FSBO Is Tempting, But Beware of Pitfalls
July 14th, 2008 categories: Sellers
“For Sale by Owner” signs often pop up in front of houses only to be replaced by a Realtor’s sign in a few weeks. It’s tempting for homeowners to try the do-it-yourself approach, but beware of pitfalls in doing so. Most people have no idea what they’re getting into when trying to sell their homes. That’s why the for sale signs change quickly.
Many sellers think they’ll save money by not using a Realtor, but using an experienced real estate agent for selling or buying will save money. Realtors have access to the latest market information for determining your property’s value and can find buyer matches through the multi-list service. They also can provide information on schools and community amenities to potential buyers.
Consider these things before trying to sell your home:
- Showing your home at all hours of the day involves a lot of time.
- Advertising can be expensive.
- Open houses are time consuming and people must be carefully watched.
- A contract is a legal document that must be exact.
- Realtors have access to more potential buyers through the multi-list service.
- Realtors can pre-screen and pre-qualify buyers.
- Realtors also have access to more market information.
More than anything, most people don’t have the time and knowledge to sell real estate. It’s not as simple as it sounds; it’s a very time-consuming and complicated process. By using a professional, sellers and buyers get worthwhile expertise and protection.
I would put the caveat “for most people” in there. For a few people out there (granted not many), they’ll come out ahead when they try to sell their homes without an agent. It is a lot of work, but it can be done.
To your points:
1. Showing your home at all hours of the day involves a lot of time.
-True, but you can have people make appointments for times that are more convenient for you.
2. Advertising can be expensive.
-True for a lot of the traditional advertising places. Non-traditional advertising can be both effective and cheap, if you know where to go.
3. Open houses are time consuming and people must be carefully watched.
-Open houses for the FSBO crowd are a waste of time. Setting appointments with prospective client will ensure that only people who are generally interested in the house will come to look.
4. A contract is a legal document that must be exact.
-True though some real estate agents don’t even know what to look for. I was surprised when the buyer’s agent actually weakened the buyers’ position through a revision of the contract.
5. Realtors have access to more potential buyers through the multi-list service.
- True although again, you don’t have to go through the multi-list if you’re placing your advertisements in the right places.
6. Realtors can pre-screen and pre-qualify buyers
- Also true, although the seller can ask for these documents as well as a condition to acceptable an offer on the property.
7. Realtors also have access to more market information.
- Perhaps, although with the internet, a lot of these resources are now much more widely available then in the past, especially in Allegheny County.
Basically, there’s a load of work to be done, say 100-200 hours, in selling a house. If the seller hires an agent do to the work, the agent keeps the money. If the seller does the work without an agent, the seller keeps the money. It all depends on whether or not the seller is comfortable and competant in selling their house.
Matthew,
Great feedback. I agree with you that some people are definitely equipped with the knowledge to sell their home on their own - and can save a good deal of money in doing so. I actually have a friend of mine that had their home listed with a family member and ended up doing the advertising themselves - ultimately finding the buyer on their own. And still ended having to pay a commision!
I also totally agree with you comment to point #4 - there are a lot of bad realtors out there. You always want to do your homework on who you choose to work with.
Thanks for your feedback.