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5 Reasons You Shouldn’t For Sale by Owner

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5 Reasons You Should Not For Sale By Owner | Keeping Current Matters

Some homeowners may consider trying to sell their home on without the assistance of a real estate professional, known in the industry as a For Sale by Owner (FSBO). We think there are several reasons this might not be a good idea for the vast majority of sellers.

Here are five of our reasons

1. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to FSBO.

  • The buyer who wants the best deal possible
  • The buyer’s agent who solely represents the best interest of the buyer
  • The buyer’s attorney (in some parts of the country)
  • The home inspection companies which work for the buyer and will almost always find some problems with the house
  • The appraiser if there is a question of value
  • Your bank in the case of a short sale

2. Exposure to Prospective Purchasers

Recent studies have shown that 92% of buyers search online for a home. That is in comparison to only 28% looking at print newspaper ads. Most real estate agents have an extensive internet strategy to promote the sale of your home. Do you?

3.  Actual Results also come from the Internet

Where do buyers find the home they actually purchased?

  • 43% on the internet
  • 9% from a yard sign
  • 1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

4. FSBOing has Become More and More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years. 

5. You Net More Money when Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real commission. The seller and buyer can’t both save the same commission.

Studies have shown that the typical house sold by the homeowner sells for $184,000 while the typical house sold by an agent sells for $230,000.   This doesn’t mean that an agent can get $46,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.


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About The KCM Crew

We at The KCM Crew believe every family should feel confident when buying & selling a home. KCM helps real estate professionals reach these families & enables the agent to simply & effectively explain a complex housing market. Take a 14-Day Free Trial of our monthly membership to see how we can help you!

11 Responses to “5 Reasons You Shouldn’t For Sale by Owner”

  1. Jason November 3, 2014 at 3:20 pm # Reply

    While I appreciate the content you all provide, I think with Zillow and other websites that are major search engines for homebuyers, allowing FSBO’s to list on their sites, a couple of your arguments may not be as valid. I agree that real estate professional can expose seller’s homes to more potential buyers though.

    • Betty November 11, 2014 at 8:45 pm # Reply

      professional real estate sites such as http://www.laffey.com, mlsli.com, realtor.com and all successful real estate companies expose and promote your properties for sale the best way!!!!!!
      I know as I have done it and I have seen it for the last 22 years! But the consumer and the client gets professional and acurate projection with our marketing. The educated consumer knows by now, as being informed by numerous official and municipal sites available for the properties info. Once you List with a realtor of your choice best odds you will get higher price in shorter time. For sale by owner c.o. Listed his home with a realtor :))
      E.g zillow.com gets the exposure and I pay to get th exposure too, but also conflicts info. The consumers come to us very confused and we-licensed realtors- have to answer all questions to clarify all conflicted info about the value of the house…etc…

    • simon63@gmail.com December 16, 2014 at 3:51 pm # Reply

      Jason, you hit a key point…Zillow and other similar web sites do allow the homeowner to get wider exposure than they were able to in the past. However, gaining exposure is just a small part of selling a home. A good REALTOR, such as myself, will arrange for & pay, from his pocket, for your professional pictures, will handle all calls, will arrange for showing the property, will place the advertising,will create aYouTube video, will complete the paperwork so all you need to do is sign, will advise the homeowner on the best negotiating strategy so you get top dollar. AND will call other REALTORS to search for a buyer amongst MANY more things. Selling a home is a full time job whilst it is on the market. You can use Zillow, but Zillow alone will not get the job done.

      • Jersus Medina December 26, 2014 at 12:13 pm # Reply

        Hi Simon, I am interesting on a bit of your comment. You say you will arrange to create a YouTube video. Can you tell me a little about it, maybe show some examples and cost? I’m about to sell my home and I’m doing some research, and considering the majority of homes have internet help, video seems like a very good tool. Please let me know when you have a little time. Regards

        • Christy December 29, 2014 at 4:09 pm # Reply

          Jersus,
          Yes, a realtor will handle the details of internet exposure, showings and paperwork but YOU the SELLER will still pay for all of this. The mortgage fees, attorney, etc. will all come out of your pocket. With the exception of the inspection, which is paid for by the buyer, you will end up paying for much of the process of selling your home. The inspection will work against you either way, anyway.

