Industry insiders claim that FSBO failure rates range from 75% all the way up to 95%.*
While selling your home on your own in order to save paying a real estate agent’s commission may seem like a great way to save money, the truth of the matter is that such FSBO sales are seldom successful. So why are homeowners having such a hard time marketing their own homes, even in today’s heating-up marketplace?
Fail #1: Over or Undervaluing the Home
Wouldn’t it be nice if there was a Blue Book for homes? All you’d need to do to come up with the right price is to look up your home’s make, model, and general condition, and voilà! The price is right.
Sadly, all most sellers have to go on is comparisons to other local properties, but this is hardly a foolproof system. Your neighbors may be listing their homes around $500,000, but how many homes are actually selling for that amount? Overpricing your home is, in fact, one of the biggest mistakes home sellers make, ensuring that the property takes forever to sell (or worse, won’t sell at all).
You’ve also got to be wary of underpricing your property. If you sell your own home for less than what you could get selling through a top selling REALTORⓇ, then you haven’t really saved any money after all.
Fail #2: Expecting the Home to Sell Itself
Many home sellers today purchased their homes in the boom years of the early 2000s, when it seemed that homes sold within minutes of putting up a “For Sale” sign in the yard.
While that may have been true 10 years ago, these days you have to compete if you want to attract a buyer. And by “compete” we mean market, which means you’ve got to come up with a sales plan and devote plenty of time to your marketing efforts. One top REALTORⓇ in Tallahassee, FL, estimates he and his associates spend over 10 man-hours per day just promoting their listings**.
Fail #3: Skimping on the Details
So you’ve got a sign up, made some fliers, maybe you’re even advertising your home online. Good for you! Do not, however, make the rookie mistake of thinking that all you need is a picture and the words “for sale”.
Most would-be buyers won’t even consider your home unless you’re up-front with an asking price, and of course you need to provide full contact details, names as well as numbers. When it comes to fliers and online advertising, the more details the better. A good listing provides square footage, lot size, number of rooms and bathrooms, age of home, a floor plan and as many pictures as possible.
Fail #4: Specifically Targeting Buyers
Wait a minute – don’t you want to attract buyers? Isn’t this what selling your home is all about? What you have to realize is that 88% of buyers are working through agents***, and the homes they’ll see are the homes their agents steer them towards.
So how do you make buyers’ agents aware of your FSBO offering? Well, that’s a tricky one. You could hand-deliver your flyers to every realty office in town, or you could pony up the fee to get your home listed on the MLS. Even if you do these things, though, there’s a good chance many buyers’ agents aren’t going to want to bother working with a FSBO seller, so you’re limited right off the bat to just a small share of the homebuyer market.
Fail #5: Refusing to Play Nice with Buyer Agents
One reason that many buyer agents won’t steer their clients toward FSBO listings is because the FSBO seller hasn’t made it clear from the outset that he’s willing to pay the buyer’s commission out of the proceeds. A typical buyer’s agent can expect to receive about 2.5-3% of a home’s selling price, and without that incentive, there’s no reason to show your home.
In fact, if you really want your FSBO home to move, you’ll need to offer a similar commission to transaction brokers as well as buyer agents. So, it’s not just as simple as listing your home yourself in order to save the full 5 to 6% of the listing agent’s fee.
Fail #6: Slow Response Time
How long do you think you can wait before you get back to someone who’s called about your home after seeing your yard sign, flyer or online ad? Is it okay to get back to them the next day, or at least wait a few hours?
You may be shocked to realize that according to a study conducted by an MIT professor, your odds of contacting a lead drop 100 times if you wait as much as half an hour instead of getting back to them in the first five minutes****. Yep, like that Tallahassee REALTORⓇ (the one from #2) said, selling homes is a full-time job, and if you snooze, you really do lose.
Fail #7: Nobody’s Home
Okay, maybe you’re Fast Freddy and you answer every call on the first ring. Awesome. But…are you actually going to be available to show your home when the prospective buyer wants to see it? If you have a full-time job other than home sales, chances are the answer won’t always be yes.
One thing you could do is purchase a combination lock box in which to leave your door key, and this will work just fine if there’s a buyer’s agent willing to show your home to her clients. If there’s no agent involved, though, you probably don’t want to let just any random stranger into your home when you’re not there.
Fail #8: Underestimating the Complexity
Many times, homeowners will choose to go FSBO because they “just don’t want to deal with the hassle” of going through an agent. It seems straightforward enough – you have something to sell, other people have money and want to buy. Just like selling a used car or granny’s antique armoire, right?
When it comes to a home sale, though, there’s so much more involved than a simple exchange of goods for money. There’s financing, inspections, offers, counter-offers, contracts and closings. The list goes on and on, and if you aren’t prepared for all the steps (and the paperwork), you may soon find yourself with absolutely no clue how to proceed.
Fail #9: Trying to Go it Alone
Ok, so you know you’ve got to spend time and money marketing your home, respond to every inquiry ASAP, be home to show your home whenever a buyer wants to see it, deal with home inspectors, negotiate financing, and then navigate your way through the tricky waters of closing.
Do you really have the time and the know-how to arrange for all of this on your own without completely losing your sanity? You can’t play every part in the symphony if you’re just a one-man band, after all. Even a super-REALTORⓇ isn’t going to carry out every aspect of the home-selling process all on her own, but she doesn’t have to. Instead, she’ll leave it up to the qualified experts (mortgage broker, home inspector, real estate attorney) she’s already got on speed dial.
Let our qualified, professional agents at Life’s a Beach Real Estate help you avoid the pitfalls and complications of buying and selling real estate here on the beach!