For Sale by Owner Properties:
As a Professionally Licensed Real Estate Consultant and Associate Broker with many years of experience behind me, I work directly with sellers and purchasers to assist in placing the right buyer with the right home. Most sellers as well as buyers prefer to have a professional representative, negotiating specifically on their behalf, to assure them of a legal, secure and professional transaction.
Most people are not involved in property sales on a daily basis as a Professional Realtor is. With the ongoing changes in real estate regulations and disclosure laws, Realtors are required to take continued education classes each year to keep up. With that in mind, I work hard locating the right property for each buyer and processing the transaction in a professional manner to assure a safe, secure and rewarding transfer of ownership for each party involved.
Approximately 11% of sellers will attempt to sell their home as a "For Sale by Owner" also known as FSBO (Fizbo). Out of these FSBO sellers, statistics show that more than 85% (of them) will contact a Realtor after one year (or less) of attempting to sell their home on their own. When all statistics are calculated, approximately 2.2% to 3.5% of homes will sell as a FSBO, depending on the specific region and current market. Aproximately 81% of those FSBO's that do sell will have a professional Realtor representing the purchaser.
Having a professional representing the transaction on one side is known as either a Buyers Agent or a Sellers Agent. When an agent represents both sides, it's known as either a Dual Agent or Transaction Coordinator. An agent working for both parties must (by law) have written permission from BOTH parties referencing or expressing full disclosure of the agency relationship.
As buyers start to seek properties, they typically start their search on-line or driving around neighborhoods. Once a buyer finds a few properties confirming their intent is realistic in finding a new home, they call on a professional Realtor to assist in findinga multitude of homes available to them through the MLS. The agent then searches all of the properties listed on the MLS and proceeds in showing the buyer potential homes to purchase.
Properties marketed as FSBO’s do not show up on the MLS system. These homes have extremely limited access to the full market of potential buyers seeking homes matching the criteria that their specific home has to offer and just like everyone else, Realtors understand that working smart is always more productive than working hard. Realtors won't put a lot of effort in locating or showing FSBO properties to their buyers when so many homes are readily available on the MLS.
Not only are MLS listed properties easier to locate for Realtors; buyer's agents also understand that they will be working directly with another licensed seller's agent that will allow the transaction to proceed smoothly and professionally; unlike many FSBO transactions that often have so many issues during the process that few actually close.
The largest reason a seller decides to attempt to sell their home as a FSBO is the commission due to the licensed professional agent performing the paper work and assuring proper and professional performance of the transaction. Most FSBO sellers will agree to pay a buyers agent 3% but hesitate on paying for the marketing professional that exposes their property to potential buyers and services the transaction by scheduling the showings, hosting the open houses and creates a professional marketing plan that exceeds any FSBO's possibility with professional photographs, video tours, dedicated QR codes, personalized web sites, aerial images and professional negotiating experience.
The amount of money that "they believe" is saved by marketing the home themselves is around 3% typically, then the seller has to schedule and perform all of the showings, market the home on a multitude of web sites (which are not free) and lose the 94.3% of the available potential buyers that will not consider purchasing a FSBO marketed property. On top of that, they also lose out on the true market of competing buyers looking at homes. With fewer buyers in the FSBO buyer pool and the complex issues that often arise during the transaction, FSBO sellers end up with more days on market with fewer showings and if the home does sell, they typically net far less than had it been sold by a professional.
After agreeing to pay 3% to a buyer’s agent, this brings their true potential income from the property to a statistical loss of 9.3% of the true marketable value due to the lower price needing to be accepted by having fewer buyers placing offers. The loss is far greater than the commission lost by paying the 3% to the marketing professional.
If you have attempted or considered selling your home as a For Sale by Owner, please contact me so I can personally show you the tools, techniques and skills that I can offer you as a Professionally Licensed Associate Broker. I'm confident that I can show you reason for your call.
How Can I Assist FSBO Sellers?
While I would rather locate properties for my buyers, on the MLS; I can offer FSBO sellers an option to improve their odds. I work directly with a large number of buyers seeking homes. However, no one works and performs a professional job for free. If a seller insists on attempting to sell their home as a FSBO, I'm willing to show the property as long as I have a complete criteria sheet (also known as a highlight sheet) reflecting all of the elements of the home including room sizes and photographs along with a complete set of seller disclosures with a lead based paint disclosure (all disclosures are required by state law for ALL sellers to supply to buyers prior writing any offer) and I also have an acceptable compensation agreement signed by the seller prior to any scheduled showings.
If I bring a buyer to a FSBO marketed property, I will be representing the buyer; However, I can assure each side of the transaction; that the process of transferring ownership from the seller to the purchaser will be performed professionally, safely and securely. This helps both sides of the transaction to understand that nothing will be missed in the process.
However, I insist that the seller not attempt to hide or hinder anything during the process. One of the reasons why "some" sellers decide to sell their home on their own is due to issues with the property that they are attempting to hide. While home inspections are common in todays market, I always recommend buyers to pay very close attention to detail during the inspection on a FSBO transaction and make sure thier inspector understands that the home is a FSBO. Issues with the foundation, attic, septic fields, well or the utilities are often found in FSBO properties.
Wesley C. Brooks
Associate Broker
RE/MAX Eclipse
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