FSBO: For Sale By Owner

A FSBO sign ($3.99) and Sharpie (4 for $599) … Translation?  No deals to be found here…

My father in-law let me borrow his pressure washer recently.  Mold had been growing pretty intensely on my foundation and back deck and I couldn’t wait to blast it to oblivion.  Plus, he was saving me $100 on a rental, or $700 to purchase at Home Depot.

When I went to use the pressure washer, I noticed the hose didn’t fit… it was missing a part.  Three days later and multiple trips to Home Depot, Lowe’s, True Value Hardware and F.W. Webb I finally called the manufacturer who sent me a product-specific part that needed to be replaced.  Ten days later I received the part and was ready to finally use the pressure washer when… the pull cord jammed… making the machine totally unusable without further repair.  At this point, I’m waving the white flag!

Why am I telling you this?  The amount of money I spent trying to fix the pressure washer in the midst of my DIY daydream turned out to be more than the price of the Home Depot rental.  If I monetized all the time I wasted it easily would have been more cost-effective to simply buy a new pressure washer to use, keep and reuse.  I have never tried to DIY a home sale, but this HAS to be how it feels, only multiplied many times over.

My DIY daydream turn nightmare…

Look, I’m not trying to hate on everyone trying to sell their home without a realtor.  Sure, some people have the skills and expertise to do it.  But most FSBO’s (pronounced “fiz-bohs”) simply don’t.  According to Zillow, 69% of FSBO’s fail to sell their home, get frustrated, and hire an agent (i.e. try to fix the pressure washer).  Only 11% of home sellers successfully sell their home without an agent.  The fact of the matter is, some things are just easier said than done…

In addition to the extra time and money you will need to invest in the FSBO process, you must also consider how different it is to sell your home solo, or with a reputable broker.  Simply put yourself in the buyers shoes for a minute.

Think about…

1)  Would you be apprehensive about viewing a home where the actual homeowner is conducting the showing?

Zillow hits it on the head…

2)  Do you trust that the FSBO understands and will be compliant with all mandated state and federal regulations throughout the transaction?

In Massachusetts, for example, lead paint laws include a minimum of $11,000 in penalties for non-compliance…Sellers and real estate agents who do not meet these requirements can face a civil penalty of up to $1,000 under state law; a civil penalty of up to $10,000 and possible criminal sanctions under federal law, as well as liability for resulting damages. In addition, a real estate agent who fails to meet these requirements may be liable under the Massachusetts Consumer Protection Act.”  

When it could get awkward…

3)  What happens when at the showing your no-filter husband spouts out how much he hates the kitchen cabinets right in front of the seller, I mean… homeowner?  Oh, and the homeowner’s late wife picked them out…

4). “Oh, but I know the FSBO…” (see Murphy’s Law and this article on sfgate.com)

Here are some other horror stories.

I fully admit I have an obvious bias being a realtor, however my wife and I have personally hired a realtor for our last three real estate transactions and in every case my realtor was nails!  She was a tireless worker and went above and beyond for us as her clients – at times driving over an hour for showings.  She spent time getting to know us and exactly what we wanted and needed.  Unknowingly at the time, she became a real mentor on how to be a great realtor simply by exhibiting her professionalism, integrity, attention to detail, competence, and relationship building qualities.

Image result for stressful real estate process

Realtors have access to MLS and other marketing tools that help better understand the market.

Above all else, buying and selling real estate can be an extremely emotional process.  In most cases, your home is your most expensive asset, so of course there is going to be a lot of emotion involved.  And that’s the greatest quality of a stellar real estate agent – they will act as your unemotional representative throughout the real estate process.

It’s not like hiring representation to negotiate high-priced assets is exclusive to real estate.  This has proven to be good practice in many other industries.  Professional athletes almost unanimously hire agents to negotiate multi-million dollar contracts.  People entrust the responsibility of their own retirement, hundreds of thousands of dollars, to skilled financial advisors every day. Not doing so would be like playing high-stakes poker in Las Vegas after only having played a few dozen hands in your buddy’s man cave!

The fact of the matter is, FSBO’s need to assume the role of the realtor if they are not hiring one.  They have to accurately determine if the time and money it takes to sell solo is actually going to save money, and if it did, was it worth it.  Calculating incorrectly can be risky business.

Kind of like repairing the pressure washer…

Chris

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