Why Do For Sale By Owners Fail

Real Estate Agent with RE/MAX Executive Realty 91362

Why Selling a House Without a Real Estate Agent is Difficult

It's a sad truth that all too often, homeowners that go down the "For Sale by Owner" route fail. While it may seem like a great way to save on commission charges, unfortunately, it goes wrong frequently.

There are many pitfalls when trying to sell without a real estate agent; we'll take a look at some of the big ones. Selling a home without a Realtor comes with significant risks of netting less money and taking much longer to complete the process — the exact opposite of why people try to sell by owner.

Not Understanding How To Prepare Their Home

A big part of the success of any house sale comes through preparing the home before it's listed. If you jump the gun and list your home without putting the work in to make it's as attractive to buyers as possible, you could be wasting your time.

Ask yourself this - would you want to buy a home that's full of clutter? What about a house that needs some minor repairs? Would it put you off making an offer if the house required a significant cleaning? The answer is obvious, but many people who are trying to sell their home neglect preparing before listing all the same.

If your home creates a wrong first impression to potential purchasers, you will have great difficulty in selling. One of the most substantial roles of a seller's agent is to educated sellers precisely what they need to do to make their home market-ready.

Fixing blatant defects is also advisable. The buyer's home inspection will be a significant hurdle to clear as well. Not paying attention to a home's condition will be a common deal-breaker. Homeowners should have a firm grasp of what to expect from a home inspection.

Being Unaware That They Should Screen Buyers

When you are trying to sell your home through the for sale by owner method, you will spend a significant amount of time dealing with potential buyers. But are you wasting your time?

If you aren't or don't know how to screen potential purchasers, you definitely will be expending a lot of energy on leads, which will go nowhere.

When trying to sell without a real estate agent, you need to be fully aware of which interested parties are worth focusing on. Take, for example, the terms pre-qualified and pre-approved. When it comes to a loan, there is a big difference between the two, and if you don't understand this, you will have a lot of people wandering through your home without getting offers.

Quite often, when selling a home without a Realtor, an owner will accept an offer from a buyer who has a property of their own to sell. In many cases, this kind of offer would never have been taken if the FSBO realized what kind of position they were putting themselves into.

An exceptional real estate agent would be providing them guidance and explaining the risks of accepting a home sale contingency.

Dealing With Potential Buyers

Real estate agents spend a large amount of their time dealing with inquiries from interested people, then coordinating showing the property. This can be a time-consuming and challenging job which can be easily overlooked by the for sale by owner crowd. If you can't show your property when a buyer wants to, you will fail!

Not making your home available on a buyer's schedule is one of the top reasons for sale by owners' have a lack of success!

If you aren't able to stay on top of this administrative work, you will find you are missing out on genuine leads. This will end up with your house taking longer to sell if it ever does.

Pressurizing Potential Purchasers

It is difficult to take a step back from your property and show it to potential buyers without selling them on how great it is. If you put the pressure on and don't allow the buyers the space to view your property, you can very quickly put them off.

Potential buyers will also find it difficult to say anything negative about your home in front of you. They won't be able to talk openly in your presence, and this can leave them with a negative experience when walking around your home.

You should plan on staying out of the way when a buyer is viewing your home. Don't try to be a salesperson. Be available to answer questions, but don't hang all over them like a puppy dog.

Lacking An Understanding Of The Contract

Home purchase contracts can be confusing if you aren't familiar with them and the process surrounding their use. Once an offer has been made, some negotiation may be needed over the price and the terms of the contract.

There are clauses and contingencies which you need to understand to negotiate the correct deal for the sale of your home. If you get this wrong, you could find yourself in a lot of trouble.

Before ever signing an offer when selling sale by owner, make sure you consult with a real estate attorney first.

