The Challenges of “For Sale by Owner”

“For Sale by Owner,” also known as FSBO, is a home-selling method in which the homeowners are not working with a real estate agent to help them sell their house. This is an extremely independent process which comes across as attractive to many, but needs to be approached with caution. Contrary to popular belief, homes that are FSBO often actually sell for much less than they could have, had there been an agent involved. This, along with several other factors, emphasize the importance of working with an agent when selling your home. 

The FSBO process comes across as relatively simple for first-time sellers. A typical FSBO process begins with the seller preparing the home to enter the market. This usually involves decluttering, depersonalizing, staging, and even extensive renovations in some cases. After this, it is imperative for the seller to carefully research the market, including doing detailed comparisons of their property with similar ones that are currently for sale, or that have sold. From this analysis, the property value is determined and the price is set; the listing can then be drafted with photos, descriptions, and home data. Listing locations include websites like Trulia and Zillow, dedicated FSBO sites, etc. (Brian Martucci). 

However, once all of these boxes are checked, the seller must be ready to negotiate, fill out various means of paperwork, and deal with an influx of texts and emails at even the most inconvenient times of day when communicating with the potential buyer or the buyer’s agent. Promoting and advertising the home can wind up being difficult and exhausting to determine the best and most effective methods. This can be a point in the process when the seller realizes the chances of their home selling properly and for the absolute value- are slim. The seller might have feelings that they are in too deep, or “bit off more than they can chew.” Why does this happen to the majority of sellers? If a successful FSBO is not always likely, what is the reality of the situation? 

First, let’s talk financial benefit. Of course, when you decide you want to sell your home, it is inevitable that your main priority is to sell it for as much money as you can. It is important to consider the level of experience you have in transactions and negotiations, which is likely much less than that of a respected and established agent. Pricing your home correctly is a daunting task that is often very difficult for the homeowner to do correctly. “While you will not have to pay a real estate agent, you are not likely to fetch as high a price for your home as you would if you worked with a professional” (Bill Gassett). This seems very counterintuitive, yet most homeowners lack the knowledge and skill on how to competitively price and negotiate the home based on all of its facts and features. Commission, too, is rarely eliminated completely with FSBOs; chances are you will still pay some sort of commission to the broker. Further, one of the major goals of a homeseller as their home sits on the market is to get multiple offers by several different parties. However, if it is placed on the market by the homeowner their self, it is likely that it lacks sufficient branding and advertising content without utilizing an established network. If only a few people are aware of the listing, it is very unlikely that the property will get more than a single offer (Bill Gassett); it will also very likely be a target for 

bargain shoppers. Stated simply, “Homeowners selling by themselves simply don’t have the time to devote to the process, don’t know the market value, don’t understand market reports and don’t properly market the property” (Chris Rediger). 

Another important aspect to consider in a FSBO situation is liability. Mistakes happen, especially in the process of marketing and listing a home to buyers. If a feature of the home is listed incorrectly, or another part of the buying and selling process is flagged for any sort of issue, the seller is the one responsible; they do not have the representation of a licensed real estate agent to fall back on, or to pay for their own mistakes. From a buyer’s perspective on this subject, scams are a real concern. If a seller incorrectly represents a property, and the buyer acts on a deal, they are at risk of being completely scammed on some elements of the deal; there is no licensed personnel supervising the process. “Common scams include fraudulent papers (appraisals, loan documentation), foreign buyer deposits (scammer sends too much in a bad check and then requests a refund), purchases through a third-party (a fake attorney, etc.) and asking for personal information” (Chris Rediger). The amount of research that needs to be done by both parties in a FSBO is extensive and extremely time consuming. 

It is clear that hiring an experienced, established agent is the key for a simple home-selling process. Our goal at Link NY Realty is just that-, “to link home sellers with home buyers, swiftly and with minimal stress” (Valon Nikci, Link NY Realty). We have access to all available properties in New York City, New York State, and Connecticut. We also move quickly and provide you, as a seller, a passionate and comprehensive experience. At Link NY Realty, we walk you through every step of the process, from the initial listing and pricing steps using a complementary, Competitive Market Analysis (CMA), to the marketing and final negotiating and closing deal details. Choosing an agency like Link not only saves you time and energy, but guarantees your home will be listed and sold for the very best value possible with a licensed, experienced team of professionals.