Wednesday, January 24, 2018 / by Hardy Real Estate Group
Common Problems When Listing A Home "For Sale By Owner"
Sure, selling a home own your own may sound like a great idea, you think you may save some money... but besides the time and stress that goes into taking on this daunting task, there are other problems that arise when listing a home "For Sale By Owner" (FSBO).
Our listing specialist at the Hardy Real Estate Group, Terry Scollin has highlighted some of the most common problems he heard of after home sellers came to him to list their home when it failed to sell FSBO.
1) Scams in the Market Place - Fraud is out there! As much as we feel sheltered to it with a "that will never happen to me" mindset, it is real and it is there. From fraudulent paperwork, to foreign deposit checks and distribution of personal information to faulty third-parties, scammers are hungry and will do anything to earn extra cash.
2) Liability for the Seller - We all make mistakes and that is okay, sometimes. When it is not okay is when a FSBO gets caught in the middle of a sticky situation because they either disclosed information about the house incorrectly, or didn't disclose information all together. A seller can get stuck paying out a lot of money due to the liability from information presented inaccurately. A licensed Realtor is an expert in selling homes and would have caught any errors with listing the home, plus, if any mistakes did slip through the cracks, a Realtor is able to cover it with E&O insurance.
3) Paperwork, paperwork, and more... paperwork - From contracts, to legal documents, to agreements and records... there is an abundance of paperwork that goes in to legally listing a home on the market. Inaccurate paperwork falls back onto the previously mentioned topic, seller liability. Not every contract is "one-size fits all" and each transaction should be handled on a case by case basis, per the needs and wants of the seller. A Realtor knows the ins and outs of of the correct paperwork for every transaction and can make the paperwork seem effortless.
4) Bad Deals Happen - When purchasing a home with a Realtor, the buyer does not have to pay the Realtor anything. The seller pays their listing agent (typically 6% of the home sale price), which then the listing agent then splits with the buyer's agent. For this reason, it is far more common for home buyers to use a Realtor when searching for a home, than not using one at all. FSBO's often list their home and then refuse to accept an offer because they would have to pay the buyer's agent what the listing agent typically would pay out of their commission. Let's face it, how many home buyers do you know that are purchasing a home without a Realtor? FSBO's will commonly be stuck paying a commission anyway.
5) 15% Less Average Sale Price - Sure, a FSBO may save money on the commission side of selling their home, but without the proper marketing, negotiations and sales techniques these homes typically have a 15% less average sale price. Less marketing means less people through the door, with less offers in hand. Unrepresented sellers do not have the proper sales techniques and negotiating skills to get the highest price from an offer presented to the home.
6) The Market Is Hot, but not always for FSBO's - Homes listed as "For Sale By Owner" typically spend more time on the market than homes listed with a Realtor. Reason being, there is no one running the marketing, paperwork and sales techniques.
7) Inspections Are A Headache - Reflecting on the fact that homes typically sell for 15% less when listed FSBO, this extra money also stems from home inspections! FSBO's typically lose money when improperly negotiating home inspections - without Realtor representation, a buyer could swindle a seller into adding on a new roof, fixing the a minor (or major) stucco issue or even ordering all new appliances!
So, to conclude, if you would like your home to sit on the market for a very long time, are an expert at reading/properly executing legal documents, or if you don't mind sacrificing thousands of dollars in listing price - give FSBO a try!
When you are ready to list your home with a Realtor, give us a call. You can continue to stick to your day-to-day life and allow the experts to take over and get your home SOLD.
If you are not thinking about selling any time soon, but are interested in finding out what your home is worth - feel free to use our Instant Home Valuation Tool!
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Hardy Real Estate Group | Keller Williams Devon-Wayne
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