FSBO Woes: Why It's So Hard to Sell Your Own Home
“Copyright 2008 Marcie Geffner. All rights reserved.
Used by permission of copyright owner.”

For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards.

By Marcie Geffner

Granted, some people are able to sell their own homes without the
services of a real estate agent. Some of these successful do-it-
yourselfers are very experienced home sellers. Others are transferring
ownership of their home to a child, a coworker or a tenant who's
already living in the home. These circumstances are the exception, not
the norm, however. For most people, a for-sale-by-owner (FSBO)
transaction simply isn't in the cards.  Here are five reasons why!!

1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put
their home in the multiple listing service (MLS) because these industry
membership organizations are open only to licensed real estate brokers
and agents. FSBOs are also locked out of many home search engines
and Web sites, including the gigantic Realtor.com. Sure, a determined
FSBO can put a for-sale sign in his or her front yard and run a tiny
advertisement in the local newspaper, but the home won't receive
nearly as much exposure as it would through the MLS.

2. Agents won't show FSBO homes. In a typical home sale, the buyer's
agent receives a percentage of the commission that the seller pays the
listing agent. Without a listing agreement, there's no guarantee that the
buyer's agent will be compensated for his or her services, unless the
buyer has signed a buyer's brokerage agreement that specifically
provides for such compensation. Even if a FSBO offers to pay the
buyer's side of the commission, most agents won't want to go through
a transaction with an unsophisticated self-represented seller across the
table. That means the pool of potential buyers for FSBO homes is
limited primarily to unrepresented and probably unqualified prospects.

3. FSBOs usually overprice their home. Like most homeowners, most
FSBOs honestly believe their own home is worth more than comparable
homes in the same neighborhood. Usually, they're wrong. A real estate
agent can provide an update on market conditions, an assessment of
the likely selling price of the home and tips for improving the home's
buyer appeal. Overpricing a for-sale home is a sure way to deter
potential buyers.

4. Buyers will feel intimidated. Potential buyers will spend less time in a
for-sale home if the owner is present during the showing, and they'll be
shy about discussing its pluses and minuses with their own agent if the
owner is within earshot. Buyers will also be less inclined to make an
offer if they know they'll be negotiating directly with the seller. Having
an agent on each side creates an effective emotional buffer between
the seller and buyer.

5. FSBOs are likely to stumble into legal trouble. Real estate trnsactions
are fraught with potential liability for unwary sellers, particularly in
states that have extensive disclosure requirements (e.g., California). A
FSBO who overlooks even one required form or legally mandated
disclosure could face a protracted and expensive buyer lawsuit after
the transaction closes.

“Copyright 2008 Marcie Geffner. All rights reserved.
Used by permission of copyright owner.”
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