Is For Sale By Owner a good idea?


Is For Sale by Owner a good Idea?

The seller go for the ‘For Sale By Owner’ cocept to save on Realtor Commission. There has been always a curiousity amongst seller to find out if there is a way to avoid Real Estate agents commission. Hence they turn to fsbo websites and their network to sell the property.

However, it is worth it to consider to pros and the cons in doing so.

First and foremost is the consideration where your property is located. If the location is very hot and the houses are moving fast, then your job may be easier. Also the amenities and the facilities around the property that are available will decide how fast your home sells if it is For Sale By Owner.

Why is that some people choose to try to sell their home on their own?
We assume the homeowner just wants to save on paying the real estate agent’s commission which is often in the 5% range and on a $400,000 home, that represents about $20k in savings. That seems reasonable if they really can do a good job of selling and close the sale at the price they want. If the property is in really high demand and in a highly visible location, they may indeed get a good bid on the property.

You have to wonder how most FSBO sellers can get the exposure for the home they need though. There are lots of tire kickers and window shoppers these days, but closing a sale is a different matter. Without the MLS listing service, exposure on the property might be minimal. Having said that now you do have the option of posting on MLS yourself (for a fee). Most real estate transactions begin with many brokers making their clients aware of the property, and house hunters can look up mls listings online. That’s a lot of exposure to forego when you are a For Sale By Owner.
Realtors closing the sale. Realtors have more experience and skill in presenting, negotiating and closing real estate deals. A homeowner usually doesn’t. There are hidden pitfalls homeowners aren’t aware of. One of them is post sales legal issues, which is a definite problem. When a home is listed FSBO, there’s no doubt many prospective buyers might be predatory. They’re looking to get the property at a real deal price and will work the homeowner until they give up in frustration. They work the contract so that they can come back after the owner for things that may be wrong.

For Sale By Owner (FSBO) Statistics

FSBOs accounted for 9% of home sales in 2012. The typical FSBO home sold for $174,900 compared to $215,000 for agent-assisted home sales.
FSBO Methods Used to Market Home:

  • • Yard sign with FSBO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48%
  • • Listing on Internet with FSBO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32%Friends, relatives, or neighbors . . . . . . . . . . . . . . . . . . . . . . . .  30%
  • For-sale-by-owner websites . . . . . . . . . . . . . . . . . . . . . . . . . . 20%
    • Other websites with real estate listings (e.g. Yahoo, Google, etc.) . . . 11%
    • Social networking websites (e.g. Facebook, Twitter, etc.) . .  10%
    • FSBO Video hosting websites (e.g. YouTube, etc.) . . . . . . . . . . . . .     2%
  • Print newspaper advertisement . . . . . . . . . . . . . . . . . . . . . . .   14%
  • Open house . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12%
  • Direct mail (flyers, postcards, etc.) . . . . . . . . . . . . . . . . . . . . . .  2%
  • Video . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1%
  • For-sale-by-owner magazine . . . . . . . . . . . . . . . . . . . . . . . . . . .  1%
  • Television . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  <1%
  • None – Did not actively market home. . . . . . . . . . . . . . . . . . . . 31%
  • Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2%

Most Difficult Tasks for FSBO Sellers:

  • Understanding and performing paperwork  . . . . . . . . .  18%
  • Getting the right price . . . . . . . . . . . . . . . . . . . . . . . . . . .  14%
  • Preparing/fixing up home for sale: . . . . . . . . . . . . . . . . .  11%
  • Helping buyer obtain financing: . . . . . . . . . . . . . . . . . . . .  6%
  • Attracting potential buyers . . . . . . . . . . . . . . . . . . . . . . . .  6%
  • Selling within the planned length of time: . . . . . . . . . . . .  6%
  • Having enough time to devote to all aspects of the sale . 1%

Source: 2012 National Association of REALTORS® Profile of Home Buyers and Sellers

They list their properties on for sale by owner websites such as forsalebyowner.com, homesbyowner.com, fsbo.com, byowner.com, or propertysold.ca. These sites and services can provide exposure but it might be that it’s exposure to the wrong people. Most buyers don’t care if the homeowner has to pay the commission. Buyer’s know that it’s a whole easier working with an agent and having their experience on their side.
There’s been studies that suggest both agent assisted and FSBO sellers come out better using either.
If you’re going to sell your home FSBO, it might be wise to sell as is. Of course the legal papers will have to be air tight to stop the buyer from launching law suits to have you fix whatever he didn’t know about. Ask your real estate lawyer how to sell your home fsbo. Make sure your lawyer has explained each aspect of the sales process and the sales contract itself. Purchase a good quality sign for your yard as a low quality sign sends the wrong message to potential buyers.
Make sure you check out the buyer thoroughly. Get a credit check done and ensure they have a preapproved mortgage. Have them pay for and do their own home inspection and never agree to post sales conditions.
If you’re an agent, do you have a unique value proposition that clearly explains the value of your services and why FSBO is not a good option for homeowners? For many agents, the issue of FSBO is troublesome, since they can’t explain why and how using a realtor is better. Just one of the many issues involved in real estate marketing. Look to Realty Market Leader for a complete marketing solution.

If you do need any help deciding if For Sale By Owner is a good idea for you give us a call and our team will guide you and give you different options to do so.

We also offer solutions to people who are not in a position to afford the house and have to due to financial pressures and hence are considering fsbo. We totally understand the dilemma that you may face when selling your home. with fsbo, You may alternatively also offer your home as a Rent To Own, in which you still keep the house and rent it to a tenant-buyer who rents it from you for 1- 3 years and then purchases at a pre-determined price. Give us a call and we can explain you the process.

There are so many options in Real Estate and our experienced team will guide you in the right direction.

www.GtaRentToOwn.com

Tags: ,