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Is “For Sale By Owner” Right for You? What Sellers Should Know about FSBO.

Is “For Sale By Owner” Right for You? What Sellers Should Know about FSBO.

When a seller is preparing to list their home, there are a few things that typically go without saying:

1. Sellers want to get the most money that they can for their home.
2. Sellers want to complete the sale as quickly as possible.
3. Sellers want the entire process, from showing to closing, to go as smoothly as possible.

To achieve these three common seller goals, the thought of putting a home on the market as a “For Sale by Owner” (FSBO) may seem like an easy, go-to decision. After all, a FSBO seller could save on seller’s agent commissions, sell their home at their own pace and be in charge of the showing and closing processes. But, what do those responsibilities entail for a seller who decides to “go it alone” and list their home FSBO?

Often times, those tasks mean a lot.

In fact, the National Association of Realtors has reported that a majority of people who begin their home-selling process as FSBO, eventually end up hiring a realtor to complete their sale. Why? Frankly, homeowners who decide to list their homes as FSBO face a few unique challenges that can be time-consuming, stressful and discouraging.
What kinds of challenges do FSBO sellers have to face?

1. Pricing – The first and arguably most-important step in the home-selling process is setting the right price for a home. Stats show that the first two weeks of being on the market are critical for sellers. It’s during that time when a buyer’s interest peaks in a home; so, in order to get buyers to take a look inside, it is crucial that the price is right.

FSBO sellers are responsible for doing their own market research on comparable area homes for sale to make sure that their home’s price aligns with others that are for sale or that have recently sold. That task alone may take a lot of time and energy.

2. Marketing – In today’s real estate market, tools like social media can go a long way in spreading the word about a home that is for sale; but, there often is a lot more advertising that is needed for the right buyer to find a home. Let’s not forget the importance of taking great photos for the listing, either.

Realtors have the needed tools at their fingertips, by way of the Multiple Listing Service or MLS, where nearly every home for sale is advertised. FSBO sellers can access the MLS by paying a monthly fee or by paying an agent to add their home to the list. Realtors also have lists of contacts that they can alert about a new home that is for sale. FSBO sellers usually do not have that kind of reach.

FSBO sellers are also responsible for handling all inquiries about their home, which can be a very time-consuming process. Of course, that includes orchestrating showings, plus advertising for and hosting open house events to draw buyers in.

3. Negotiating – Once a FSBO seller receives an offer on their home, it’s up to them to determine how serious and strong that offer is. They need to decide whether to accept, reject or counter the offer. Once they’ve done all of that, they may still need to confirm that the prospective buyer is qualified to purchase their home.

Depending on the number of offers a FSBO seller receives and rejects, the negotiating process can be a very tiring one. FSBO sellers also need to realize that they may be entering the negotiating process as the least experienced party. They may be dealing with a prospective buyer’s agent, who is very familiar with the market and the negotiating process.

4. Closing – Many home buyers and sellers who choose to be represented by a real estate agent fear the closing process, so imagine how a FSBO seller may feel. Typical closing actions like inspections, appraisals and repairs can be a lot to deal with alone. Often times, FSBO sellers may decide to consult with an attorney or hire one to help with unfamiliar closing issues. Unless a FSBO seller has written a closing contract, they may need some help.

So, when a seller is trying to expedite the home sale process and make as much profit as possible on their home, FSBO may seem like their easiest option; but, when all of the hard work, challenges and costs are factored in, a FSBO may not be their best option.

If you were considering a FSBO, but would like to consult with a trusted real estate agent, contact Berkshire Hathaway HomeServices The Preferred Realty today.