Tuesday, October 13, 2020 / by Vanessa Saunders
By Vanessa Saunders, MBA, MIMC , Broker Owner, Global Property Systems Real Estate.
People realize it’s a hot real estate market and prices are sky-high at the moment. Some home owners feel they can stick a “For Sale By Owner” sign in the front yard, post a picture and description on Zillow’s listings pages, sit back and let the offers roll in. They’ll say, “We just want to see what we can get.”
What they’ll likely get is screwed.
Ask any agent who’s had a career of shepherding home sales from showing to closing and they’ll tell you of the pitfalls that await the unaware. Just what do sellers risk? Here’s the short list.
Getting the price wrong.
How in the world is a homeowner to know what his house is worth? He knows what he paid for it. He may know what some of his neighbors sold their homes for (“may” because not all his neighbors will admit the real price and costs involved.)
The homeowner lives in a bubble. He does not have access to current MLS records of recent closings or under-contract agreements.
What he often does have is an unrealistic expectation of what his beloved home, that he’s cared for and loved all these years, is worth. He isn’t plugged into the competing inventory as agents are, and he doesn't understand why his home isn’t selling when others around him are. So he sits with no buyers, and wastes precious time in a hot market while making mortgage payments on a house he no longer wants to live in.
Bad or ineffective marketing.
How in the world could a homeowner know how to market his home? If a yard sign and a Zillow listing are all you need, we Realtors would be out of a job. We’re not. Homeowners don’t know how to prepare a home for sale, how to stage it and photograph it with pictures that show well online. Most buyers are scanning the Internet for homes. A poorly marketed home that is hard to find and not well represented risks getting over-looked by thousands of buyers and agents.
Showing your home yourself.
How in the world can homeowners be able to show their homes when buyers need to see them? Sellers allow showings when it’s convenient for them, missing potential buyers who simply don’t come back. Plus, are they willing to let unqualified strangers into their homes, risking theft and their safety? The reason Realtors use lock boxes is they provide a solid record of every agent who’s visited the property. FSBOs risk losing potential buyers as well as their own security when they show their own home.
Owners negotiating badly.
How in the world is a homeowner expected to be able to talk money to buyers. Most don’t know the right questions to ask, nor do they know how to answer buyers' questions or objections in a way that would clear up potential problems, and open the gates toward a sale.
Very likely they are competing alone against a buyer’s agent, who is trained and experienced, with the ability to move through negotiations successfully. FSBOs risk leaving money on the table, or not negotiating for terms they could have received.
Agents bringing buyers.
FSBOs say to buyer's agents, “Bring me buyers and I’ll be happy to pay you your half.” They expect Realtors to bring their qualified buyers into a situation where they have to do all the work for half the money. Sellers don’t understand that an agent representing a buyer doesn’t represent them (despite any disclosures provided) and continually rely on the agent for direction and advice. The seller is at risk because agents know these kinds of sellers don’t have the experience to grasp the process and can take advantage of them.
Selling your home on your own may save you money, if you’re lucky. But just as often, it can cost homeowners more in the long run. If you are thinking of putting property on the market as a For Sale By Owner, contact a Global Property Systems local area specialist before you do. You'll find the commission you pay is well worth the risks.