A lot of people ask me whether selling For Sale By Owner (or FSBO) is a good idea.
When you list FSBO, the people who come to your home wanting to negotiate a deal are generally unqualified. They’ll come to your door without an agent and without a pre-qualification letter. In fact, most FSBO buyers need owner financing.
Most people who want to sell their home simply can’t do owner financing, since they typically want to buy another home with what they earn from their listing.
As you might expect, these kinds of buyers aren’t bringing great offers to the table. People who know that you’re listing FSBO will be well aware of the fact that you aren’t being represented. Therefore, you can be sure they’re going to try to take advantage of this fact by giving you a lowball offer.
Recently, the National Association of Realtors did up the percentage of successful FSBO listings from 2% or 3% to 5% or 6% depending on the part of the country. Still, this leaves FSBO sellers with just a 6% chance at best to sell their homes on their own.
On top of that, those 6% of successful closings really aren’t that successful at all, since the final sale price is almost always far below the home’s true value.
People sometimes falsely assume that they’re saving money by not working with a Realtor, but the truth is that FSBO sellers ultimately walk away with much less money. You really need to be careful trying to list on your own.
Last year, my team and I encountered a FSBO seller who only wanted $525,000 for a property. We were of course able to find a client willing to give that amount, but the home actually appraised for $615,000.
The seller was ecstatic at closing, since they believed they had gotten a great deal. From the perspective of our team, though, we saw that they actually still left a lot of money on the table. This could’ve been prevented with the help of a qualified agent.
Don’t get caught without representation. The chances of success aren’t good, and people who are successful in listing FSBO still end up receiving 5%, 10%, or 15% less for their homes.
If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.