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FSBO Drawbacks – 7 Reasons Not To Sell The House Yourself
Even though you don’t need to be a professor in real estate to sell your house yourself, it also not as easy as playing snakes and ladders.
There are some skills you either need to have a flair for or have to be quick in picking up.
There’s a reason why home buyers and sellers continue to engage property agents to help them with housing issues even when they know fully well that they can choose not to hire them at all.
Here are some of the most common cons and disadvantages of taking on the task of selling the house yourself by going the FSBO route.
1) How do you price the house?
No matter which way you cut it, one must admit that there is an art to pricing a house for maximum profits.
There is a market value to the house. There is also your perceived value of it. Then there is the dreamy optimistic price that you want a buyer to agree to.
And among all these numbers and figures, there is the optimal price that will rein in the most qualified prospects and maximize the sale price.
Few people would even inquiry when a house is overpriced. Yet there is a tendency for FSBO operators to overprice because the fear of underpricing can be overwhelming.
Selling your house below what the market would be willing to pay for can be a tough pill to swallow.
This is why most homeowners who are attempting to sell the house DIY-style often overprice their way out of every deal… this is assuming that there are people interested to begin with.
An agent could generate data of recent transaction prices, and fuse that with his in-depth knowledge of the local market, and work out an optimal price range within 10 minutes.
2) Do you prepare the house?
The selling process consist of a few stages. And one of the key phases is the open house.
This is when interest parties make a site visit to have a real actual feel of the place they could be buying.
Very often, potential buyer become serious buyers on the day of the open house itself.
Something about the house triggered an emotional and logical appeal that motivated them to make an immediate offer backed up by a booking fee.
The secret to preparing homes for sale is by staging it.
You could of course read up about how to stage your home to create the perfect conducive ambience for people to pull out their checks.
But instead of spending hours on reading up and more hours to trial and error, why not just let an experience agent to get it done in a jiffy?
3) How to market the property?
With all the real estate portals online these days, it is easy to form a misleading impression that marketing a house is as easy as signing up for accounts and start posting on the listings sections.
But the truth is that online classifieds are just a small part of what really goes on behind the scenes.
You could of course, get lucky with a simple listing.
But surely you cannot solely depend on these web portals to find a good serious buyer, can you?
If you don’t have a good marketing plan or don’t even know where to start, the odds are against you in finding a buyer willing to pay your price.
4) What about qualifying prospects?
I’m sure most people would have the experience of being a newbie on a new job and becoming overrun with work.
And a few months later you become so capable in your tasks that you could accomplish the same jobscope in which you started with in a fraction of the time it first took you.
One of the most important elements to this boost in productivity is that you know where to spend your time on and sieve out the things that don’t deserve your attention.
For example, you might have gone through the hundreds of emails getting into your inbox. While after time, you know which ones concern you and which ones can be dragged into the trash or archived.
It’s the same here with qualifying prospects.
When you go FSBO, you could be drowning in inquiries if you have listed an attractive price for the house.
There are going to be prospects who are:
- Real interested buyers but don’t have the budget
- Real interested buyers with the financial power
- Other FSBOs who are using you as a tool to research the market
- Agents who are trying to get hire
- Curious people who are just calling everyone to learn more
- Kids who have nothing better to do than to prank call numbers
You probably don’t need any property expert to tell you that you should focus your time on prospects who are interested and have means to close.
Inexperience can cause you to waste time on also-run and neglect the prospects that really matter.
Agents have a knack of calling people out on their B.S. through years of practice and observations.
It is something you can tap on when you hire one.
5) Can you negotiate?
Negotiation is a skill that transverse through all industries.
If you can negotiate well in a particular industry, the odds are that you can bring those skill sets into another one too… like real estate.
However a key element that makes real estate negotiation a little different from other industries is the presence of emotional and illogical decision-making.
For example, negotiating for the best price as a procurement officer against a supplier is a straight up numbers confrontation. You would of course logically go with the best price, and sometimes the best value.
This can be a totally different story in real estate.
Buyers can have various emotional and nonsensical reasons that cause them to buy… or not to buy.
This is why you need to have a basic understand of the fundamentals in real estate negotiation in order to be prepared for what you are getting into.
6) Are you ready to take on the legal responsibilities?
If you have never had a hands-on experience in handling a transaction, you could be in for a surprise.
There are various items in the checklist to complete in order to close without fear of future legal problems.
And a lot of these minor tasks that you have to complete come with weird names. And some of them consist of items within them with even weirder names.
Granted. And agent is not a real estate attorney. But he can guide you on what you need to do on each phase so that you don’t have a “don’t know what you don’t know” situation.
He should be able to comprehend real estate jargon as well.
Anyway, if you are already saving on agent commissions, try not to save on legal fees.
The peace of mind a good lawyer can offer is well worth the fees they charge.
7) Can you do closing?
So you have set a high price, and a buyer is willing to buy.
Do you know what needs to happen next?
If you are lucky, the buyer’s agent might guide you along.
But what if you cannot trust that agent or the buyer has no agent?
There is a whole list of activities that need to happen to finalize closing. Too long a list to list down here.
The point of all these mentioning of disadvantages of going FSBO is not to pour cold water on your enthusiasm. There are of course, various advantages as well.
It’s just to get you ready for what to expect should you decide to sell your house yourself.
I just find that it is so much easier to let an agent who is properly and professionally trained in all these handle the job of selling.