Debbie Bachmann
FSBO Woes:

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 transactions
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.”
Debbie Bachmann
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