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Why FSBOs Are a Bust!

FSBOs, better known as For Sale By Owners, are a bust! Do you honestly think you can do a better job at selling your home than a professional? Are you familiar with your competition and know how to price it right? FSBOs are a bust for many reasons. I was just reminded of that yet again this afternoon when I tried to setup a few showings for tomorrow afternoon. I have a client looking for middle to high end lakefront homes, pre-qualified and ready to go. I call up 2 of the listings on our MLS and both are "entry only" meaning they are for sale by owner, but the owners paid to get them on MLS. The first one calls back after I left them a message and says "I'm sorry, but I cannot show you my home tomorrow or Wednesday, I'm just too busy. Maybe we can try for Thursday or Friday?". The second homeowner answered the cell phone and said "I work until 6PM everyday, I'll have to show it after that time or only on the weekends.". Now both of these homes have been on the market for some time and are beautiful homes. Given the market is tough right now, but don't you need to do everything in your power to accommodate if you want to sell in this market? If you can't show your home, get a REALTOR®!

Top Reasons FSBOs ARE a Bust:

1.) Pricing is wrong - usually too high!
2.) Availability - Homeowners are not available around the clock like the listing agent could be, thus losing showings because of lack of accommodating
3.) Staging - Some homeowners don't realize what they need to do to make their home show better
4.) Inexperience & Personal Attachment - Homeowners can't show a home as professionally and objectively as an agent can. They have a personal attachment to the home and face it, they all argue why their home is the best, even when it's not!
5.) Marketing - In today's market you need a professional to advertise!

Posted by Kathleen Cooper, Broker, SRES, REALTOR® on 07/27/2009 01:56 PM

Comments (9)

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9 Comments on Why FSBOs Are a Bust!

JUL

One of the questions I used to ask FSBOs, when I worked with them, was when they planned on showing the home. They always had to show in the evenings and weekends. I would ask what would happen if they had a buyer who could only see it during the day, during the week, and they never had an answer because they would "have to take a personal day".

Do you want to sell or not?

Exactly! Everyone is on a different schedule these days! You need to hire someone that can understand and accommodate that so you don't lose buyers!

Sincerely,

Kathleen

Kathleen - Only five reasons? Most, if not ALL FSBO's are difficult to negotiate and communicate with. They do not understand what is usual and customary in our profession. Sellers almost always provide OTP for buyers along with a home warranty. Sellers almost always provide some sort of concession as well. Many FSBO's scoff at the idea of providing any closing cost assistance yet they'll reduce the price by 3 percent! LoL! It doesn't matter, it's a wash!

FSBO's are usually the know everything types anyway.

JUL

Greg- LOL! Yes, I narrowed it down to 5, although I know there are many more! James got on me because I forgot to mention...I called a FSBO to setup a showing on his entry only listing and do you know what he told me? 1.) They have an accepted offer (and it's not UAG on MLS!!!) and 2.) They don't have 1st right of refusal when there is a contingency of the buyer's home getting sold!!! DUH! Ok, Ok...I'll leave them FSBOs alone. But when you REALLY want to sell, give us a call!

Sincerely,

Kathleen

AUG

Many of the points you raise are in fact true, however, do you think just telling someone they are wrong is going to make them change their mind? Have you thought about why so many people are considering going down the FSBO route? It is only by understanding the motivation behind an action and addressing it directly will you be able to steer it in the direction you want it to go.

Just saying how professional you are and how 'foolish' a seller is for not choosing you, is hardly a compelling argument to get them to use you is it?

Hi Chris,

I think you are totally missing the point of this blog and I see that you run a website to collect money for listing seller's and realtor's listings. This blog is created to inform Realtors and the general public about what goes wrong with For Sale By Owners. I don't even market to them anymore, they are in MOST cases, for sale by owner because they want TOO MUCH for their home. I don't take over priced listings. If a seller wants to list too high from my recommended list price, I say thanks, but no thanks. I only spend my time marketing to expireds these days and have had great success selling them.

I'm sorry if my blog offended you or your business. It was written on recent personal experience and written to bring awareness, not to say "you're foolish, I'm a professional...hire me!". If someone believes that Realtors are not professional and they're useless in the business of selling their home, I don't need to convince them to work with me, I've got enough clients that WANT to work with me and don't have a hard time finding motivated new ones.

Sincerely,

Kathleen

AUG

Hi Kathleen

Your blog did not offend me in any way; in fact as I stated in my comment many of the points you raised are quite true. My comment was aimed at addressing what is a very common tendency amongst traditional realtors which is to pour scorn and ridicule on sellers for choosing the FSBO route rather than addressing the reasons why they should feel compelled to do so in the first place.

I am happy you have the luxury of many clients from which to choose, but I can assure you many traditional realtors do not. Ridiculing sellers who are genuinely trying an alternative route is a little disingenuous when all they are doing is trying to find something that suits them better than that which has been traditionally on offer. Sure they can make mistakes and often do, but working together is surely a better way to achieve common success for all concerned than forcing people to choose one side of the line or the other don't you think?

Best of luck

Chris

Hi Chris,

It is not by luxury that I have clients to work with, it's by very hard work and persistence, mixed in with a lot of money and time spent marketing our independent brokerage and ourselves. We work very hard not to be your average "traditional" Realtor. I agree with sellers that not all, and maybe not most Realtors are very good at their job. I agree that if they're hiring the average Realtor with a license, they should probably just save themselves on the commission and go For Sale by Owner. However, if they take the time to interview professionals, maybe 2-3 of them, they should be able to see the value in not trying to sell on their own. Unless they are in the business of fixing up houses and can be available to show the home when buyers are available, they have no business selling themselves.

I have to admit, I did start off my career marketing myself to FSBOs and had some success with the listings I took on, but I feel it can be like talking to a wall trying to approach them in most cases and your time can be better spent on other means of prospecting. If a FSBO contacts me and needs a CMA or would like to be listed on my website, I'll be glad to do it for them. I just don't think they should be allowed to list their properties in our Multiple Listing Service and not be held responsible for not changing properties to Under Agreement when they have accepted an offer and if they are not going to show the property when it is requested with much notice.

Sincerely,

Kathleen

AUG

Hi Kathleen,

On the basis of what you have said it seems we really are not too far apart in our outlook, but I think your own comments do highlight the very real problem that traditional realtors face (and I do not use the term traditional in a derogatory sense)

You yourself state that if hiring the average Realtor, a seller may as well go the FSBO route. Another words that suggests you feel half of all the licensed Realtors aren't providing a worthwhile service - and I suspect sellers feel the same!

You also quite rightly state that by interviewing a few professionals they would find someone that could make a world of difference to their sale. Again I absolutely agree. However, you and I both know Realtors in general by nature have to be smooth talkers and very persuasive. How can we reasonably expect the average homeseller to be so skilled in the art of interviewing that they can see behind the polished rhetoric of a good salesman (of him/herself)?

IMO if the drift to FSBO is to be halted, Realtors will need to clean up their own industry, because every bad seller experience does not just reflect poorly on that Realtor, but the Real Estate industry as a whole. Couple this to recognising and incorporating the desires of many modern day sellers and there would be little need for anyone to go FSBO.

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