Potential Problems with For Sale By Owner Properties

Potential Problems with For Sale By Owner Properties

Are You Ready to Sell a FSBO?Are you thinking that selling a home without an agent may be worthwhile approach to take? It may seem beneficial because you don't have to pay for the cost of an agent, but there are a lot of unforeseen risks that home sellers may not be aware of. Those who go the For Sale By Owner (FSBO) route are taking their chances and relying upon themselves to have the skills necessary to pull off a quick sale that gets them optimal value for their home.

Learn more about the potential pitfalls of selling a home without an agent today.

What Is FSBO?

Some sellers decide to sell a home by themselves rather than enlist the help of an agent. FSBO homes occur when an owner wants to keep the commission they would otherwise pay out to an agent. It may be seen more often in a seller's market. In selling a home without an agent, the seller assumes many responsibilities normally performed by the agent and often lacks the experience and connections an agent can offer to make the process of selling a home smoother.

FSBO Challenges

Those looking to sell their home may think that they are saving on commissions by going the route of For Sale By Owner. However, there are a number of considerations that are not being recognized and can cost homeowners a good portion of their original investment. Why should sellers think twice before selling their home without the help of an experienced real estate agent?

Pricing a Home

A local agent knows the area, the latest comps and the state of the market. Those who choose to sell a home by themselves, without the advice of an agent, may lose out on tens of thousands of dollars. Price too high and reduce the pool of interested buyers, possibly causing a home to linger on the market and creating additional expenses for the seller. Price too low and get traffic and potentially multiple offers, but not the optimal value of a home.

According to a Profile of Home Buyers and Sellers by the National Association of Realtors®, there was a $60,000 gap between the average FSBO sales price and that of the average home represented by an agent. Average homes represented by an agent were priced at $245,000, while the average FSBO sales price only amounted to $185,000. The difference can be substantial for many sellers who are looking to get a fair price for their property.

Marketing a Home

A seller may not be objective when it comes time to sell their home. Those who are selling their home for the first time may not know how to boost their curb appeal and may overlook important elements on a home. From cracked sidewalks to a poor paint job, a seller may unintentionally turn off potential buyers. Others may pay too much on a home renovation when minor repairs, a fresh coat of paint and professional staging can net them a decent ROI.

Agents are able to list a home properly. They can upload professional photos or videos on the MLS or Multiple Listing Service database and use their social media platforms to share new listings. This can expose a listing to potentially thousands of buyers. An FSBO seller usually does not have the same tools or network as that of an agent and therefore, may greatly reduce their potential pool of buyers.

Agents are knowledgeable about how to highlight a home's most attractive features and will deal with scheduling showings and dealing with individuals who may have no interest in actually purchasing a home. Sellers may not realize how agents work for their commission and how much effort they will need to exert to list, market and sell their property on their own.

Negotiating a Sale

The average seller may not be prepared to handle or properly address the various responsibilities that agents assume when selling a home. From open houses, to negotiating a sale, talking about contingencies or finalizing a contract, there are many areas that require a specific set of skills and it can be hard for a seller to remain objective when attempting to sell their own home and to close on an offer. A misstep by a seller can potentially lead to legal issues or the loss of a qualified buyer.

Final Thoughts

Those who are lucky enough to start preparing paperwork may be an overwhelmed by the amount of documentation involved in the closing process, whether they live in Eden Prairie or elsewhere. Many are unaware of the addendums and the contract itself that may be part of over 20 pages of detailed paperwork. An agent handles much of this documentation to protect sellers from future liability. This is another reason many choose to work with an agent.

Post a Comment