Why FSBO Listings Struggle or Fail!
Hello! RE/MAX READY EDDIE HERE! Today I am doing a recap on my latest video. I will be giving you the ins and outs of FSBO (For sale by owner) listings and why they struggle to be successful and why people list their home as FSBO. Most people list their home as for sale by owner for a few reasons. They have been done dirty by a real estate agent before, they cannot afford to pay commision to the agent or agents involved, or they simply believe they do not need an agent to sell their home. Today I'm going to go over what I've seen and debug the common myths, facts, and issues regarding FSBO listings. So first things first!
1. Not Properly Preparing the Home for Market
If a home isn’t appealing to buyers, the sellers are wasting everyone’s time. This doesn’t just mean making sure everything is tidy and clean. The condition of the house needs to be perfect. If paint is peeling and outdated it needs to be corrected. If carpets are dingy and stained, they need to be replaced and cleaned. If light bulbs are burnt out, faucets leaking, holes in the wall, etc. That stuff needs to be address. A good listing will always be staged with professional photography. Something most FSBO's won't do. There's so many things that need to be addressed before you list. Especially if your home is older and dated.
2. Rocky Inspection Results
A home inspection may bring light to some problems with the house that the owner doesn’t agree with or will not accept. Most buyers will want a home inspection. If they're getting a mortgage they most definitely will get a home inspection. Very often, they will shed light on some of the problems with the house. This can upset the owner and can lead to the deal falling through when the owner is unwilling to fix the problems at hand, and also the owner not knowing how to proceed. Real estate agents can be a great asset when it comes to all types of inspections. They have been through the inspection process many times and can offer their expertise and knowledge in negotiating a successful outcome in a situation like this. Getting through a home inspection is often about going back and forth, and coming to an agreement by both parties. That applies to most real estate transactions, not just FSBO listings.
3. Lack of Proper Marketing Experience
If the FSBO property listing isn’t put in front of the correct audience, it will never sell. The real estate agent will have the knowledge and experience to get this home viewed by the right people. The owner usually doesn't have the ability or the know how. There are also quite a few very powerful online real estate marketing companies that won’t let FSBO homes be listed and for good reasons. An agent in most cases will be able to market the property much better then the homeowner will ever be able to. Especially if the agent is up to date on current marketing trends, and has a great social media presence targeted at the right clientele. A lot of FSBO's don’t realize the power of the multiple listing service (MLS) and how essential this tool is when listing a home for sale.
4. Dealing With Potential Buyers
A big part of the real estate agent’s job is handling inquiries on the property. Many people who list as FSBO, aren’t ready or able to deal with queries correctly. You have to be able to stay on top of calls and emails, and be prepared to show the property when it is convenient for the potential buyers. It can become inconvenient or awkward for a buyer to deal with and you'll probably lose out on the sale.
5. Negotiating With Buyers & Closing the Deal
Pricing your home correctly can be difficult to get right if you don’t have the experience or the access to the tools to help to a proper competitive market analysis (CMA). The number one mistake FSBOs make is pricing their property incorrectly. A common issue I see with FSBO listings is the home is severely overpriced. Negotiations over this price can also be problematic if the owner has unreasonable expectations. Which happens quite frequently without an agent there to pull the seller back down from cloud 9. Contingencies, clauses, and dates may need to be changed so that the seller gets the situation they want.This can be extremely confusing for someone who has limited knowledge of the real estate process. It isn’t just about negotiating on the price though, the contract needs to be paid close attention to if the sale is going to close successfully.
In no way am I bashing FSBO listings. I am just trying to bring light to some of the issues that come up during FSBO listings and some of the struggles that these type of listings deal with. If you're thinking about going the FSBO route, think long and hard. Do your research and make sure you have a plan. Do not set unrealistic expectations for yourself and the outcome of the deal. If you're certain you do not want a listing agent to represent you, you can still get the marketing, the help with paperwork, and the property listed in the MLS. I have designed a great system for marketing FSBO listings, that helps you as the seller become more successful and confident. It also helps the buyer feel less awkward and more comfortable through the whole deal! If you're a buyer and are interested in a FSBO listing. All I can say to you is be very careful and please talk to a real estate agent. They will be able to represent you and make sure as best they can, that the deal goes smoothly.