Our Opinion on Why Not To FSBO?

According to the National Association of REALTORS® (NAR) FSBOs accounted for 13% of home sales in 2010. The typical FSBO home sold for $153,000 compared to $211,000 for agent-assisted home sales. Even if the FSBO paid 6% commission ($12,660) to the selling and listing agent, the net to the homeowner would be $198,340 for agent assisted sale. FSBO may be well intented, but see below..

Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselfers are very experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five reasons why.

1. FSBOs can't list their home in the MLS.

FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including the gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS. More exposure can mean more eyes on the property. More eyes on the property can mean more offers, higher prices (as in multiple offers), better terms, and faster closings. You never know where a buyer will come from. We've had agents say their buyers found us on Craigslist, or Backpage and other real estate searchable websites. We've had buyers contact us directly through email notifications where our listing was placed.

2. Agents won't show FSBO homes.

In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

3. FSBOs usually overprice their home.

Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers. If you would like us to do a comparative market analysiis of you home or property please use the CMA form on our contact page.

4. Buyers will feel intimidated.

Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer.,

5. FSBOs are likely to stumble into legal trouble.

Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (e.g., California). A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes. If you take a look at one of our transaction file folders when a property is sold, the file is over an inch thick with forms, addendums, disclosures and such. Do have all this knowledge? What do you know about Chinese Drywall, or water heating strapping, or smoke detectors, or lead paint disclosures? You sure you want to go down this road without someone knowledgeable about the transaction?

If you have any questions about this offer please call us at 707-853-4864 or contact us here by filling out the form. Also take a look at our Seller's Marketing to get an idea of what marketing we can do to help you get more exposure.