Mastering FSBOs – Chapter 1

Mastering FSBOs – Chapter 1 2018-04-11T17:37:04+00:00

Why People Sell FSBO and Why They Fail

FSBO implies that the owner must know how to professionally market, show the property, negotiate a selling price for the house, and (of course) manage to get all the necessary paperwork completed for the eventual home sale.

That last aspect usually includes finding an attorney to draft the necessary sale contract, as well as a title company to support and help complete the deal. All these issues can turn out to be pretty challenging for someone who’s not entirely prepared to take on this difficult task.

It is also important to do extensive market research on the matter before you market yourself to them. 

Save Money

That comes first and foremost because a real estate agent usually charges about 4% to 6% of the selling value as commission. The first thing you need to do is lay out your plan to convince them you are worth that money.

The National Association of Realtors and have reported on their sites that most FSBO homes are overpriced. That is true and is usually a natural effect of people knowing the actual cost of their property and the value of their hard built equity, all combined with a desire to draw some profit out of the sale.

Overpriced properties are far less likely to be sold and far more probable to scare off potential buyers.

It is a known fact that a lot of owners who lack professional presentation skills and developed negotiation skills end up selling their houses at far lower prices than their home is worth. Per statistics, a professional real estate agent manages to sell homes at an average price that ranges about $40,000 more than the prices that private homeowners settle for. 

Working at their own pace, giving the house a personal touch, and making all the decisions.

Some of the other aspects that frequently encourage homeowners to go the FSBO route is the privacy, knowledge, and decision-making aspects of a sale.

It is clear the owner knows their house best, making it easy for them to focus on the good aspects of the house and stay away from the bad. But demonstrating that you are a partner working together, will ease this fear.

The seller must not only be able to present the house in an appealing, professional way but also help the buyer imagine himself living there.

All while negotiating the best price. This is where your expertise has to show.

The Unexpected Cons of FSBO

90% of American home sales are currently brokered by professional real estate agents. Numbers don’t lie. 

Selling the property as FSBO takes longer than usual and requires extensive time and effort from the owner.

FSBO is not an easy task. It requires specialized knowledge, hard work, time, skill, and dedication to make it happen.

Cleaning and preparing the house for showing can be a challenge in itself without professional help and counseling. They need an authority who does this for a living.

A home that is not cleaned and prepared for selling will probably give the buyer the idea that the owner must have slacked in maintenance matters and thus leads to a decrease in the final sale price.

It is also a common fact that houses take considerably longer to sell through FSBO.

So, at the end of the day, when choosing between FSBO and a real estate agent, they have to wonder how much effort they are ready to invest in this aspect and how much their time is worth.

FSBO listings now enjoy far better online support than it did a few years ago. Several networks help FSBO properties and their owners.

These networks offer national listing services and marketing tools, all at low or flat rate prices. However, they are still hard to compare to the large pool that real estate agents tap into.

All these aspects cause the house to take a longer average time to sell and thus cause further inconvenience to the owner.

FSBOs are usually overpriced at first, but end up selling below market value.

Very few of the owners who opt for FSBO have extensive knowledge of the housing market. That and the emotional factor, causes owners to overprice their homes.

Overpricing usually scares off potential buyers, leaving the house on the market for a longer period (which can be a real disadvantage to those who want a fast sale or need the money). Your market and property analysis makes the difference here.

Some buyers don’t trust FSBOs and prefer to work with a real estate agent.

There is also the matter of trust involved. Buyers usually prefer to work with real estate agents.

The professionalism and experience of a high-performance agent inspires confidence in buyers.

It clearly puts FSBO at a disadvantage, no matter how you look at it. 

The FSBO represents a huge responsibility for the owner, as it puts all decisions on his or her shoulders. Building trust is one of the most important things you will do. You do this by firmly establishing yourself as an expert.

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Chapter 2