There are many ways to sell your home, and For Sale By Owner (commonly referred to as FSBO) is one that is very tempting. After all, it allows sellers to avoid paying listing commissions (~2-3% of the sales price), which can seem like a major draw. The problem is that FSBO houses generally make buyers, and their agents, nervous. Why? Listed below are some of the most common reasons buyers don’t like to buy directly from the owner, and some workaround tips for getting through these issues:
Sentimental Attachment – A house is place of happy memories, family milestones, and hard work. Buyers are uncomfortable previewing a home when a seller is present because they can't openly discuss what they dislike about the home without insulting the seller. Tip - make sure to give buyers space when previewing a property, but make sure they have an agent present at all times.
Missing Pieces – Because there are so many regulations regarding what homeowners must disclose during the process of a home sale, vital pieces of information can be left out, usually inadvertently. Why? Because a homeowner is just that, a homeowner, not a real estate professional. The vast majority of sellers do not have much real estate experience, and this makes it difficult to meet all of the complex requirements during the transaction. Tip - find a reputable escrow office and ask them for step-by-step guidance through the sales process. A FSBO homeowner may also consider using an attorney or the buyer's agent, for a small percentage.
Roadblocks – This could be time it takes an owner to get back to the potential buyer (after all, homeowners are regular people with jobs and busy lives), length of time it takes to get appropriate documentation, and simply the hassle of working with someone who’s not an expert at the process. Time is money in real estate, especially when trying to qualify for a loan. Tip - work diligently with the the buyer's agent and lender. Ask what the common turnaround time is and stick to it.
Price – Owners often list the house themselves because they disagree with the professional’s pricing estimate. Unfortunately an out-of-line price can be a turn-off for buyers. Tip - Get an appraisal before listing the property. This is an unbiased evaluation of the home in it's current condition, and in the current market. They base their appraisal off of other sales in the area, which can't be argued.
The tendency of house hunters to avoid having to buy from an owner means that you’ll have to put even more effort into selling your house by yourself. Be professional, be realistic, and be a sponge for learning as you go.