“For Sale By Owner” are not the favorite words of the real estate agent. Yet, to save the commission that they would have to pay an agent, some sellers choose to go “FSBO”, as it’s called. There are two ways to do a FSBO. One, is for the owner to do everything on their own. The other, smarter way is for the owner to pay to have the property listed on the MLS and to be willing to compensate the agent who brings a buyer – a half-FSBO, if you will. Both present some real challenges but, if done well, may indeed save the seller some dough.
I could list many mistakes I’ve seen sellers make when trying to sell on their own. For example, the other day, I called a half-FBSO seller to make an afternoon appointment to show her condo to my buyer. She asked if we could come after 6:30 at night because she works during the day and wouldn’t be home to let us in. My buyer was meeting me at 1pm in the middle of the week to look at a number of properties. She was not going to make a special trip to see this one FSBO unit at night when she could see all the others during the day. Right there – the seller has missed an opportunity because of a lack of access to the property. As I often tell my sellers – if the buyer can’t see the property they aren’t going to buy it. That’s just one small example. There are many others. I am the first to admit many of the mistakes on this list are made by real estate agents as well as FSBO sellers. That is a whole ‘nother article. Of course I realize that not every item on this list applies to every seller but many do. FSBO sellers:
- don’t know how to stage a home
- don’t know how to price a home
- don’t know how to justify the price they pick based on the comps
- don’t know how best to describe a property to make it most appealing & differentiate it
- don’t know how to take good photos of the property
- didn’t even think of taking a video of the property
- don’t know how to speak about the property objectively, they are emotionally attached to their property
- don’t have any idea how to market their property on-line
- make buyers uncomfortable when they are at the property as the buyer views it
- are much more difficult for the agents to deal with when making appointments for buyers
- are not often professional, experienced negotiators
- don’t have much experience with home inspection or appraisal issues
- don’t know what to do when the deal starts to fall apart
There are lots of reasons why about 70% of properties that start out as FSBOs end up being listed with an agent when they don’t sell. I’ve read statistics that claim that properties sold with the representation of an agent fetch a higher price than those sold by the owner. The differential might actually pay for the commission, and then some.
In today’s environment, there are a real number of sellers who bought at the height of the market and even if they were to do absolutely everything 100% right, no matter what, they are going to sell at a loss. Sometimes it’s a big loss. It is very understandable that they are going to try to minimize the loss and they often feel that saving the commission is a viable way to do that. I’ve been involved with some of those sellers personally. They have spoken with me about listing their property but decided for economic reasons they had to give it a try on their own. When that is the case and the seller discusses it with me honestly and openly I can completely understand and empathize with their predicament. In fact, I will do what I can to try to help them avoid some of the pitfalls I listed above. That is the key, potential sellers – be honest.
If you think you can pick my brain and then try to sell your home on your own without me knowing, that shows how little you know about the Hoboken real estate market. Hoboken is a small town in many ways. If you are straight with me, or any other reputable, successful agent, they are going to respect you for it and be more than willing to help you. Chances are, you may end up listing with them eventually so you shouldn’t be burning bridges, you should be building them. (Calatrava’s pedestrian bridge in Bilbao is one of my favorites).