The Hidden Horrors of Going FSBO (For Sale by Owner)

piggy bank surrounded by coinsMany home sellers have considered skipping the real estate agent to save on closing costs, but very few have actually succeeded in seeing those savings. There’s a good reason: the average homeowner doesn’t have the rigorous training and real estate knowledge that a licensed agent does.

But just what makes For Sale By Owner (FSBO) such a bad idea? From incessant inconveniences to costly paperwork mistakes, here are a few of the horror stories that FSBO sellers inevitably encounter.

The Daunting Task of Marketing Your Home

It takes more than a “For Sale” sign in your front yard to make buyers notice your home. According to the National Association of Realtors, 95% of buyers use the Internet in their home search.

This means that online marketing — starting with listing your home on the local listings database, sharing your listing to dozens of social media platforms, and advertising your listing on numerous websites with a global audience — is essential to selling your home.

Without an Agent, Home Marketing Isn’t Cheap

This is where it gets expensive: yard signs, newspaper ads, brochures, high-quality photographs, and a professional-looking website — things real estate agents have at their disposal — are your responsibility to finance and maintain when you have to do your home’s marketing yourself.

Incorrect Home Pricing: The Ghosts of Lost Profits

chart of fluctuating home valuesEven after all that marketing, FSBO sellers don’t actually make more money. In fact, many lose money.

The research backs it up: the National Association of Realtors reports that the average home sold with an agent sells for $240,000. FSBO homes, however, sell for only $185,000. What you could save in commission you lose by pricing your home incorrectly or skimping on the marketing.

Without an Agent, Finding the Right Price is Impossible

Part of the problem with a low-dollar sale is the asking price. Real estate agents have more tools and resources, plus an intimate knowledge of the local housing market, so they can spot a wrongly priced listing from a mile away. FSBO sellers, however, have only limited access to home value tools and resources about past sales activity.

The Mountains of Paperwork

stacks of papers in bindersUnderstanding the paperwork involved in a real estate transaction is one of the biggest challenges of selling For Sale By Owner.

After all, the contract isn’t just an agreement about the price; it also includes contingencies (like those for home inspections and financing), the closing date, and other important terms.

Without an Agent, Sellers Can Make Costly Mistakes

The paperwork involved in a home sale can be complicated and full of legal jargon. An oversight could mean a costly mistake or even a lawsuit. Real estate agents, however, have the knowledge and understanding to take care of all the necessary disclosures.

Don’t Become the Next FSBO Horror Story

Sign that says For Sale By OwnerYes, commission is a sizable chunk of change. But so are the hidden fees and lost profits, not to mention the added stress, that come with selling a home by yourself. The best way to save money, save time, and save headaches is to work with an experienced real estate professional.

We’re here to help! Give us a call and let’s talk about the home selling process.

About Walter Burns

Walter Burns is a licensed New Jersey Realtor since 2002 and he specializes in luxury living in the hottest New York Metro area communities including the prestigious New Jersey Hudson River waterfront areas of Hoboken, Jersey City, Bayonne, Union City, Weehawken, West New York, Guttenberg, North Bergen, Cliffside Park, Edgewater, and Fort Lee. Walter's mission, desire, and goal is to assist all parties in accomplishing their real estate goals, as well as to empower his clients through exceptional service, creating extraordinary results. Having been mentored by several of the top 100 Realtors and Developers in the United States and Canada, he graduated from Rowan University and currently resides in Hoboken. Walter is part of Weichert Realtors, the largest privately owned real estate firm in the world. NJAR Circle of Excellence Sales Award, 2009, 2010, 2011. Google

Real Estate Popuri

Leave a Reply

Your email address will not be published. Required fields are marked *