          Learn a little bit about how to record a video (not such a bit deal if you ask me), take some pictures, which is easy with high resolution cameras these days and give selling a try on your own.
          I’ve sold my own homes and had good luck with the process.

          • Deni February 6, 2015 at 2:35 pm #

            Christy,

            I am not sure in which state you are located but the seller “fees” you are referencing are not necessarily fees that are required to be paid by the seller. A good REALTOR (R) will be able to negotiate terms that are in the best interest of their client. In most cases, if any mortgage fees are paid by the seller there is only a specific amount that is allowed by law to be paid. Also, again everything is negotiable but for the most part, the person who is represented by the attorney pays the attorney’s fees. I am not sure where you’re getting your information but you might want to check up on some of the mortgage and real estate laws prior to advising someone. I am happy that you’ve had success with selling your own homes but that doesn’t necessarily mean that you completely know/understand all the things that an agent does or the full process. Even the owner of ForSaleByOwner.com had to end up enlisting a Realtor in order to sell his home. That really says something, doesn’t it?

    • Marie Smith December 26, 2015 at 4:32 pm # Reply

      We will use a site similar to Zillow to list a property on our own. Once we have a buyer or buyers, we refer them to our Real Estate Agent. He handles the details and we pay half the commission. It works great and something we do often.

  2. Gerald Vitale January 6, 2015 at 10:48 am # Reply

    #6 Should be SAFETY…… FSBO’s need to open their homes to any stranger who calls…. This might even be #1

  3. Michele Davis June 10, 2015 at 12:03 pm # Reply

    Whether the “KCM Crew” incudes a realtor or real estate attorney or not is a moot point since “the crew” is clearly serving as the real estate industry’s mouth piece.

    I winced at one realtor’s post about an owner nearly losing $20,000 in an FSBO sales transaction. We had the co-owner of a real estate agency who had won state awards, and was also heading the state realtors association during a 30 year+ career contracted to “property manage” our home and handle selling it for 7 years.

    Every renter violated the lease without repercussions during that 7 years. In fact one of the renters – who did the most damage to our home – sued us because our “property manager” ignored state property law in not refunding his damage deposit.

    The last renters this “realtor”/property manager” put in our home were there with a flawed, unenforceable “lease-to-purchase” agreement. These renters stopped paying rent for 4 months only leaving the home under threat of eviction.

    Although the litigation we brought against the renters was decided in our favor by the court, after 1 year we have yet to recoup the rental monies owed us.

    We could have lost our home to foreclosure thanks to the incompetence of this supposedly “seasoned professional”. We incurred relocation expenses and lost income to take possession of the home rather than losing it.

    Our well documented complaint filed with the state realtors association was dismissed on a technicality. So much for the equitable outcomes of a self-regulated industry.

    In addition, to date we have lost over $30,000 in the last year because of this “professionals” incompetence. Posts that point out the misinformation and “hype” presented in this article aren’t haters – some like my husband and I – are victims.

    We will be putting out house on the market FSBO. I’ve sold property like this years ago so would appreciate any advice by those who have done so. Thanks to the previous post that provided some tips.

  4. kurt October 6, 2015 at 4:12 pm # Reply

    I am selling to my rental tenants, would this be a special situation that FSBO is prudent?

    • Jake Posey December 2, 2015 at 10:29 am # Reply

      Kurt – Yes it would. If you use an agent at this point, you are just throwing money down the drain. Hire a real estate attorney for a couple hundred dollars and they will guide you through the process. The attorney will also make sure you are legally protected – something an agent cannot do.

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