If so, you’re not alone. According to recent statistics, For Sale By Owner (FSBO) listings account for about 10% of all home sales. While going the FSBO route can save you money on real estate commissions, there are some potential pitfalls that you should be aware of before you get started. Here’s a look at some of the most common FSBO traps.
Improper Marketing
You’ve probably seen them out there: photos of properties that are plastered over telephone poles, crumpled flyers tucked away on car windshields and digital ads that never fail to appear even when you’re searching the web for totally unrelated items. It all falls under the umbproprdiy of marketing – yet too often it strays into more questionable realms with photos that are less than realistic or photos courtesy of Google Earth and misleading information spread via word of mouth. While photos, fliers, and digital ads are all great ways to help sell a property, there’s no denying improper marketing can do far more harm than good if not done right. So before you start pushing out photos and promoting your piece of real estate online, be sure to ask yourself what impression you want to leave prospective buyers with – put in the extra effort to guarantee it’s a positive one!
Required Disclosures Can be Missing or Inaccurate
When preparing all documents to sell your home, keep in mind that states and counties can require certain addenda be added. Failure to do so can result in being unable to reach settlement- or the buyers walking away during closing. It can be a tricky task to get all the proper disclosures accurately filled out, but it pays off in the end knowing you have a hard contract and are providing the buyer all the correct information. So if you’re looking to ensure that your documents are complete and up-to-date, give yourself a double check on the states’ and counties’ specific requirements. A few moments of extra scrutiny could save you time and money down the line!
You Will be Required to Do All Negotiating
If you are selling your home without the assistance of a real estate agent, it is important to prepare yourself for the negotiation process that lies ahead. Buyers will submit offers to you, and it is your job to decide what, if any, offer you accept, or what you would like to negotiate on. One thing you need to remember when selling on your own is to focus on what matters most. Do not nitpick every little thing in the contract, as the buyer may be unwilling to negotiate and you could have cost yourself a sale.
Everything in the contract is negotiable, but you do want to make the buyer feel like you are meeting them somewhat in the middle. Improper negotiation tactics can be the difference between a property sitting on the market for months, and selling your home within days.
FSBOs Sell, On Average, Slightly Less Than Homes Sold by Real Estate Agents
When it comes to FSBOs, statistics show that these properties do, on average, sell for slightly less than those sold by real estate agents. While this may sound discouraging, it doesn’t have to be a bad thing! In fact, it could be your ticket to success if you price your home accurately and make sure any buyer’s offer is fair to the market value. Knowledge is power when taking the FSBO route – and with that in mind, there’s no reason why you can’t achieve an awesome outcome on an equally awesome price! Also, you’ll be saving on the commission of the Realtor, so if you do each step correctly, you may be able to save more money along the way in the end.
If Something Goes Wrong During the Sale Process, You Will Have No One to Turn to For Help.
When it comes to real estate transactions, the last thing you want is for something to go wrong. Unfortunately, if anything does happen during the sale process, your options are limited on where to turn for help without an agent. Agents offer a variety of resources that you just don’t have access to as a homebuyer or seller. Having someone who can guide you through any tricky real estate situations is a considerable perk – and can sometimes be worth the high commission fees! But it is not impossible to address these issues without an agent. You may consider reaching out to a lawyer with experience with this particular problem. It may cost you extra money, but could save the transaction. Another method would be to contact a brokerage that specializes in FSBO listings – they can help from the beginning or if you get stuck during the process.
FSBOs can be a great way for savvy home sellers to make some extra money, but there are a few important things to consider before diving in headfirst. It is necessary to do your due diligence and research the marketing strategies that will ensure maximum engagement. It’s also important to read up on all legal requirements so as not to miss or misreport any information. One should also be prepared to do all of their own negotiations, which can put sellers at a disadvantage. On average, homes sold through real estate agents make slightly more money than those sold by FSBOs – however, that benefit comes with the additional cost of paying an agent’s commission upon sale. Lastly, if something goes wrong during the sale process there won’t be an expert on tap to guide you with solutions like there would be when employing a real estate agent. Thus it is best for home sellers to weigh the pros and cons of FSBOs against traditional options in order to decide which avenue is best for them.