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Why Buyers Might Be Hesitant To Buy
From A For Sale By OwnerMany homeowners believe that to maximize their profit on a home sale they
should sell it themselves. Some say selling a home is simple and why should they pay a
broker fees for something they could do themselves. In fact, close to 20% of all the homes
sold last year were sold for sale by owner (FSBO). However, close to half of them said
that they would hire a professional next time they sold. Thirty percent said they were
unhappy with the results they achieved. Why? Many told us that the time, paperwork and
everyday responsibilities involved were not worth the amount of money they saved in
commissions. For others, the financial savings were even more disappointing. By the time
they figured the amount of fees paid to outside attorneys, inspectors, appraisers, title
lawyers, escrow and loan officers, marketing, advertising... they would have been better
off having paid the broker’s fee which would have included many of these charges up
front.
Tampa Bay Florida For Sale By Owner (FSBO) Misconceptions, Commissions and items
to research
Some misconceptions to ponder - When the home owner enters into a contract with a Real
Estate Broker/Agent, it's still a "For sale by owner." The Brokerage is actually
contracted or hired as an employee by the seller/owner under Florida Statutes to represent
the best interests of the owner/client. The owner is still the seller and only being
represented by the Broker/Agent. However, For Sale by Owner, Fisbo or FSBO is generally
used to describe a home owner who is selling property without the service of a
Broker/Agent.
There is another general misconception if a seller is represented by a Broker. Many Buyers
assume that any commissions are always entered into the asking price and therefore the
price is inflated by the additional commission. Many buyers think that the asking price
will be lower if there isn't a Broker/Agent representing the Seller. Many Buyers assume
they can always
save 6 or 7%. That assumption is generally incorrect.
There is no set commission rate. In fact, it is illegal under the Sherman Clayton
Anti-Trust Act and Florida Real Estate Law to fix or conspire to set a fixed commission
rate. Some Brokers /Agents offer their services for low commissions and also flat rate
structures. Many times the discounted commission is tied to discounted services. All
sellers have the right to discuss any fees, commissions, and services before entering into
any listing agreements.
For most people, a for-sale-by-owner (FSBO) transaction is more difficult than it seems.
RE By Owner.com affords FSBO's the opportunity to get some free exposure. Owners
must research and understand the law and the legal ramifications to protect
themselves. Remember, this may be the biggest investment and most complicated transaction
in your lifetime.
Some people are able to sell their own property without the services of a real estate
agent. Some are experienced home sellers. Some are transferring ownership of their
property to a family member or a tenant who's already living in the home. Some are just
plain brilliant. Those circumstances are the exceptions.
Here are a few things to contemplate.
In a typical real estate 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 paid for services, unless the buyer has signed a buyer's
brokerage agreement that provides for a fee for services. Even if a FSBO offers to pay the
buyer's side of the commission, many agents won't enter a transaction with an
unsophisticated seller.
FSBOs aren't permitted to put their home in the Multiple Listing Service (MLS) because
these membership organizations are only available to licensed real estate brokers
and agents. FSBOs cannot get visibility in many big search engines and Real Estate Web
sites and must market independently at their own expense. (yard signs, local newspapers,
web pages, flyers, etc). They must also answer calls and make appointments, many times
with unqualified buyers. Pre-qualifying a potential buyer is just another job skill to
learn for first time sellers. FSBO's get a great deal of day and night "just looking
appointements."
Most FSBOs believe their own home is worth more than comparable homes in the same
neighborhood. Many times they are wrong. A real estate agent can provide a comparable
market analysis for the likely selling price of the home, an update on local market
conditions, tips for improving the home's selling appeal, information on lenders.
Overpricing a For Sale By Owner Property is the number one complaint of Potential Buyers.
Potential buyers usually spend less time in a for-sale home if the owner is present during
the showing. They are usually wary about discussing their opinions even with their own
agent, if the owner is within hearing distance. Buyers generally are less inclined to make
a legitimate offer when negotiating directly with the seller. FSBO's generally are not
adept at negotiating and often take a low offer as an insult. They lose a sale because
they are personally attached to their property and fail understand the Buyers motives. An
agent is the buffer between the seller and buyer. You must have a strategy to overcome
this obstacle.
Real estate transactions are fraught with potential liability for unwary sellers,
particularly in states that have extensive disclosure requirements (radon, asbestos,
etc.). A FSBO who overlooks a required form or legally mandated disclosure could face an
expensive buyer lawsuit after the transaction closes. If your are a for sale by owner
always consult with a Real Estate Attorney or Licensed Real Estate Professional before
entering into verbal or written agreements.
RE By Owner.com affords owners the opportunity to get some free exposure. Ultimately a
large majority of owners decide to hire a broker. We wish all the best to owners in their
marketing endeavors.
Every year, over 9 million vacationers visit Pinellas County and thousands become
residents. The internet is a world wide exposure medium reaching potential buyers
"before they arrive." Contact us about our other real estate
marketing plans.
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