Are you considering selling your home without a real estate agent? Did you know that most house sales by owner fail?
A home sale by owners is not easy!
Choosing to go without a real estate agent usually ends in poor results. But why is that the case? Why is selling a house by the owner so challenging?
The standard driving force behind most for sale by owner homes (FSBO) is to save on paying a Real Estate commission.
Even though I’ve been a Realtor for nearly forty years, I can clearly understand a home seller’s motivation to save the money handed out in a typical sale.
Most people like to save money wherever they can, especially in a tough economy.
Keeping a commission on a real estate sale translates into tremendous money.
It is hard to blame any home seller for wanting to avoid the type of dollars made when a Realtor or real estate agent sells a home or condo.
While commission rates are negotiable, in most parts of Massachusetts, you will likely be paying a real estate commission between 4% and 6% on your property’s sale price if you sell a home.
On a $450,000 home, a commission of 5% is $22,500. There is no doubt that’s a lot of mullahs!
However, selling a property for sale by owner is not a simple task. It’s why most homeowners hire a Realtor.
Over my nearly forty year career, I’ve helped numerous for sale by owners sell their property. Many of the things I will discuss come from personal experience observing why they failed.
Why A Home Sale By Owners Usually Lack Success
Nationally, the success rate of a for-sale by owner (FSBO) is minimal. Over 90% of all FSBOs hire a Realtor after unsuccessfully trying on their own to get the job done.
Why is going the route of selling without a Realtor such an arduous task? There are many reasons why selling FSBO is challenging to pull off.
When you are done reading, you will understand why most for sale by owners fail. You will want to come back and read how to sell your property for sale by owner. You will discover tips that will at least give you a fighting chance.
There are indeed advantages and disadvantages of a home sale by owners. Before making a final decision, you should know the drawbacks and try to minimize them.
The Wrong Listing Price
Most for-sale by-owner properties fail to sell because of an incorrect list price. I don’t care whether you have listed your home with a Realtor or have decided to sell your house by owner.
If you don’t price your home correctly, you stand a very slim chance of it selling, whether in a challenging Real Estate market or not.
Pricing a home accurately is the most critical element when selling any product, especially when discussing a home sale.
From being in the business this is the number one thing that stops houses from selling.
Over 75% of the marketing of a home is about setting a realistic sale price.
Homes listed with a Realtor and overpriced have a slight chance of selling. Overpricing as a Massachusetts for sale by owner (FSBO) makes it almost impossible!
Numerous Massachusetts for sale by owners seem to either do their market research and end up choosing the wrong price or have a Realtor help them determine the property value and ignore their advice.
If more homes for sale by owners were priced based on comparable market data, there would be a much higher success rate.
More thorough research into what homes in similar neighborhoods are selling for would go a long way!
Often, people want more money for their homes because they have made some recent improvements. Unfortunately, many projects for the house do not have a high return.
For example, if you replaced a roof, a septic system, or added a pool, don’t expect to see much payback on the money you invested.
Without question, improper pricing is the #1 reason Massachusetts for sale by owners fail to sell their homes!
Lack Of Online Real Estate Exposure
Another leading cause of a house sale by owners to be unsuccessful is lack of internet marketing! Over 95 percent of all conventional sales happen because of the Internet!
It’s easy to understand why homes for sale by owner would fail without online exposure.
Quite a few for sale by owners do nothing more than put up a handmade for sale by owner sign on the front lawn and expect that will get the job done.
Then others think that going on one of the house sales by owner sites like I sold my house.com, for sale by owner.com, or buy owner.com will bring lots of home buyers. Sorry, that’s not the case!
These FOR SALE BY OWNER Real Estate sites bring an insignificant amount of buyer traffic compared to the places some of the top web-savvy Realtors use to promote their homes.
The for-sale-by-owner websites say, “We will give you worldwide exposure and save you thousands of dollars!”
For sale by owner websites having a solid search position could not be further from the truth.
No Online Exposure
Just go to Google or any other major search engine and type in a local search with Real Estate keywords a buyer would commonly do an online search.
Search for your town, state, and homes for sale or Real Estate. Using a local town in my area as an example would be Hopkinton, MA, Homes for sale.
Do you think a for sale by owner Real Estate site will come up in the results? If you guessed yes, try again! Go ahead and see what happens with your town or city.
