Since the invention of REALTOR’s®, there has been a very public debate on whether you should sell your home, For Sale By Owner, or with the help of a Realtor. There are many sides and arguments that one can make. But, there never seems to be an advocate from the Buyers side. Here are some interesting points of FSBO’s from the buyer’s eyes.
1. Buyers Start with a REALTOR®
Most buyers, especially first time buyers, begin their search online. In fact, it is now said that 94% of Buyers first turn to the Internet to search for their new home. In 2012, the top 5 websites buyers searched used an MLS® based System. These systems showcase the properties listed in MLS & receive live updates from MLS. Plus, it’s free for a buyer to work with a REALTOR®.
What does this mean for those home owners trying to sell their home privately? As these buyers search for a home with their REALTOR®, they begin by viewing homes listed on MLS® System. If the buyer is unable to find a home they like, they widen their search to other markets including FSBO homes. As a FSBO seller, your home it’s viewed last, if at all. Not only are you competing with all the homes currently listed on MLS, but also all the new listings that come out before the buyer makes it down the list to your home.
2. They know the Money game!
A buyer knows that if you have your home listed yourself that you aren’t paying a sales commission. They believe that if your home is listed at the same price as the home with an agent, that your home is overpriced. They know that the amount that the MLS® seller will pocket will be sales price minus commissions & with FSBO’s it will just be the sales price. As a FSBO, beware of this & expect lower offers.
3. They may not be serious, pre-qualified buyers!
- Prospective buyers may not be Pre-Approved by a bank or have a realistic budget
- Prospective buyers usually think they make an offer 7% – 10% less than the listed price
- Think they don’t have to follow the deadlines and conditions set by a REALTOR®
- May Place Unrealistic Conditions on the home
- Don’t have their own home listed yet but make it a condition of the sale of your house.
Often, buyers that shop “FSBO” view this transaction is more casual than with an agent. There isn’t an agent to answer to, & there are fewer rules than an MLS® listed home. Some buyers ignore deadlines, thus tying up your home with conditions they don’t take seriously. Having a REALTOR® on both sides helps keep the transaction on track, educates the buyer and allows you to trust that everything is being done properly.
4. No Trust
Why are they selling outside the system? Is there a reason they didn’t use an agent? Do they have to follow the same laws as an Agent? Do they have to disclose hidden defects? Are they up-to-date on their bills? Is their home in short sale? Do they have clean title? Sometimes, sellers are hiding defects with poor renovations or inflating facts of the home such as square footage and more. With viewing property with an agent, they can answer questions; get answers about cost of replacement & insight into market comparable. Also, when a buyer views a home listed through MLS, a buyer knows that a REALTOR® has been through the home taking proper measurements, properly identifying the owners & is required to disclose known defects of the home.
So after considering these points of view, is selling privately the best way to reach a buyer for your home? Are you really saving as much as you thought you were?
This may explain why it’s believed that at least 80% of FSBO homes are sold with a REALTOR®, and eventually listed on the MLS® System or an agent represents the buyer in the transaction. Why would you not use a REALTOR®? Buyers do.