Listing Your Phoenix Home As A FSBO (For Sale By Owner)

Listing Your Home As A FSBO (For Sale By Owner)

Selling a home is more work than you might think, which is why four out of five homes sold annually in the U.S. are sold through a real estate agent. But there are valid reasons for trying what's known as "for sale by owner," or FSBO ("fizzbo").

Some homeowners are tempted to sell their home on their own instead of using a professional real estate agent. A portion of those owners are successful. But, many are not successful. The potential for savings is much more elusive than many anticipate. For example, when a buyer considers a home being sold directly by an owner they are going to discount any offer they make in recognition that there is no commission. Put yourself in the buyer’s shoes. Wouldn’t you? So, the dollar savings the seller may have initially anticipated is considerably less than expected.

If you do decide to sell your home on your own, be very careful in the selection of your asking price. FSBOs tend to attract investors and bargain hunters seeking a steal. Besides looking for a commission discount they're also looking for FSBOs that have priced their home below market value. I have personally witnessed FSBOs sell their homes for tens-of-thousand of dollars below market value and proudly tell me how they "successfully" sold their home without the aid of a professional real estate agent. As you can imagine, intoxicated by their apparent success, they dismissed anything I had to say – tragic.

Another factor that bites into potential savings is the cost of marketing a home. A seller may get lucky with just a “for sale” sign on their lawn. But, chances are they're going to need to spend some money to get marketing exposure, and this gets into the BIG hidden costs of marketing your home on your own. You’re much more likely to get multiple offers on a home when it’s professionally marketed. An Internet-savvy professional will market a home on a variety of consumer web sites (e.g. Realtor.com, Yahoo Real Estate). This kind of exposure casts a much wider net and greatly increases the odds of getting multiple offers. Multiple offers translate to a higher price, often above list price.

Studies by the National Association of Realtors have consistently demonstrated that FSBOs average a lower sales price than professionals. For example, the 2005 Profile of Home Buyers and Sellers indicated that FSBO sales sold for more than thirteen percent less than homes sold by a real estate agent. It’s pretty much the same story every year this topic is studied. How is this possible? One reason, as I previously indicated, is the power of professional marketing. Would you rather have one buyer, or two or three buyers making offers on your home? Furthermore, it’s not enough to find a buyer. After an offer is received and accepted there are many things that can go wrong and kill a deal. You need a good real estate agent to shepherd the sale all the way to closing.

Finally, in addition to diminished monetary savings, I haven’t even begun to discuss issues like the logistics of showing a home seven days a week, differentiating real buyers from lookers, security and safety concerns and the higher risk of liability when a homeowner sells on their own. Sometimes homeowners flying solo have an overly simplistic view of what’s required to successfully sell a home. There is a reason why real estate agents are required to be licensed by the state.

Is it impossible to sell your home on your own? No, it’s not impossible. However, the odds are definitely stacked against you. But, there’s a bigger issue here. When planning to sell your home the best approach is the one that yields the highest net price within your time frame. An overemphasis on avoiding or lowering the commission without understanding what methods get the most amount of money in a seller's pocket is an all too common mistake. Don’t make this mistake, before deciding to sell on your own do some research. You may conclude that like so many other services we utilize on a daily basis, hiring a professional may be your best and most profitable option.

Contact Re/Max Desert Showcase if you wish to discuss the how our services can help sell your home.