The results will be dominated by sites that show homes listed by Realtors or even a Real Estate agent’s website if they are online savvy. These FSBO sites promise the world and often deliver empty promises.
A Realtor with a firm grasp of online exposure can increase the traffic going through a home by leaps and bounds compared to a for-sale-by-owner site. You must be on the best websites for home buyers.
Please review the Metrowest Massachusetts Real Estate marketing provided to all my seller clients. There is no comparison of what this kind of online exposure can do versus a for-sale-by-owner website.
The fact is that thousands of buyers will not even know an FSBO home is for sale.
If you are a Massachusetts for sale by owner and are unsuccessful, a lack of marketing could be another reason your efforts fail.
Lack of Quality Photography
Poor marketing and lack of professional photos go hand in hand.
One crucial aspect that can make or break a deal is the quality of the photography used in the listing. For sale by owners (FSBO) often fail in this regard. FSBOs often lack the expertise and resources to capture professional-looking photographs.
Without appealing visuals, potential buyers may quickly lose interest and move on to other listings. Good photography is essential for attracting attention, creating a positive first impression, and showcasing the property’s best features.
Professional photography can significantly enhance the visual appeal of a property. Skilled photographers understand how to capture the best angles, lighting, and composition to make a space look its absolute best. They can highlight the property’s unique selling points, such as spacious rooms, stunning views, or beautiful architectural details.
Without professional expertise, FSBO sellers may struggle to showcase these features effectively. It results in lackluster photographs that fail to capture buyers’ attention.
Your First Showings Are The Online Photos
Moreover, quality photography helps create a positive first impression for potential buyers. In today’s digital age, where most home searchers begin their search online, high-quality images are crucial for grabbing attention.
Buyers are likelier to click on listings with captivating photos as they instantly convey the property’s attractiveness and potential. Without professional photography, FSBO listings may struggle to stand out. The lack of effort makes it harder for sellers to generate interest and secure viewings.
Buyers Can Visualize Living in The Home
Lastly, good photography helps buyers visualize themselves in the property. When browsing listings, potential buyers want to imagine how they would live in the space. Will it meet their needs and preferences?
High-quality photos give buyers a clear sense of the property’s layout, size, and overall ambiance. On the other hand, poorly shot images can make the space look cramped, unappealing, or misleading.
FSBO sellers who fail to invest in good photography may struggle to convey the full potential of their property. It leads to missed opportunities and a longer time on the market.
Some real estate agents will provide virtual staging to enhance the experience even more.
Buyer’s Want Your Commission Savings
Most folks who try the for sale by owner route don’t realize that the home buyers who view the property understand you are not paying a Real Estate agent to sell the home. Unfortunately, most of these customers feel they should share in your Realtor commission savings!
Many potential buyers who will be viewed for sale by owner homes are bargain hunters. The reasoning is that since the seller is not paying a Real Estate Commission, they should offer less for the home.
Lots of sellers end up receiving low-ball offers. Buyers will often take 5% right off the top regardless of whether the home is priced well or not. Many Massachusetts for sale by owners learn this the hard way.
Failing to Prepare The Home For The Market
For home sales by owner, preparation is vital. Unfortunately, many home sellers fail to recognize the importance of properly preparing their homes for the market. This can ultimately lead to their homes sitting on the market for extended periods or even failing to sell altogether.
To avoid these pitfalls, sellers must take the necessary steps to ensure their homes are market-ready.
One common mistake that sellers make is neglecting to declutter and depersonalize their homes. Potential buyers want to be able to envision themselves living in the space. Therefore, it is essential to create a neutral and inviting atmosphere.
Removing personal photos, excessive knick-knacks, and other items that may distract or overwhelm buyers is all part of good staging tactics.
Additionally, decluttering will make rooms appear more spacious and organized, which is always a selling point.
Decluttering, Repairs, and Updates Make a Difference
Another aspect of preparation that sellers often overlook is making necessary repairs and updates. Many FSBOs don’t know what to fix or what not to fix. Buyers are typically looking for move-in-ready homes, so it is crucial to address any issues that may be present. This could include fixing leaky faucets, repairing cracked tiles, or repainting walls with neutral colors.
Updating outdated fixtures or appliances can also greatly enhance the appeal of a home. By taking care of these repairs and updates beforehand, sellers can avoid potential buyer objections and increase their chances of a successful sale.
