For-Sale-By-Owner, or (FSBO) is a term used often in the real estate world. Many choose this route when selling their home to bypass commission expenditure. Others choose to FSBO because they feel they don’t need a professional to sell their home.
Whatever the case may be for attempting to sell solo, data from a National Association of Realtors survey shows that less than 10 percent of FSBOs actually sell. So what’s the reason behind such a low percentage rate?
Well, there are many reasons and factors that cause for that low percentage. Based off an Inman article, 10 reasons why for-sale-by-owners (FSBOs) fail we preferred to highlight 5 out of those 10 reasons. Merely because of the fact that these are the 5 reasons we see happen most for the failing sale of a FSBOs home.
1. Too many people to negotiate with. Those deciding to take the FSBO route often have to negotiate with many people. Some of them are likely to be:
- The buyer, seeking the best possible deal.
- The buyer’s agent, who represents the buyer’s best interest.
- The buyer’s attorney (in some regions of the nation).
- Home inspection companies, working for the buyer, which are likely to find some problem or the other with the house.
- Your bank, in case it’s a short sale.
- The appraiser, if the home’s value needs to be assessed.
Without the help of experienced real estate agents, dealing with so many different parties alone is often a tough task for homeowners.
2. Owners fail to understand the contract procedures. The contract to buy a home involves much more than just the price offered by the buyer. Also, real estate contracts have lots of timelines and clauses and involve several common contract contingencies, such as inspections and mortgages. Many FSBOs don’t have a firm understanding of such contracts and might not know what they are agreeing to or how to negotiate particular parts of the contract.
3. FSBOs incorrectly price their homes. FSBOs often price their homes incorrectly due to lack of experience. They set the price too high, which hinders their chances of closing the deal.
4. FSBO homes lack exposure. Homes for sale by owners are often listed on a few websites, but there are many that don’t allow FSBOs to list their property. Thus, FSBOs are unable to give their homes adequate exposure in the market. However, when buyers hire a real estate agent, the professional can give a property online exposure as well as exposure in the local real estate segment of the newspaper. The agent even has tools to extend the exposure further, which FSBOs don’t have.
5. FSBOs fail in the closing process Even after an offer is accepted, many things still need to be done prior to the closing. For instance:
- Get the inspections completed within the allotted time.
- Ensure the attorney(s) approve contracts.
- Ensure that instrument survey is ordered.
- Check if the buyer has obtained written mortgage commitment.
- Find out if title work is reviewed.
- Learn whether abstract is redated.
Read all 10 reasons here: https://bit.ly/1KgEihH
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