The Home 
1
comments

Pitfalls of Selling via “For Sale By Owner”

Email  Print Print  

I’ve never sold a house so I don’t entirely understand their side of the process (so take this article with a grain of salt), but I do know what I looked for as a buyer. I do know that not a lot (percentage-wise) of buyers go online and search for homes on the For Sale By Owner websites so as a seller your potential market is already smaller. I also know that a buyer agent, which most buyers will have, has little or no incentive to show their clients an FSBO… that’s another factor decreasing your potential market. Finally, even if you do find a buyer, they will have to bring “buyer agent-like expertise” to the closing table (if they even make it that far) which is something a total novice probably won’t be able to do, let alone feel comfortable doing. But ignoring the final point expertise point, which was the main thrust of the previous article, you’re still betting that an educated buyer (or buyers preferably) in search of a FSBO will find your house and put in a competitive offer. I think that is a dangerous bet to be making.



When I bought a home, I did it with the future sale of the home in mind. Even though I don’t have any children, you want to buy into an area with good schools because when it comes time to sell the fact you’re in a good school district makes your home more attractive to more buyers. Why do you want more bedrooms and bathrooms? Bigger families with bigger incomes want bigger homes! If you buy a $300,000 rowhouse in an area where you only expect young professionals to live, even if the paper value of your home rises to $500,000… how will a single young professional be able to afford to buy the home from you? He/she won’t, but a dual income family of four will be able to afford that.

So, when you choose FSBO you are reducing all your preparation when you first bought the house. Your only benefit is in not paying a large commission. When you consider that commissions are so high (you don’t even need to add the other little fees to make this point hit home) on property sales (7% standard, so $35,000 on a $500,000 sale), perhaps it’s a worthy tradeoff.

The secondary pitfall behind chopping your market to a fraction of what it normally would’ve been is that you force yourself into dealing with a savvier customer or a total dope. One on hand, the savvy buyer will be on top of his or her stuff and can get you to closing without a hitch. You won’t be able to make as much money as from a total dope. The risk with a total dope is that a mistake in the contract, in the research, in something; could hold off the closing sale – which may have negative downstream effects. You’d prefer a total dope with expert representation.

Lastly, a smaller pitfall that probably wouldn’t concern most FSBO sellers, is that you need to be on top of your game. One of those savvy buyers could pull one over on you if you’re not careful!

{ 1 comments, please add your thoughts now! }

Related Posts


RSS Subscribe Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.

One Response to “Pitfalls of Selling via “For Sale By Owner””

  1. Illusion-of-the-Mind says:

    Jim,

    I’ve never bought a FSBO, but I’ve sold two FSBO’s. It was a eye-opening experience to say the least.
    My motive was to save the commission (the two properties had very little margin so a FSBO was my only option).

    Having said that, I (probably) will not ever do a FSBO again. I had numerous showings, people backing out of the contract, no-shows, ect. My time is worth more to me now than the commission my Agent wil make.

    I found a great agent that kicked butt on my 3rd and 4th property and will use her whenever I sell. She was very experienced and didn’t sit back and wait for-it-to-happen….she made-it-happen.

    Yes, there’s nothing like the MLS system for listing properties. BUT whn the market gets as hot as it has been it didn’t matter where you advertised a home for sale. Agents were calling asking if you would co-op (I said of course, I’ll give you 3% if you find me a buyer).


Please Leave a Reply
Bargaineering Comment Policy


Previous Article: «
Next Article: »
Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.