For Sale By Owners
Selling the home by oneself might looks like a money saving idea but there is a lot on the back end that needs to be looked at.
Agents can save sellers time, money, liability and hassle
11 reasons for sale by owner is a terrible idea
1. Scams happen
In today's era where scammers are using newer ways everyday to scam FSBO as they lack professional representation and knowhow. FSBO scams happen to both buyers and sellers with little recourse besides hiring an attorney.
Common scams include fraudulent papers (appraisals, loan documentation), foreign buyer deposits (scammer sends too much in a bad check and then requests a refund), purchases through a third-party (a fake attorney, etc.) and asking for personal information.
2. Liability is all on the seller
Everyone makes mistakes. A seller (or buyer) who doesn’t have the representation of a licensed agent pays for those mistakes.
3. Paperwork is daunting
Understanding paperwork is one of the most difficult tasks for FSBOs.
Depending on the one's situation, there are a variety of legal forms that are needed, including but not limited to a sales contract, property disclosures, occupancy agreements, Dower rights if applicable and many more.
Sure, ready-made contracts can be downloaded easily enough. But does an untrained seller understand what all that means? Would the seller know how to customize that one-size-fits-all contract?
4. Sellers can get stuck in a bad deal
FSBOs who sign on the dotted line and then realize an error are stuck. They have to pay the buyer (if they’re willing) to get out of or just take the deal.
5. FSBOs sell for less
Homeowners selling by themselves simply don’t have the time to devote to the process, don’t know the market value, don’t understand market reports and don’t properly market the property.
6. FSBOs spend more time on the market
Unless the seller knows someone who wants to buy the home, FSBOs take longer to sell than homes listed with an agent. For the same reasons, they can’t get the right selling price.
No one is “behind the curtain” running the marketing show.
7. FSBOs lack representation
There’s no one looking out for the homeowners who sell on their own. They have no one to call if they have a problem or a question.
8. Inspections are problematic
When the Buyer is getting the inspections done, their goal is to make sure the house is built right and find out if there is any work done that is not compliant to the codes of municipality.
9. Marketing is limited
FSBOs have limited resources to market their home.
Past records shows that most sellers rely on a yard sign, friends and family, and few use social media. Relying on the neighbors and Uncle Bob’s second cousin has its limitations. Even paying for the MLS listing won’t be enough because there’s no incentive for an agent to bring a buyer to a FSBO.
10. Hidden costs add up
The mindset for most FSBOs is saving money. Chances are, these sellers are being nickeled and dimed into a pretty big chunk of change.
11. Time costs the seller money
The biggest cost to a homeowner is their time. You might hear the argument that it doesn’t take an agent that much time to sell a house. And honestly, given the technology at our disposal, that’s true — to an extent.
But it will take a homeowner a whole lot longer. They don’t have the expertise or the access to the resources agents have. What is their own time worth to them? How much time will the seller spend researching the market and contracts? Is the seller going to leave work to unlock the house each time there’s a showing?
If you would like my assistance in saving you time, money and headache, please fill out the form below or call me directly at 1 (587) 991-3146.