We get it! Interest rates are low. The market is hot and even though we are in a pandemic, buyers are coming out of the woodwork! Who needs a Realtor to sell a home in this kind of market? Let’s save the commission and sell ourselves. Put the FSBO sign in the yard and we’re good to go… right? Wrong!!
The National Association of Realtors reported less than 10% of For Sale by Owner homes sold in 2019. There are numerous risks and pitfalls accounting for this low number that you want to be aware of before deciding being a FSBO is for you.
1. Lack of Preparation
Preparation is key! Many For Sale by Owners fail to properly prepare their home for sale prior to putting the sign in the yard. How you live in a home and how you sell a home are 2 very different things. Prospective buyers don’t want to come into a home and see toys scattered around the family room, dirty carpeting, or scratched walls and moldings. Some of the most important preparation tips are to:
- Freshen paint inside and out
- Arrange furniture for good traffic flow
- Complete your ‘honey-do’ list
- Make it shine
- Improve your curb appeal
2. Incorrect Pricing
Correctly pricing a home for sale takes practice, experience, and market knowledge. Many For Sale by Owners like the idea of pricing high to test the market and then lowering the price further down the road if it does not sell. But, if buyers think the home is overpriced they won’t even look at it resulting in a longer market time. If a home sits on the market for a while they begin to wonder what is wrong with it and steer clear. Pricing your home too high will eliminate potential buyers who could buy if the home was priced correctly.
3. Lack of Screening Buyers
Most FSBO sellers have never sold a home before and lack the experience to screen potential buyers, wasting precious time and money. Realtors know the questions to ask to determine both the seriousness and the qualifications of the buyer. You don’t want just anyone walking through your home. You want to know that he or she has been pre-approved, not just pre-qualified for financing. Pre-qualification means a buyer MAY qualify for a loan based on information they have provided to the lender. Pre-approval, on the other hand, means the lender has VERIFIED income and debt documents taking the guess out of loan approval. The last thing you want is to have a contract on your home fall through 30 days later and you are staring all over again.
4. Lack of Availability
Selling a home is a full time job. Most sellers don’t realize the time Realtors spend responding to inquiries, weeding out lookie-loos and unqualified buyers. If you are working full time, have a family, and a household to run, do you have extra time in your day to deal with inquiries? And let’s face it… buyers are the same as the rest of us. They want instant gratification. When they decide they want to see a house, they don’t want to wait until you are available next weekend. They want to see it NOW! Are you able to take off from work and run home to meet a potential buyer?
5. Lack of Negotiating Skills
Real estate contracts are legally binding documents full of clauses, timelines, and contingencies that are unfamiliar to inexperienced layman. There is more involved than stating the sales price and closing date. You really want to understand what you are signing. The devil is in the details and having a professional, experienced in negotiating, by your side to explain the details can be invaluable.
6. Lack of Legal Knowledge
Twenty-five years ago a real estate contract was 3-5 pages. In 2021, a real estate contract can be 25-30 pages with disclosure requirements that make your head spin. If you are not familiar with lead based paint disclosures, nearby environmental disclosures, sex offender disclosures, property defect disclosures, disclosures if someone died in the house… just to name a few… you are opening yourself up to legal liabilities. You may be committing a prosecutable offence on top of having an irate buyer on your hands.
Bottom line: know the pitfalls before deciding to go it alone as a For Sale By Owner. You might be able to save commission dollars but, are the commission dollars saved being eaten up by a lower sales price, longer time on the market and lack of peace of mind?
Are you a Mason City homeowner thinking of selling your home without Realtor representation? Have you attempted to sell your Mason City home For Sale by Owner and failed? If so, we’d love the opportunity to talk with you about your real estate needs. Contact us, https://www.janefischer.com/ so we can decide whether there would be a mutual benefit of working together on the sale of your Mason City home.