Dealing With Home Inspections

Home inspectors will typically find a few things wrong with even the most well cared for property. It is all too easy for the homeowner to believe that there is nothing wrong with their property. Then when the inspector says differently, they can become defensive, refusing to correctly handle the situation and repair the problems. Avoiding home inspection deal breakers is critical.

Marketing Mistakes Are Made With FSBO's

One of the most significant mistakes of not using a real estate agent to sell your home is a lack of marketing. The real estate agent will be able to give the house the marketing exposure it needs. While the for sale by owner seller will find it difficult or impossible to get the same marketing reach. And, if the house listing isn't seen by the right people, it won't be sold.

It cannot be emphasized enough how powerful the internet is in selling a home. One of the top reasons a for sale by owner fails is a lack of online exposure. Want a bidding war on your property with multiple buyers fighting over it?

Well, I will tell you that when selling a house without a REALTOR that will NEVER happen!

Not Knowing The Value Of Their Property

It is effortless to value your home higher than it is worth. This will lead you to set the price above where it should be. To get around this, a home appraisal should be sought.

A large percentage of buyers who are selling a house for sale by owner overprice it substantially. If you don't want to pay an appraiser, at least ask a real estate agent for help. Most agents will gladly offer a market analysis in hopes of listing your property when things don't work out.

Sealing The Deal

The job of selling the house doesn't end when you accept an offer and collect the earnest money deposit. There is much more to do before closing, and if you get this wrong, the sale can fall through. Timelines need to be followed, and tasks completed to make sure closing takes place.

Make sure you lean on an attorney if you are not going to use a real estate agent. You will need to keep track of all the essential dates in the contract. Holding a buyer's feet to the fire will be critical. These are the tasks that normally a real estate agent would be doing.

Conclusion on Why For Sale By Owners Fail

Selling your home without a real estate agent may seem like a great idea, but it is very easy to underestimate what you will need to do. This is why less than 10 percent of homeowners successfully manage to sell this way, and why you should think carefully about doing it all yourself.

If you decide that your attempt to sell for sale by owner isn't working out and you need a real estate agent to help, make sure you conduct thorough interviews.

Hiring a terrible real estate agent is almost as bad as trying to do it yourself. You will probably run into just as many problems. Make sure you meet with at least three agents before making such a critical decision. You'll be glad you did.

Other Helpful Real Estate Resources

  • What is a pocket listing - when selling your home, you may be talking into giving a real estate agent what's known as a "pocket listing." With a pocket listing your home is held in-house with very few people knowing it is for sale. Essentially this kind of agreement benefits a listing agent and not a seller. When you want to sell your home for the most money, you'll want to avoid this situation. It will be just like selling for sale by owner - You will have very little exposure!
  • Types of rental property loans - are you considering becoming an investor in rental properties? If so, you will want to know your options for getting a mortgage. Find out some of the best sources of getting funding when purchasing a rental investment home.

Read these additional articles to make excellent decisions when buying or selling your next home.


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Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.


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Show All Comments
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Hi Bill Gassett - there are so many reasons why this fails.  It costs more money in most cases.

Dec 30, 2019 12:40 PM #1
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope 2020 is a great year for you.

Jan 01, 2020 02:29 AM #2
Christi Farrington
Dagny's Real Estate - Wilton, CT
~ Your representative in Fairfield County, CT

Always great information, Bill! Thanks again for another spot-on, informative post!

Jan 02, 2020 09:38 AM #3
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is very good information to share with prospective home sellers.

Jan 03, 2020 07:38 AM #4
Laura Filip
Laura Filip Broker , Opening doors for All Seasons of Life - Whitesboro, TX
What can we do for you today?

Thank you for sharing the information on FSBO. Selling a home is not as easy as one might think it is. Had an FSBO call me to list the home, they had a buyer who went silent and never showed up for the closing. No earnest money no proof of funds nothing at all was given. Interesting thought. 

Jan 29, 2020 07:39 AM #5
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Bill Gassett

Metrowest Massachusetts Real Estate
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