5 Reasons Not to List As A For Sale By Owner

By
Real Estate Agent with Keller Williams Realty Madison

With home prices on the rise and a lack of inventory in zip codes 22901 and 22911, homeowners may consider listing their home For Sale by Owner (FSBO). 

Here are the top 5 reasons why that might not be the best idea:

1. Exposure to Prospective Buyers
Recent studies have shown that 95% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. I have an Internet strategy to promote the sale of your home. Do you?

REQUEST A HOME VALUATION

2. Results Come from the Internet
Where did buyers find the home they actually purchased?

49% on the internet
31% from a Real Estate Agent
7% from a yard sign
1% from newspapers
The days of selling your house by simply putting up a sign and placing a classified ad in the newspaper are long gone. Having a strong Internet strategy is crucial.

3. Negotiations and Knowledge
If you list For Sale by Owner, you should be prepared to negotiate.....

.....with the Purchaser and the Purchaser's Agent - regarding: price, earnest money, closing date, closing costs, contingencies, deadlines and repairs
.....with the Appraiser - if the appraised value is lower than the agreed upon sales price, the Purchaser might not be able to get the mortgage they need to buy the home.  Do you know what options are available if this happens?

REQUEST A HOME VALUATION

 4. Selling FSBO Has Become More And More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people selling by FSBO has dropped from 19% to 8% over the last 20+ years.  The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.  Even the founder of ForSalebyOwner.com hired a Realtor when his condo didn't sell after 6 months on the market as a FSBO"The condo soon attracted multiple offers and ended up closing recently for $150,000 more than the original asking price."

5. You Net More Money When Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

A study by Collateral Analytics revealed that FSBOs don’t actually save anything, and in some cases, may be costing themselves more, by not listing with an agent. One of the main reasons for the price difference at the time of sale is: 

“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.”

If more buyers see a home, the greater the chances are that there could be a bidding war for the property. The study showed that the difference in price between comparable homes of size and location is currently at an average of 6% this year.

Why would you choose to list on your own and manage the entire transaction when you can hire an agent and not have to pay anything more?

REQUEST A HOME VALUATION

Bottom Line
Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

If you're thinking of selling a home in zip codes 22901 or 22911, please call 434-282-7936.  Let's talk.

 

All information deemed reliable but not guaranteed

Orignally posted on my KCM Blog 

Also posted at http://www.cvillevahomesearch.com/blog/5-reasons-not-to-list-as-a-for-sale-by-owner/ 

Posted by

 

Karen Rice, Realtor, Certified Residential Specialist, Military Relocation Specialist 

 Keller Williams Realty Madison

1593 Hughes Rd, Ste A

Madison AL 35758

256-319-3700 - office

434-282-7936 - Direct (call or text)

Madison AL Homes For Sale 

Madison AL Home Values

     

All information deemed reliable but not guaranteed

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Rainmaker
114,451
Denise Copeland
Mirsky Realty Group - Palm Beach Gardens, FL
Jupiter Abacoa Sales & Beach Front Luxury Homes

Good advice! Now if we could make them drink the koolaid! Some of them are determined to try it on their own.

Dec 27, 2017 02:05 PM #1
Rainer
65,994
Golden1 Agents
San Mateo, CA

Thanks for sharing.

Dec 28, 2017 01:31 AM #2
Ambassador
1,853,840
Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Such great advice. Most FSBO's have no idea of the small details that can really sidetrack a transaction. Hope you get some calls for the home valuation offer in your post. D  

Jan 22, 2018 09:14 AM #3
Rainmaker
3,172,867
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Great advice for FSBO and wish more FSBO would be wise and read your article.  Make it a day day!

 

Jan 22, 2018 09:33 AM #4
Rainmaker
804,383
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

I'm not sure the Collateral Analytics study conclusions can be broadly applied.  The study only focuses on 13 highly populated counties.  Only 150 counties (of over 3,000 counties) in the US comprise 50% of the population.  The study uses AVM methodology as a tool to derive their results.  AVM models do not work well in low population housing markets.  Extrapolating high population urban results to less populated and/or rural areas is risky.

The Collateral Analytics study also indicates it was a normal market. “The data used for this study came from a rather normal housing market, not one in rapid rise or decline, and covered all of 2016 and the first half of 2017.”

A quick review of the markets the study covered showed the following info:

·        Clark County, NV, “The median sales price of previously owned single-family homes in Southern Nevada in June was $257,373. That’s up 2.9 percent from May and 9.5 percent from June 2016, according to a new report from the Greater Las Vegas Association of Realtors.”  Las Vegas Review-Journal 07/06/17

·        Cook County, IL, “Feb 2017 median home price was $210k, a 12% increase over Feb 2016” Illinois Realtors Blog 03/22/17

·        King County, WA,  “median home prices grew 15.7% compared to a year ago”  Seattle Times 05/04/17

·        Prince George’s County, MD, “Prices rose fastest in Prince George’s County, climbing 19% from Feb 2016 to Feb 2017”  WA Post 03/31/17

Double-digit median price increases year over year is a normal housing market? 2.9% increases month over month?  Sounds more like a rapidly rising market.  Only one of the counties in the study had a median price increase less than 5% (Fairfax County, VA 4.8%).  According to Keeping Current Matters, who provided your blog, 38% of the US states had year-to-year price appreciation greater than 6%.  Washington (including Seattle & King County) had 12.9% appreciation statewide.   

I do not believe the study was done in a “normal market”.  

Also, it does not appear the study excluded Flat Fee Listings, which are typically used by FSBO sellers to advertise in the MLS.  Including Flat Fee Listings as agent represented most likely leads to overstating agent represented results and under-representing FSBO results.   

Finally, one comment my stat professor consistently mentioned: "Correlation does not necessarily mean causation".  

Feb 27, 2018 05:07 PM #5
Rainmaker
2,020,715
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Southlake, TX
Selling Homes Changing Lives

This is really, really, good information!!!

Have a wonderful day!

Jun 20, 2018 09:51 AM #6
Rainmaker
671,306
Sharon & Bruce Walter
Keller Williams Realty Lafayette, IN - Lafayette, IN
West Lafayette homes for sale

Karen, this is an informative post and sadly many FSBO's leave money on the table because they thought they would save paying a real estate commission.

Aug 17, 2019 06:35 AM #7
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