FSBOs Must Be Ready to Negotiate
In a recovering market, some sellers might be tempted to try and sell their home on their own (FSBO) without using the services of a real estate professional. If the home doesn’t sell in the first few weeks, there is a very good chance that the house is either not priced correctly for the market or that the house wasn’t property prepared to go on the market. The challenge is that if you exceed 25 Days on Market (DOM), you are going to end up selling for less than the property would have originally sold for if it was priced correctly.
Even if the house is priced correctly, are you, as the Seller, able to handle the negotiation and process of getting the sale to the closing table?
The real estate agent is a trained and experienced negotiator. In most cases, the seller is not. The seller must realize the ability to negotiate will determine whether they get the best deal for themselves and their family.
Here is a list of some of the people with whom the seller must be prepared to negotiate if they decide to FSBO:
The buyer who wants the best deal possible (who doesn’t?)
The buyer who doesn’t have buyer agent representation leaving both sides to possibly flounder through the process
The buyer’s agent who solely represents the best interest of the buyer and appears to make it virtually impossible to be comfortable with the negotiation and process
The buyer’s attorney (in some parts of the country), agents can help you navigate the terms and process.
The home inspection companies which work for the buyer and will almost always find some problems with the house.
The termite company if there are challenges,agents help manage this part of the project
The buyer’s lender if the structure of the mortgage requires the sellers’ participation, agents help manage this part of the project
The appraiser if there is a question of value, agents help manage this part of the project
The title company if there are challenges with certificates of occupancy (CO) or other permits, agents help manage this part of the project
The town or municipality if you need to get the Certificate of Continuing Use and Occupancy Inspections and permits mentioned above, agents help manage this part of the project
The buyer’s buyer in case there are challenges on the house your buyer is selling.
According to the NAR (National Association of Realtors):
For Sale By Owner (FSBO) Statistics
FSBOs accounted for 9% of home sales in 2012. The typical FSBO home sold for $174,900 compared to $215,000 for agent-assisted home sales.
FSBO methods used to market home:
Yard sign: 48%
Listing on Internet: 32%
For-sale-by-owner websites: 20%
Sites with real estate listings (e.g. Yahoo!, Google, etc.): 11%
Social networking websites (e.g. Facebook, Twitter, etc.): 10%
Video hosting websites (e.g. YouTube, etc.): 2%
Friends, relatives, or neighbors: 30%
Print newspaper advertisement: 14%
Open house: 12%
Direct mail (flyers, postcards, etc.): 2%
For-sale-by-owner magazine: 1%
None: Did not actively market home: 31%
Most difficult tasks for FSBO sellers:
Understanding and performing paperwork: 18%
Getting the right price: 14%
Preparing/fixing up home for sale: 11%
Helping buyer obtain financing: 6%
Attracting potential buyers: 6%
Selling within the planned length of time: 6%
Having enough time to devote to all aspects of the sale: 1%
Source: 2012 National Association of REALTORS® Profile of Home Buyers and Sellers