Real Estate FSBOs - a Perspective

I'm not ashamed to admit it. My neighbor is a FSBO. He is selling his house as a for sale by owner. I've watched the debacle happen. First, there was a sign in his yard listed with a Realtor's phone number and name, then there was snow. Then there was a small sign with a tiny scrawled phone number. And then again there will be snow.

What happened?
This is the wrong time to be a FSBO. The time of the FSBOs was when the market was so hot, people were thrilled to find a home that they suspected had not been seen by anyone else. Home buyers were making offers before yard signs went up. All to avoid being in multiple offer situations. I know. I was there. I saw a house sell on a listing appointment. I'm not kidding. But we aren't in that market now. And if houses are not selling with marketing exposure, low pricing and buyer incentives, FSBOs stand a very low chance of ever selling at all.

It's not about (only) about commissions!
I know. You want to save money, right? And you think listing your home as a for-sale-by-owner will save you thousands. Let's put that into perspective. First off, if you think you're going to save the entire real estate sales fee, you're mistaken. If you want to get your house sold, your best bet would be to co-operate with at least the buyer's broker. The chance that someone will walk by your yard sign and buy your home are almost nil. (And, by the way, "Hey, you never know!" is not a marketing strategy.) So, co-operating with the buyer's broker will cost you 3% of the sales price. Some of the best FSBOs have been sold this way, but you better count on having a network of Realtors for this to work or very good marketing.

Which brings us to the second hurdle - just how are you going to market the home? By trying to sell the home yourself, you have just taken on the role of the listing agent. The first thing any listing agent does is enter the home for sale into the MLS, where it is seen by all the other agents. Craigslist, Zillow, and that other Red... whatever-it's-called - no other site compares to the MLS. Why? I'm glad you asked.

It's a process
Everything Realtors do follows a routine. It's boring at times, but that's why it works. We know the next step. We don't have to stop to think - it's automatic. So when your home is not on the MLS, chances are it won't get noticed. We're not intentionally ignoring it, it just happens. You are not co-operating with the normal rhythm of work. And we haven't even talked about showings yet. Unless you are willing to stay home so that home buyers can see your home while they look at ten others (yes, that is how homes are viewed!) they're not making the extra trip. Sure, you can put a keybox on, but are you really going to hand out that combination to whoever calls and let them walk through your house when you're not around?

I know it seems like an easy task: show a home to a buyer, get a title company and get the home sold. The reality is very different. I know we're at a time when real estate agents are hated. But the truth is that, like every other profession, selling real estate is pretty hard work. And going FSBO isn't the answer.