Data from a National Association of Realtors survey shows that less than 10 percent of FSBOs actually sell. There are a lot of reasons why FSBO's fail and do not sell. Some of the top are:
1. Many people to negotiate with
Those deciding to take the FSBO route are not aware of how just how many people they will have to work and negotiate with, as in:
- The buyer, seeking the best possible deal.
- The buyer’s agent, who represents the buyer’s best interest.
- Home inspection companies, working for the buyer, which are likely to find some problem or the other with the house.
- Your bank, if it's a short sale.
- The appraiser, if the home’s value needs to be assessed.
2. Most FSBOs do NOT know how to Prepare the Home For Sale
Pre-listing tasks that FSBO's Must do before they list their home for sale - such as:
- De-cluttering - All Rooms - To Include the Kitchen and Garage
- Painting the rooms with a fresh coat of paint in a neutral color.
- Getting necessary repairs done.
- Having the home floors and carpets cleaned by professionals.
- Ensuring curb appeal of the home - Front and Back Yard areas.
- Replacing outdated light fixtures.
3. FSBOs do NOT know how to screen potential buyers
FSBOs often have no idea about the difference between pre-qualification and pre-approval, and they don’t know that buyers should ideally be pre-approved or at least pre-qualified.
Without doing one of the above the seller is wasting their time and money.
4. FSBOs fail to solve Buyer’s questions
Handling questions from buyers on their listings and coordinating showings for their homes are very important for making a sale.Unfortunately many homeowners aren’t either able to handle such inquiries on their homes or don’t have the time for them.
More important is organizing time for showings that might become an issue. In this day and age potential buyers and their agents want quick responses to inquiries, and don’t think twice about moving on to the next potential property if they can't get the correct response.
5. Owners don’t understand the concept of ‘Critical Time’
According to this concept, homeowners get the most money for their homes in the first 2 weeks of listing the property on the market. The longer FSBO homes stay on the market, the less money people will be willing to offer for them.
If a seller tries FSBO before hiring an agent, the seller loses the “golden time” window. This will eliminate buyers who have already viewed the home and might have made a reasonable offer — but have already moved on. The home will become stale on the market.
6. Owners Fail to understand the contract procedures
The contract to buy a home involves much more than just the price offered by the buyer. Real estate contracts have many timelines and clauses and involve several common contract contingencies, such as inspections and mortgages.
Most FSBOs don’t have a firm understanding of such contracts and might not know what they are agreeing to, or how to negotiate particular parts of the contract.
7. FSBOs will Not know how to handle the Home Inspection Findings
Home inspections almost always find some issues with houses even when they are relatively newer structures. In such cases, the buyer will request the problems be fixed or corrected before moving forward with the transaction.
Many FSBO's believe that there is nothing wrong with their home, so why spend the money? As a result, the potential buyer has an inspection and finds problems and the offer falls through.
8. FSBOs incorrectly price their homes
FSBOs often price their homes incorrectly due to lack of experience. They set the price too high, which potentially hinders the chances of closing the deal.
9. FSBO homes lack exposure
Homes for sale by owners are often listed on a few websites, but there are many that don’t allow FSBOs to list their property. Thus, FSBOs are unable to give their homes adequate exposure in the market.
However, when sellers hire a real estate agent, the professional can give a property comprehensive online exposure as well as exposure in the local real estate segment of the newspaper. The agent even has tools to extend the exposure further, which FSBOs don’t have.
10. FSBOs fail in the closing process
Even after an offer is accepted, many things still need to be done prior to the closing. For instance:
- Get the inspections completed within the allotted time.
- Ensure the attorney(s) (where applicable) approve contracts.
- Ensure that instrument survey is ordered.
- Check if the buyer has obtained written mortgage commitment.
- Find out if title work is reviewed.
- AND - Much more!
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PIERVIEW PROPERTIES Real Estate in Oceanside, CA.
Serving The Oceanside Communities Since 1979
302 N.Cleveland St.
Oceanside, CA. 92054