For Sale By Owner's (FSBOs)

For Sale By Owner's (FSBOs)

FSBO Woes: Why It's So Hard to Sell Your Own Home ?

For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Granted, some
people are able to sell their own homes without the services of a real estate agent. Some of these
successful do-it-yourselfers are very experienced home sellers. Others are transferring
ownership of their home to a child, a coworker or a tenant who's already living in the home. These
circumstances are the exception, not the norm, however.

For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five
reasons why.

FSBOs can't list their home in the MLS.

		FSBOs aren't permitted to put their home in the multiple listing service (MLS) because
		these industry membership organizations are open only to licensed real estate brokers and agents.

		FSBOs are also locked out of many home search engines and Web sites, including the
		gigantic Realtor.com.

		FSBOs can put a for-sale sign in his or her front yard and run a tiny advertisement in the
		local newspaper, but the home won't receive nearly as much exposure as it would through the MLS.

REALTORS won't show FSBO homes.

In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will
be compensated for his or her services, unless the buyer has signed a buyer's brokerage
agreement that specifically provides for such compensation. Even if a FSBO offers to pay the
buyer's side of the commission, most agents won't want to go through a transaction with an
unsophisticated self-represented seller across the table. That means the pool of potential buyers
for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

FSBOs Usually overprice their home.

Like most homeowners, most FSBOs honestly believe their own home is worth more than
comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can
provide an update on market conditions, an assessment of the likely selling price of the home
and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to
deter potential buyers.

Buyers will feel intimidated.

Potential buyers will spend less time in a for-sale home if the owner is present during the
showing, and they'll be shy about discussing its pluses and minuses with their own agent if the
owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be
negotiating directly with the seller. Having an agent on each side creates an effective emotional
buffer between the seller and buyer.

FSBOs are likely to stumble into legal trouble.

Real estate transactions are fraught with potential liability for unwary sellers, particularly in states
that have extensive disclosure requirements (e.g., California). A FSBO who overlooks even one
required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit
after the transaction closes.