For Sale By Owner – FSBO
A For Sale By Owner – FSBO property, also know just as a FSBO, pronounced fizz bo, is a property that is put up for sale by the homeowner, without the assistance of a Real Estate Professional.
Some homeowners believe that they can cut out the real estate agent, and thus net more profit from the sale of their home by selling it themselves. Approximately 5% of homeowners choose this route in an attempt to sell their home.
As a real estate agent, I can tell you that this is usually not a good idea to try to sell your home yourself. There are many reasons why hiring a licensed realtor to list your home is a good idea.
The typical commission paid to a realtor for the sale of your property ranges from about 5% to 7% of the sold price. In almost every case, this commission is well earned and justified.
1. Realtors list your home in the Multiple Listing Service. By having your home in the MLS, you are exposing your property to every other realtor in the area.
When a realtor has a client that is looking to buy a home in your area, they go into the MLS, and find the available homes that fit the buyer’s criteria, such as number of bedrooms, baths, square footage, finished basement, price range, etc.
If your home is in the MLS, and fits the criteria, the buyer’s agent will send it to the buyer via email, or they will call them and tell them about it.
If the buyer likes it from the pictures, and the features of the home, they will set up a showing. Without having your home in the MLS, you are missing out on 90% or more of the buyers in the market for a home.
2. Realtors can advise you on how to prepare your home in order to receive the best price, and the quickest sale. A realtor is an expert on knowing that clean, uncluttered, and updated sells best.
They will tell you, for instance that kitchens, and master bedrooms sell homes. It may be wise to update your kitchen, and/or your master bedroom. They will tell you if a coat of paint is needed in a certain room or rooms due to loud, or outdated colors.
From my experience, many buyers cannot look past cosmetics of a house that are outdated, or in bad condition. Also, curb appeal is important, so it may be a good idea to put a fresh coat of paint on the outside of the home, along with some manicuring or landscaping of the lawn.
As homeowners, we sometimes don’t realize that with a little work, and a small investment, we can significantly increase the value of the home, and help it sell a lot faster. Realtors also know what other homes in your area have been selling for.
They will run comparables to make sure that your home is priced accurately, and fairly. If you get this wrong, which many For Sale By Owner – FSBO listings do, the home won’t sell. Many people believe that, due to an emotional attachment, their home is worth more than it really is. If it is priced too high, it simply won’t sell.
3. Realtors have a network built up of other realtors, lenders, and many other people in real estate related businesses that can help them find buyers. Also, within a real estate professional’s office, there are many times dozens of other agents.
These offices put priority on selling the listings within their office, so a listed home will garner a lot more attention as a result. These other agents will hold open houses, place advertising, set up showings, and tell their own networks about the home.
When you have a large number of realtors pulling together to sell a home, it sells faster, and can even command a higher price.
4. Buyers don’t like viewing homes when the homeowner is there. Ever wonder why realtors insist that the homeowner is not there during showings?
It is primarily because the potential buyer won’t feel at ease. They will be much more guarded in what they say, and do, so as not to insult the homeowner.
There is more of a feeling of invading someone’s space that can be quite uncomfortable. If a buyer doesn’t feel comfortable, they are more likely to hurry through the showing, not ask as many questions, and, as a result, not put the particular home on their ‘short list’.
5. Realtors handle every aspect of the sale. When a home is listed, the Realtor will take charge of the sale. They will take care of all the paperwork, get all the information to include in the Multiple Listing Service listing of the home, so as to accentuate the positive attributes, and then put the home in MLS.
They will coordinate the lenders, title company, inspectors, appraisers, and any other aspect of the home sale. They will set up the lock box on the home, set up any showings, place prominent signs in yards, and on street corners, place advertising online, in magazines, in local grocery stores, and in other local businesses.
They will negotiate offers, coordinate signings, and do whatever is necessary to ensure that the home moves toward closing, and ultimately closes.
If an amateur attempts to undertake this process, he or she is likely to encounter hurdles that they simply cannot overcome. In other words, if you go the for sale by owner – fsbo route, you will have to take on all of the paperwork, and the other aspects of the real estate transaction.
6. Realtors are liable should problems arise. Many things can go wrong during the period that a home is for sale. There can be theft, or damage to persons, or property during showings.
There can be mistakes in the paperwork, such as errors, and omissions, know as E & O. Once a home is listed with a Realtor, the home owner is protected against many of these issues which could, and occasionally do arise in the course of the home sales process.
If a homeowner elects to sell the home himself with a For Sale By Owner – FSBO, he may be fully liable for any problems which occur, which may result in a nightmare scenario.
7. Security If you place a For Sale By Owner – FSBO sign in your yard, you are inviting anyone and everyone to come knock on your door.
They could have bad intentions, and if you let them in, they could seek to do you harm, your children, or perhaps to case the place to see what might be worth stealing. If you happen to be a woman living alone, you could be placing yourself in a very unsafe scenario.
On the other hand, if you list with a Realtor, everything is documented. Before Realtors represent a client, they do their due diligence. They know their clients name, some of their history, their credit status.
They determine if they are a ready, willing, and able buyer. Realtors insist that the homeowner and any other occupants are gone during showings. I don’t like to be this cynical, but in today’s world, one can’t be too careful.
If time and money don’t matter to you, then go the For Sale By Owner – FSBO route.
Some things are just worth the money. Don’t be penny wise, and pound foolish. Hire a good real estate agent to sell your home!
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