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>FSBO Woes: Why It's So Hard to Sell Your Own Home
FSBO Woes: Why It's So Hard to Sell Your Own Home
For most people, a for-sale-by-owner (FSBO) transaction
simply isn't in the cards.
By Marcie Geffner
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.
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.
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.
Copyright © 2000 Marcie Geffner. All rights reserved.
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