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Why Do People Try To Sell "By Owner ?"

By
Real Estate Agent with New Home Hunters of Fort Worth and Tarrant County

We have all seen them.  Funky signs in the front yard, maybe a home-made flyer in an info tube... that is usually filled with water and illegible.

Sometimes the homes actually show well from the street.  Sometimes they don't.  But still they try... FSBO'ing it.

Here's a great example.  Now... for once... this home looks pretty nice from the street.  But... there it is... the good ol' dependable hand-written with black magic marker... the yellow cardboard FSBO "For Sale" sign.

                    

Why do they do this ?  I have found many reasons why... but the typical one is price.  It really does not matter what kind of comparable sales a prospective listing agent shows the seller.  They must, of course, all be wrong... because they are all much lower than the seller just KNOWS they can sell their house for.

When it all boils down to price... and the seller is adamant... I usually go into my "if you were the appraiser, with your job on the line, and YOU had to PROVE a sales price... and these current comparables were what you were forced to work with... which three of THESE... would you bet your appraisal job and license on ?

My Dear Active Rain Listing Agents... what are the typical reasons that sellers in your area use... to try and sell by owner ?

And... if their main reason is price...  and they complain that you want to price it too low... regardless of the comparable closed sales that you show them... and regardless of what the "up for sale currently" homes are priced at... what else do YOU do... to try and show them where their pricing needs to be ?

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Comments (18)

Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Karen - Some of these guys are so far upside down that they feel like this is their only way. Little do they know that almost all buyers are represented buy agents who expect to get PAID! The majority of FSBO's are trying to beat the system. They almost always fail.

May 17, 2009 02:46 PM
Valerie Spaulding
Windermere Peninsula Properties~Allyn~Belfair~WA - Belfair, WA
Allyn-Belfair-Hood Canal-Local Expertise!

They are trying to save a buck in their minds. commission - they have a bad taste in their mouths for real estate agents and think we are just rolling in it... Price too sometimes but more so the cost and they think just like Greg said that they "don't need no real estate agent." 

May 17, 2009 02:51 PM
Andrew Haslett
Van Warren Home Inspections, NAHI CRI - Fort Knox, KY
Heartland of Kentuckynulls, Best Home Inspector

Greg says FSBO' almost always fail -- I don't know that I agree with that. As a home inspector, I've seen some successful FSBO's.

But,  I don't recommend it.

 

Karen: all the FSBO's were about saving money.

My perspective: you get what you pay for (or don't).

May 17, 2009 02:51 PM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I think now its just people who are upside down on there loan. But they are really kidding theirselves now. No chance to sell.

May 17, 2009 02:52 PM
Lourdes Hoglo REALTOR® Three Village & North Shore Suffolk Co. Long Island
Prudential Douglas Elliman Real Estate - Setauket, NY

Karen, simply to save the commission! & Most think they can do it better. (Just my experience)

May 17, 2009 02:54 PM
Thom Abbott
MyMidtownMojo.com |770.713.1505 | Intown Atlanta GA Condo Living - Atlanta, GA
Midtown Atlanta GA Condos For Sale

Karen...most times I find them trying to save the real estate commission. Little do they realize how much it is really worth later on.

Then they come to me (or us) later, and want our help but want us to do it for a lower fee.....ah....did you not figure out how hard it is to sell your home, and now you want my professional help, but for less money.

The next time I have a sore throat and can't get rid of it, I'm going to ask my doctor to reduce his office visit fee.....yeah, make me laugh!

 

May 17, 2009 03:02 PM
Kat DeLong
Realty ONE Group Mountain Desert - Prescott, AZ
REALTOR

It's all about $$$

May 17, 2009 03:06 PM
Bob Foster
Century 21 Lanthorn R. E. Ltd. Belleville, Ontario - Belleville, ON

Hi Karen. Sometimes it's price, and that's ironic because the first thing a buyer will do is to tell them they are selling without a realtor so they need to drop their price by 5%. Sometimes, though, it's because they don't understand what we do and can't see any way that the buying and selling agents (they think agents, not brokerages) deserve a total of 5% of the sale price in commissions. There's also a third group that have had bad experiences with real estate agents and don't trust them at all.

May 17, 2009 03:18 PM
Melina Tomson
Tomson Burnham, llc Licensed in the State of Oregon - Salem, OR
Principal Broker/Owner, M.S.

I agree with Bob that there are two categories of FSBO.  Those that dislike agents and want nothing to do with them, and those that want to try and sell on their own and save the money.

There are plenty of overpriced turkeys represented by real estate agents as well.  Overpricing isn't just for FSBO's.

May 17, 2009 03:27 PM
Pam Dunn
RE/MAX Premier Choice - Crossville, TN
Relocation Specialist

I agree with Bob, many people have a bad taste in their mouths for Real Estate agents. Everyone tries to save money in these tough times not realizing that they NEED an agent to help them through the process.

At Choice Real Estate in Crossville Tennesse, we have the best of both worlds. We allow the seller to sell themselves with full service Real Estate on their side. We do this for a small fee on the listing side and traditional on the selling side. But we offer a buyers bonus.It is all about an informed seller!

May 17, 2009 03:30 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

And the reason people buy FSBOs is that they are looking to save the same money that the seller is trying to save... and only one will save the money. 

May 17, 2009 03:31 PM
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

Karen Anne, It is true confession time, I was a FSBO.  We moved from Colorado to North Carolina and had only been there two years when my husband got transferred.  Two years is not long enough to have built up equity and since I had 15 years of sales experience and we had a dynamite location I made selling our house my career.  As it turns out it did become my career.  I found I liked selling homes.  We were living in Mayberry though.  I don't know that I would want to be a FSBO in a huge area like Houston.

May 17, 2009 03:44 PM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

What? Andrew, with respect, you are a home inspector, not a Realtor.

May 17, 2009 03:54 PM
Anthony Stokes-Pereira
Better Homes and Gardens Rand Realty - Nanuet, NY
Realtor

Hi Karen;

They need to try and fail, but some are successful, good luck.

May 17, 2009 04:11 PM
Paul S. Henderson, REALTOR®, CRS
Fathom Realty Washington LLC - Tacoma, WA
South Puget Sound Washington Agent/Broker!

Karen Anne, Your just trying to get me in trouble again with the FSBO community...Aint gonna happen!

May 17, 2009 05:11 PM
Carol Culkin
Diamond Partners Inc - Overland Park, KS
Overland Park Residential Real Estate

Karen - Commission and/or bottom line ....AND. they think it's easy - like all we do is put a sign in the ground.  I think a lot of sellers just like to feel in control too.

May 18, 2009 02:51 PM
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

BTW, I know of several people that have been through more transactions that the average real estate agent.  They may do just fine selling on their own.  We shouldn't vilify those that choose not to work with an agent.  It is a free country... well, still mostly free. 

May 18, 2009 03:16 PM
Holly Weatherwax
Associate Broker, Momentum Realty - Reston, VA
A Great Real Estate Experience

Sometimes that commission can be the difference between owing money to the bank and breaking even in this market.

Obviously, I think that it makes sense to use a Realtor--or I would not do it for a living--but when I have friends/future clients who are convinced that they can sell it themselves, I tell them to go ahead and try.  Who wants a client who thinks they can do a better job or thinks they are paying you for nothing? Most of them end up eventually listing their homes anyway.

May 19, 2009 04:48 AM