WHAT DO I NEED TO KNOW about fsbo?
Selling a home FSBO (“For Sale By Owner”) certainly looks like an attractive option. When you consider that realtors traditionally take a 6% commission, it’s tempting to skip the middle man and just put that “For Sale By Owner” sign out in the yard. But there are a number of things that you need to consider first. Depending on your circumstance, the reality is that FSBO may not result in appreciable savings; in fact, you may risk taking a loss. Here are some things to think about when going it alone.
CAN I GET THE BEST POSSIBLE PRICE?
A very common mistake of FSBO sellers is setting their price too high. You might think that setting the highest possible price for your home makes good sense, but the reality is different. If your price is too high, it will remain on the market longer, resulting in a lower sales price. On the other hand, you certainly don’t want to set your price too low either.
The process of arriving at a correct price is complex. In addition to getting an appraisal, you will also need to find as much public data as possible regarding listed or sold homes in your area. Ask yourself whether you are willing and able to invest the time and energy necessary to do this important task correctly.
CAN I REACH EVERY POTENTIAL BUYER?
It has been found that 92% of buyers begin their search for a home online, and that 43% of them find their new home on the Internet. So the days of selling a home by simply putting a sign in your yard and an ad in the paper are long gone. You will need a detailed knowledge of digital marketing strategy to give your home the best possible exposure to the maximum number of potential clients. Otherwise, you risk a lower sales price because of inadequate exposure.
CAN I EFFECTIVELY SCREEN POTENTIAL BUYERS?
In the current economic climate, it’s becoming much more difficult for buyers to qualify for a mortgage. Before accepting an offer, you will need to get a preapproval letter. It’s very common for FSBO sellers to take their home off the market when they wrongly believe that they have a qualified buyer, only to have to put it on the market again when the deal falls through. This wastes valuable marketing time, which in turn can result in a lower sales price once you finally do find the right buyer.
In the process of selling a home, there is a lot of negotiation, and not just with potential buyers! You will also need to negotiate with banks, home inspectors, the buyer’s agent, and possibly the buyer’s attorney. Effective negotiation requires an abundance of knowledge, as well as time.
On the surface, it may appear that you can save a lot of money by cutting out a realtor’s commission. But examine all these factors carefully before making a decision. It has been found that FSBO sales actually average a lower net profit than sales that are facilitated by a realtor, so put lots of thought into your marketing strategy in order to avoid common mistakes.