2 Things You’re Signing Up For As A For Sale By Owner
Disclaimer: This is more of a rant in written form than it is education.
There is one reason and one reason only to go for sale by owner; you don’t want to pay the 6% commission and you’d rather keep the money to yourself. I get it.
But is saving some money really worth what you’re signing up for? I could, technically, cut my own hair. But is saving $20 really worth messing up my hairline and looking like a crackhead? No.
A quick Eye Opener
Most people buying homes will fit into one of the following categories: first-time homebuyers, motivated buyers that need to buy asap, investors, and lookie-loos.
First-time homebuyers will always be using an agent (if they’re smart). They don’t know the process, they’re probably very nervous, they’re being very cautious, and they will be looking for the perfect home. They will want someone who helps them find that perfect home and guide them through this nerve-wracking process.
The second type is the motivated buyers that need to buy asap. These could be buyers that are moving from a different city or state and need a home, they could be homeowners that just closed on their home and need a replacement, it could be an investor that did a 1031 and needs to find a replacement asap, or something of that nature. These people will be using an agent because they don’t want to waste time searching for homes and they won’t be looking on Craigslist for your FSBO. They will hire an agent to find them something using the MLS.
The third are investors. Investors will more than likely be bargain hunters that want to get a really good deal on a property. A FSBO is great because they have a leg up on you, and they will also be using an agent if they’re smart. A FSBO is at a huge disadvantage in this situation because you’re now dealing with an experienced investor that’s working with a good agent to find a deal. You are the target.
The fourth is the lookie-loos. These are people who will not buy and are not even qualified to buy. They’re just casually looking around to see what’s out there, or they may be nosey neighbors that want to see what you are up to. Be prepared to deal with this bunch if you’re going FSBO.
Quick Note: Zillow Zestimates are never accurate.
1. Time Time Time
Do you like doing marketing and spending thousands on it, doing showings and wasting time with unqualified buyers, being targeted by bargain hunters because you’re a FSBO, doing open houses for 2–4 hours every weekend, reading through contracts for hours that you don’t understand, doing a proper CMA to value your property without bias, working 4–8 hours per day (at least) to make sure the house is getting the exposure it needs, doing stressful negotiations, and giving up all your free time that you could be spending with family or hobbies?
If you don’t, then rethink going for sale by the owner because these are all things you’ll have to deal with if you’re selling a home on your own.
If you value your time and you’re not willing to make selling your home a full-time job, you’re not going to like selling a home on your own. Agents exist because selling a home is literally a full-time job.
You can’t just go on Zillow and put your house on the market at the Zestimate, which by the way is almost always wrong.
2. Legal Liability
There is a lot of risk with trying to represent yourself in a court case just because you don't want to pay for a lawyer. But they exist for a reason, whether you like them or not.
This is the same with real estate agents. We’re because selling a home is a full-time job and we actually like doing it.
Shocking news: There is a big list of disclosures that you are legally OBLIGATED to present. These contracts are legally required and are not even available to anyone that doesn’t have a real estate license. On top of this, it will cost you thousands of dollars just to have access to these forms.
My mentor, at the start of his career, had a checklist of the 250 things he did to get home sold. Yeah… And most FSBOs don’t even know about 5 things they should be doing.
This is why agents are here. Agents deal with the legal liability and the hours required to make sure your home gets sold.
When someone goes FSBO, you’re the one signing up for that legal liability all on your own, while on top of that, dealing with all the other things I talked about earlier.
Closing Thoughts
Going FSBO will save you money, but only if you’re willing to deal with the time-consuming process and the legal liability that comes with trying to get it sold.
This is not to discourage people who want to sell their homes on their own, but it is a warning so they know what they’re signing up for.