before will be unfamiliar with how to price correctly and is likely to overcharge. This results in the property sitting on the market for days or even months, all the while costing you money.
- Marketing Is Not Near As Easy. Marketing is not near as easy as it seems. Even the best property needs a coordinated marketing strategy, if it is to sell fast and at a good price. This is never as simple as sticking it on a few listing sites and putting a ‘For Sale’ sign in the front yard. Good marketing takes a lot of time and if you’re not familiar with it, you’ll make a lot of mistakes and poor decisions along the way. A good realtor knows how to properly market a property in a way that will attract the right people. Furthermore, they can devote themselves to it full time.
- Selling A House Is Hard Work. When trying to sell a home by yourself, it’s not just marketing that you’ll need to find time for. You’ll also need to schedule viewing times when a potential buyer wants to see the property. Then there are open houses which can take up a whole day and go completely against you, if you don’t know what you’re doing. Selling a home is a full-time job which will also require dealing with inspectors, repairmen, photographers and home stagers. Ask yourself, do you really have the time for that?
- Qualifying The Buyer. Even after juggling through all of this and you manage to find a buyer, that won’t be the end of it. You still need to qualify them to make sure they can actually buy. A mortgage letter is not enough for this. There is a huge difference between actually being pre-approved for a mortgage and being pre-qualified.
- Knowing The Real Estate Laws. Lastly, and the thing guaranteed to bog down most people, is understanding real estate laws in your locality. Each state has their own rules and regulations, for selling a property. As a FSBO, you will be required to fill out and arrange all necessary paperwork and inspections. Mistakes will mean delays, which could sabotage an entire deal. Failure to follow important laws such as a full disclosure agreement, can result in a nasty and expensive lawsuit.
FSBO can be tricky and time-consuming. Without adequate knowledge of the market or enough time to devote to it, you can flounder faster than you thought possible. If you insist on trying it, make sure you do your research and understand all the risks involved.