Why For-Sale-By-Owners Fail

It seems like an obvious thing that a realtor should argue that (FSBOs) will fail, but there are facts as to why. The reason why someone would want to sell his/her own home is obvious: save on the commission. The understanding is pathetic: “I can do what a realtor does. Just put up a sign and the house will self itself.” If only it were so simple! Shame on us realtors for not telling our clients, buyers and sellers alike, all that we do and how many hours it takes! That’s for another article. But that fact is, less than 10% of FSBOs actually are able to sell their own home and they end up using a realtor. Why?

In a nutshell, sellers have an unrealistic view of their own property and do not correctly prepare it for sale. Kind of the forest for the trees type of view. “Just needs a little work” in one person’s view could easily be seen as a total dump in a prospective buyer’s view after seeing the many fully upgraded homes for sale competing with the FSBO’s house. Little or no marketing experience. As much as the sell-it-yourself owners would like to think that just by sticking a sign in the yard will sell the house, in most cases it takes a lot more than that. It takes marketing, and marketing know-how. Target marketing without violating the many protected types of people (age, gender, race, religion, etc.). Another big mistake is how so many sellers think their home is worth so much more than it is. They get angry at their realtor for telling them its worth, thinking that they want a quick sale. Everyone wants a quick sale. But the realtor knows the values of the competing homes and what the market will and will not support. The realtor does this for a living, day in and day out. How about negotiations? We’re talking a lot of money, which means high emotions, and now we need to talk about what the buyer wants, what the seller wants, repairs the buyer wants, repairs the seller refuses to make, people’s egos, bickering, blaming, and no voice in the middle to keep the calm and everyone walks away made and the deal falls apart.

There’s more, and Bill Gassett, of RE/MAX Executive Realty in Massachusetts, wrote an excellent article on this very subject for Inman. Click here.

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