Common Reasons FSBO Sales Fail

For-Sale-by-Owner, or FSBO, transactions are commonly seen in seller's markets.  It is also a common practice whenever homeowners want to maximize their profits by not having to pay commission on a real estate agent. However, as common as the practice is, there are several common reasons FSBO sales fail. It has been proven that selling your home with a real estate agent will actually earn you a higher profit.  High enough to actually cover the commission entirely, AND put more money in your pocket.  Who doesn't want that?!Choosing to sell your home on your own means you'll be the one negotiating and relying on your own skills to finalize a contract.  This can potentially leave you open for legal problems down the road, and a smaller profit at the end of it all.According to the National Association of Realtor®'s 2016 Profile of Home Buyers and Sellers, the average FSBO sales price was $185,000, while the average price for a home represented by an agent was $245,000. That's a difference of $60,000!If you're still not sure if you're ready to hire a real estate agent, keep reading to find out some common reasons FSBO sales fail, and click this link to read the full article. 

1. Marketing your home online isn't as easy as you think

Buyers always start online, and FSBO sellers are unlikely to get the exposure they need on a number of listings websites to reach their audience, says Realtor® Wendy Hooper with Coast Realty Services in Newport Beach, CA. Sticking a sign in your yard or trying to pull off some DIY social media marketing hardly has the same effect.How an agent can help: Using an agent automatically offers widespread exposure for your listing through the multiple listing service. Your real estate agent will also have the means to promote your house to fellow agents to share with their clients. FSBO sellers would have to shell out big bucks for advertising and still might not reach the most important audience.

2. You could price your home wrong

Those who put their homes on the market as FSBO tend to set a price based on an online assessment tool or the lofty sum that the neighbor down the street claims they were offered.  Two methods that are liable to put the listing price way off."Using a free online valuation tool is like bringing your doctor a printout of your Google search about symptoms and possible cures,” says Jon Sterling, a real estate consultant with Keller Williams Realty in San Francisco. “There’s no substitute for actual market knowledge.”The danger in overpricing a home is that it will languish on the market, and buyers will wonder why, even if you lower the price later, says Mark Ferguson, a real estate agent with Pro Realty in Greeley, CO."The home becomes stigmatized, and buyers are likely to pay a lower price when the home has been on the market an extended period of time,” Ferguson says.How an agent can help: A real estate agent will provide an accurate home value based on a comprehensive market analysis to help you arrive at the right listing price. The goal is to make sure you’re pricing your home in the sweet spot. Not too high so that you are turning off potential buyers, and not too low so you are leaving money on the table.