There have always been those homeowners who want to try to save the commission and sell their homes themselves. In the real estate industry, we call them FSBOs – For Sale By Owners. We also use FSBO as a verb as in “they decided to FSBO their home”.
In Kitchener-Waterloo’s current market, with home prices still rising and inventory still well below historical averages, trying to sell by FSBO, on the surface looks easy. It looks easier than ever, right?
Here are the reasons not to FSBO
1. Direct Exposure to Prospective Buyers
According to National Association of Realtor’s 2018 Profile of Home Purchasers and Sellers, 95% of buyers browsed online for a home last year. Just 13% of purchasers looked at print ads (newspapers and real estate magazines). Most real estate agents have moved most of their marketing online, where people are looking. This means not only the MLS (realtor.ca) but optimizing for Google too.
Try this: Google a home for sale in your neighbourhood and see what comes up.
2. Results Come from the Internet
Where did purchasers discover the houses they in fact bought?
- 50% on the Web
- 28% from a real estate agent
- 7% from a yard sign
- 1% from newspapers
The days of selling your house by putting out a yard sign or putting an ad in the paper are long gone. Having a strong Internet presence is essential.
3. There Are A Lot Of Individuals to Negotiate With
Here is a list of some of the individuals with whom you need to be prepared to work with if you choose to FSBO your home
- The buyer looking for the very best deal possible
- The buyer’s representative (Realtor) who solely represents the very best interests of the purchaser
- The home inspector working for the purchaser who will usually discover some issues with the house.
- The appraiser.
4. FSBOing Has Become More And More Difficult.
The paperwork associated with selling and purchasing a home has actually increased considerably as industry disclosures and guidelines have actually become mandatory. This is one of the reasons that the number of people FSBOing has actually dropped in the last 20 years.
Note: statistics on FSBOs is nowhere near as complete as MLS listings and sales. I’ve read that FSBOs have dropped from 19% to 7% over the last 20+ years.
5. You Net More Cash When Using an Agent.
Numerous property owners believe that they can save money on the real estate commission by selling on their own, however they do not understand that the primary reason buyers look at FSBOs is since they also think that they can save money on the real estate representative’s commission. The seller and purchaser can’t both save the commission.
A research study showed that FSBOs do not in fact save anything, and in some cases might be costing themselves more, by not listing with a sales representative employed at a real estate brokerage. This is because:
- Lack of exposure to a large buyer pool
- Little chance for competing offers
- Lack of experience
If you are thinking of FSBOing your home, don’t do it. You have little to gain and much to loose.