Buying a for sale by owner can seem like a good idea. There are, however, greater risks associated with this. Let me tell you a story about what just happened.
For Sale By Owner Homes
11% of all sales are by owner. This is what the National Association of Realtors has for 2019. I can’t say for sure but when I began my career it was much higher, closer to 20%. What I can tell you is that the number of homes being sold by owner is going down every year.
Why would 89% of all homes for sale use a Realtor? If there is no need, then there is no answer. 89% had the need – they wanted to sell their home. 89% found the answer in a Realtor. So what’s with the other 11%?
My Top 5 Reasons Homeowners FSBO
- To save the commission
- They think their house is worth more than agents have told them
- The belief that they can do it better themselves
- Bad opinion of Realtors
- Independent personality
My Top 5 Reasons Buyers Go to FSBOs
- To save money because there’s no commission
- Can negotiate better directly with the owner
- Think they know it all from the web so no need for an agent
- Bad opinion of Realtors
Doesn’t this sound reasonable? Save money while avoiding awful real estate agents.
The truth is that there are problems in all fields. Think about it. How many kids in your class were A students? The Pareto Principle is where we got the 80/20 concept and he wasn’t wrong. Great agents are your best advocates but you may have to kiss a few frogs before you find gold.
Sellers go FSBO because they want more for their home and think they can get it. Be honest, don’t you feel you know better? I understand it’s disappointing but over pricing never works. Don’t murder an agent because you’ve been told the truth.
There’s also the point about marketing. It’s impossible for any seller to market a home like I do. Safety is another consideration. On any given day would you allow a stranger to come inside just because they want to look at your house? So why is it OK because you are selling? Can you properly vet someone for safety, their ability to pay, their readiness to buy? Are you really going to take your house off the market for someone you can’t fully check out?
Because the focus is on saving money for both buyer and seller, there are so many important things missed.
A For Sale By Owner Disaster
My friend’s son and daughter in law live far from here. They wanted to move and were focused on costs. As a result, they did it all on their own. They researched what their house is worth through the web. Their attorney and home inspector were found online too. The house sold right away and they moved into their new home.
What’s wrong with this picture? They under priced their home because prices are rising. The sales online originated months ago at a price that’s a steal today. Their home inspector missed major faults and their attorney didn’t check the contract he told them to sign.
They moved into their new home and the wife began to feel sick. She went to doctors who eventually found that she had mold spores in her lungs. Mold abatement professionals told them the problem was huge because it’s in the walls. Their $400,000 purchase needs $160,000 in repairs.
Excellent attorneys and inspectors are not cheap. It’s usually only a few hundred dollars more but very well worth it in how you are protected. The contract they signed gave up their rights to sue anyone. Their cheap attorney didn’t notice that clause. So how much did they really save?
If you need the names of attorneys and inspectors I feel are excellent, click here now to let me know.