Why For Sale By Owners FSBO Homes Fail
One thing that makes the world go around is the desire to save money. Everyone likes to save a few bucks. In Real Estate saving on a Realtor commission translates into big dollars. It is hard to blame anyone for wanting to save the type of money that is made when a Realtor sells a home or condo.
While commission rates are completely negotiable in Texas, someone selling their home will more than likely be paying a Real Estate commission between 4%-6% on the sale price of the property.
On a $240,000 (about the average sale price of a home in Austin currently) home a commission of 6% is $14,400. There is no question that is a lot of dough!
Nationally the success rate of a “for sale by owner” (FSBO) is very low. Selling a home for sale by owner is not an easy task and that is why more than 90% of FSBO’s end up using a Realtor. Why is going the FSBO route so difficult to pull off?
These are just a few things I have come across:
The Wrong Price (This is the BIG ONE)
It is the most critical element when selling any product but especially so when you are talking about something as large as a home sale. Think about what you looked at first when you bought the house you live in. Ok, for some of you the second thing. Even homes that are listed with a Real Estate agent and are overpriced stand a slim chance of selling. They sit, and sit and sit. Overpricing as a Texas FSBO makes it next to impossible!
Many sellers atempt to do their own market research and end up choosing the wrong price or have a Realtor help them with appraising the property and ignore their advice. Acessing the sale price information (which is different than what it was on the market for) is deficult and there is tons of inaccurate information on the web.
Lack of Exposure
Some for sale by owners do nothing more than throw an old beat up for sale by owner sign in the front lawn and expect that will do the trick. Then there are others that think that going in one of the FSBO sites is going to bring lots of traffic. I’m sorry but WRONG! It’s just not what we’ve statistically see happen.
These sites generate a very small piece of Real Estate traffic in comparison to the sites some of the top web savvy Realtors use to promote homes. Their sales pitch is always “we will give you world wide exposure and save you thousands of dollars!” This could not be further from the truth. Just go to Google or any other major search engine and type in a local search with Real Estate keywords a buyer would use.
Things like your town, state and homes for sale. Using my home town as an example would be Dallas, TX Homes for sale. Do you think a FSBO site is going to come up in the results? Not a chance! Go ahead and try it with your town. It will be dominated by sites that show homes listed by Real Estate agents. I don’t want to burst your bubble but give it a shot.
The unfortunate cold hard facts are thousands of buyers will not even know a FSBO home is for sale. If you’re thinking who cares about the internet, where are you now!
Buyers Want to Share in the Savings
One of the other factors associated with selling a home FSBO is the fact that many of the people viewing the home are going to want to share in the commission savings. Many of the potential buyers who will be looking at FSBO homes are bargain hunters. Their line of thinking is that since the seller is not paying a commission they should be able to offer less for the home. Sellers end up receiving low ball offers on many occasions. Ask, if you know any, people that have attempted this and hear the stories.
Home Accessibility and Buyer Qualifications
These last two reasons are often overlooked by someone trying to sell their own home. It is hard to sell a home if a buyer can’t get in to see it. Often times when a FSBO is trying to sell they need to match their schedules with the buyer which sometimes is not that easy especially for those that work full time. A Realtor of course makes this part of the home sale process go much smoother.
Lastly, home sellers need to be equipped with the knowledge of how to qualify potential buyers. There is no point in having unqualified foot traffic going through a home. This is also part of a Realtors job. Most buyers that view homes today with a Realtor are pre-approved. As a FSBO you need to make sure that the same holds true when showing your home.
If you can sell your home on your own all the power to you! You will be in the minority but you might make it happen!
If you are a Texas for sale by owner and find you do want the help of a Realtor, call the Big Man in Texas real estate.
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