Monday, December 9, 2013

For Sale by owner woes: Why it's so hard to sell your own home - By Carrie Colby

For most people, a for-sale-by-owner transaction simply isn’t in the cards. 
Granted, some people can sell their own homes without the services of a real estate agent. But the majority of these successful do-it-yourselfers are experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who’s already living in the home. These circumstances are the exception, however, not the norm. For most people, a for-sale-by-owner (FSBO) transaction simply isn’t feasible. Here are some reasons why. 

FSBOs can’t list their home in the multiple listing service (MLS). FSBOs aren’t permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. There are some agencies that will put your home in the MLS for a small fee but that is where their help ends. FSBOs are also locked out of many home search engines and Websites, including the gigantic 

Agents usually won’t show FSBO homes. In a typical home sale, the buyer’s agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there’s no guarantee that the buyer’s agent will be compensated for his or her services, unless the buyer has signed a buyer’s brokerage agreement that specifically provides for such compensation. Even if an FSBO offers to pay the buyer’s side of the commission, most agents won’t want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects. 

FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they’re wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home’s buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers.
Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they’ll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they’ll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer. 

Negotiating once an offer is received is an awkward exchange between the buyer and the FSBO owner. It is the most difficult part of the selling process and is much easier if there is a third party involved to act as the go between and to help mitigate problems with financing, repairs etcetera. 

FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, and the State of Maine has extensive disclosure requirements. An FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes. Selling a home is challenging enough. 

Don’t make it harder by trying to do it yourself.

Carrie Colby is a Realtor® the Broker/Owner of Premier Properties in Raymond she can be reached at 1263 Roosevelt Trail in Raymond.

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