FSBO - For Sale By Owner

September 28, 2006

I was approached by someone several weeks ago who asked me to consider listing their home for sale. We discussed the preliminary aspects of it and made an appointment to meet at the property. The meeting consisted of giving them ideas for preparing the home for sale and also to provide them with the most current comparable properties. This included the recently sold homes along with the ones that were currently available and would be considered competition for them.

In the current real estate market homes are staying on the market much longer. This is evident by the number of open houses found each weekend - even though open houses is not the way most properties are sold. Open house is designed for the real estate agent to make additional contacts.

Back to the point - this same person gave me a call a couple weeks later and asked me how I would feel if they were to try to sell the home on their own. Naturally, it was quite a disappointment after the time spent and work that had already done for them.  Yes, the majority of the work comes after this point, but that was time I never can retrieve. I only earn commissions from my brokerage by selling and completing a transaction, which means getting the Escrow closed. It is amazing to me, as a consciencious and knowledgeable real estate agent, that some people don’t realize how valuable it is to have a quality real estate agent on their side - whether buying or selling property. While all agents are different there are some committed to quality service and they believe their clients best interest comes first. There are reasons that the state requires agents to have a license.
A good real estate agent can make such a difference. People who want to sell their home on their own usually feel it is an easy process and they want to save brokerage commissions. However, when putting the pencil to the paper one would find out that a good agent is worth every bit of the commission. Most real estate transactions consist of a broker representing the seller and one representing the buyer.  It can benefit the buyer and the seller by having a third party for negotiations.
When someone lists their home For Sale By Owner (FSBO) most buyers will approach the seller with the attitude, ‘ok, they aren’t using an agent, I want to buy the home for 6% less’ (that is the amount of commission they figure would be split among the two brokerages). Therefore, the sellers reasons to FSBO have gone away and all the stress and liability is still on the seller. In my years of experience I’ve found that having a good agent to negotiate for you will usually bring more money to the table - often more money than the commissions paid to both the brokerages. This allowing the seller to net more money in their pocket. For the buyer it could help them save money on the price or to negotiate extras. There are many state laws and procedures the sellers need to know and follow when selling their property. As a real estate agent I have to constantly keep-up with the new laws, state requirements and procedures.

I mentioned this to the client - and he agreed.  After he thought about it he said he did sell a home himself several years ago and remembers how much work it was - but what he said really hit home was that two years after he sold that property the buyers filed suit against him because he didn’t follow all the requirements.  Incidentally, they won the case against him, he said.
Interestingly, when I’ve worked with some buyers there have been numerous ones who have specifically told me not to show them any properties where the owners are trying to sell on their own. Their reasons they’ve stated is that whether buying or selling it is a business transaction and they want only to have professionals involved in their business transaction.  One client said to me that if they needed heart surgery they wouldn’t try to do it themself.  They said they would find someone who knows how to perform that task - and they feel it’s the same with their financial life.

Something I learned many years ago is to do let people do what they do best - and for me to do what I know and do best.

Whether you have interest in buying or selling property, consider contacting us - you will be glad you did. 619. 297.7001

Posted in Real Estate