It’s a seller’s market, so it’s easy to sell a home, right? That’s only partially true. For Sale By Owner (FSBO) listings lead to disappointment even in a seller’s market. Here’s how to fix 10 common mistakes.
For Sale By Owner Mistakes
Home prices are up, listings are going fast, and sellers have the upper hand. Those are the headlines you hear in a seller’s market. They make you think there’s little to worry about when selling your home. So why not sell it yourself and save money on Realtor® fees?
Sellers pay the real estate fees, roughly 6-percent of a home’s purchase price. When you sell it on your own, you instantly cut those fees in half with the potential to save even more. What’s not to like about that? Real estate agents know there’s plenty of problems with focusing on commissions.
The dollars and cents look great on paper when you do the math for a FSBO property. However, it may not make sense to sell your own home considering all the hurdles you’ll climb on your own.
There’s a long list of things that go into selling a home fast, even when sellers are in the driver’s seat.
The ten reasons For Sale By Owner (FSBO) listings often lead to disappointment even in a seller’s market.
1. Setting emotion aside
First, home sales are emotional and personal. Even if you’re ready to sell, there’s emotion tied to your home. The good and bad memories you made in your home rise to the surface. Detaching yourself from them is difficult especially when the real estate transaction doesn’t go as planned.
When you sell your own home, it’s hard to separate your emotional ties to the home from the business or transactional side of your home.
Real estate agents take the emotion out the transaction, making it easier to make decisions and ultimately sell your home.
2. Bad photos
You’ve heard the saying — a photo is worth a thousand words. It’s true, especially in the digital real estate age where people look at hundreds of homes online before they step foot in one.
Your photos need to stick out. Sure anyone can take a photo. However, there’s an art to taking real estate photos. Lighting and angles make a big difference in how a room and home appear in a photo.
Without high-quality photos, your listing is already at a disadvantage compared to your neighbor’s listing.
3. DIY home staging
Since taking photos is so important, how do you make your home look good for those photos? You need a home staging professional.
Of course, you can stage your own home. I even share some of my home staging secrets with before and after photos for DIYer or FSBO. However, an Accredited Staging Professional, truly makes a difference.
Consider the numbers — I remembered you like numbers. That’s why you’re selling your own home or considering it, right? 95-percent of ASP homes sell in 11 days or less and for 17-percent more.
Remember that emotion? Independent stagers don’t have an emotional tie to the items in your home. They know how to de-personalize a space and have the tools to make the room look larger and updated.
Let’s face it. Most homeowners, don’t have a storage area full of items that make a home pop. You may have a basement full of items, but if they had value wouldn’t they already be in your living space?
You know those areas in your home that you don’t like? We all have them. A professional home stager knows how to downplay the negatives of a space and feature the positives.
They do this with a mix of your items and their storage shed of tricks that make a room stand out.
4. Poor listing description
Once you have the photos, you need words to describe your home. Anyone can write a listing. It doesn’t require a degree, but those with a real estate license know the right descriptive words to sell a home.
Think about the last home you sold a home. Did the Realtor® describe your home as you would? Probably not. They find ways to capture a buyer’s attention with compelling words.
Real estate agents have a pulse on what buyers want. That inside knowledge helps them market properties with words in ways that a regular homeowner can’t.
5. Wrong list price
Even in a seller’s market, you want a home priced to sell. The longer it sits on the market, the more buyers turn away from it. They think something must be wrong with it, or they make an even lower offer looking for a deal.
Home pricing constantly changes depending on market and neighborhood factors. Agents know current home values and how to price a home that matches the latest trend.
The National Association of Realtors® found 18-percent of sellers listing their own home struggled with getting the price right.
It hurts you on the front end, trying to get buyers in the door, and later on once you have an offer on the table.
Find out the value of your home instantly!
6. No negotiation strategy
There’s an art to negotiation. You need a strategy to deal with buyers. Most buyers are represented by an agent because they don’t pay for the service. So, you’re at a disadvantage if you’re selling a home and negotiating with a trained real estate agent. They may outsmart and outwit you, costing you money.
There’s a price to making negotiating mistakes. According to the National Association of Realtors®, the average sales price for an agent listed home was $240,000 in 2016. FBSO homes sold for $185,000 on average. That’s a $55,000 difference.
7. Undervaluing time
FSBO sellers underestimate the value of their time. It’s valuable. Would you rather spend time navigating the real estate business, that you know very little about, or making money doing your job?
There’s a hidden cost to selling your own home. You need to factor in the value of your own time to make the sale happen.
Plus, the longer a property sits, the more it costs you. You’ll see lower offers and increased costs to maintain the property like utilities, mortgage, taxes, and insurance.
Related Link: For Sale By Owner: 10 Ways To Safely Hold An Open House
8. Not thinking about liability
If something goes wrong with a real estate transaction, your agent or title company typically offers insurance to cover problems.
If you sell a home on your own, the buyer may come back on you.
Do you want to assume that type of liability?
9. Underestimating stress
Let’s face it. Home buying and selling is stressful even on a most smooth purchase. There are the nail-biting moments when you’re waiting to see if your offer or counteroffer is accepted.
There are the home inspection and that negotiation process.
Then there’s the buyer’s financing. You hope that falls through quick enough to close.
It’s stressful throughout the sale of a home.
Plus, FSBO homes attract a whole new crop of potential buyers. You’ll hear from real estate agents trying to get your business, investors, and scammers. You don’t have anyone protecting you when you sell on your own. You’re on your own so to speak. That just adds more stress to an already difficult process.
If you choose FSBO, you’re navigating the stress by yourself. Sometimes it drags on for weeks and months.
How to sell your home stress-free
10. Not reading the fine print
Real estate agents disclose their fees. There’s the obvious 6-percent commission, and possibly a broker fee. It’s all disclosed in the paperwork you sign.
When you sell your own home, you sign a contract too. Make sure you read it and understand the terms.
Sometimes there are upfront fees or commissions associated with the package. You’ll likely pay a fee to get your house on MLS and other marketing websites.
A la carte pricing adds up. Of course, you can hire a photographer, home stager, notary, title company, FSBO fees to sell your own home. However, the costs add up. A la carte is not as glamorous as it looks.
Read all the fine print, so you know what you’re signing.
What was the biggest surprise you faced selling your own home?