Unfortunately, selling as is can be a problem that many FSBOs overlook.
Staging can also significantly affect how potential buyers perceive a home. By strategically arranging furniture and decor, sellers can highlight their home’s best features and create a welcoming and attractive environment.
Accessing The Home is Challenging
If you are selling your home as a for sale by owner property, you may find getting people through the door can be difficult.
Most for-sale owners forget that homebuyers can come at all hours of the day to see a property.
A home buyer in the market who is looking to find a home will not want to wait for days to see it because a seller cannot accommodate their schedule.
Often, when a FSBO is trying to sell a home, they must find the time to let a buyer gain access. Sometimes this is not always easy, especially for full-time employees.
It is tough to sell a home when buyers cannot get in and see it!
From experience in talking to FSBOs over the years, many do not realize they have to be flexible or will loose the opportunity to capture a buyer.
While selling a home on your own can save you money on agent fees, it also comes with challenges that can hinder the selling process.
Missed Showings Are Missed Opportunities
It must be readily available for potential buyers to view. Real estate agents have the advantage of being able to schedule and coordinate showings efficiently, ensuring that interested buyers can access the property at their convenience.
On the other hand, FSBO sellers may face difficulties being available to show the property due to their personal commitments or work obligations.
This lack of availability can be frustrating for potential buyers. Many home buyers may have limited time to view properties and might move on to other listings that are more accessible.
Furthermore, FSBO sellers may lack the resources or flexibility to accommodate last-minute viewing requests. Real estate agents have established relationships with other professionals in the industry. For example, photographers and stagers can quickly prepare a property for showings.
Additionally, agents can utilize various marketing strategies to attract potential buyers and create a sense of urgency. On the other hand, FSBO sellers often have limited access to these resources. They may struggle to market their property or respond promptly to inquiries effectively.
Lack of Negotiation Skills Leads to Failing
Another factor contributing to the failure of FSBO listings is the lack of experience and expertise in negotiating and dealing with potential buyers.
Real estate agents deeply understand the market, pricing strategies, and the art of negotiation. They can skillfully handle offers and counteroffers and navigate through complex transactions on behalf of their clients.
Negotiation is a critical aspect of the home selling process. Without the expertise and experience of a Realtor, homeowners may find themselves at a significant disadvantage.
One of the critical reasons why FSBOs struggle with negotiations is their limited knowledge of the real estate market. Real estate agents have an in-depth understanding of market trends, comparable sales, and the intricacies of local neighborhoods.
This knowledge allows them to price a property and negotiate effectively and accurately with potential buyers. In contrast, FSBOs often rely on online valuation tools or personal opinions. The result is overpricing or underpricing of the property, leading to negotiation difficulties.
Realtors Remain Objective
Another important aspect where Realtors excel is their ability to remain objective during negotiations. Selling a home can be an emotional process for homeowners. More so when they have lived in the property for a significant amount of time or have personal memories attached to it.
These emotions can cloud judgment and hinder effective negotiation. For example, these skills come in handy when negotiating a home inspection.
On the other hand, Realtors have the necessary distance and objectivity to navigate negotiations without being swayed by personal feelings. They can focus on the facts, market demand, and other relevant factors to secure the best deal for their clients.
Additionally, Realtors possess excellent communication and interpersonal skills crucial in negotiations. They can effectively convey their client’s needs and desires to potential buyers.
Realtors understand the art of persuasion. Skilled agents know how to present offers and counteroffers in a way that increases the chances of a successful outcome.
They are skilled at handling difficult situations, resolving conflicts, and finding common ground between buyers and sellers. These negotiation skills are honed through experience and training, making Realtors invaluable during home selling.
Not Being Able to Assess a Buyer’s Financial Qualifications
A Realtor’s job makes this part of the home sale process much smoother. The last factor a house sale owner needs to be aware of is their ability to make sure they know how to qualify potential buyers.
There is no point in having unqualified buyers going through a home. A Realtor also takes on the task of making sure a buyer has the necessary ability to purchase.
Most buyers who view homes today are pre-approved. As an FSBO, you must ensure this holds when a buyer sees your home.
Selling a home for sale by the owner is a great feeling if you can pull it off! It is certainly not impossible, but knowing it will not be possible unless you sell it under its market value. This would defeat the purpose!
Above all else, remember that accurately pricing the home and market exposure are vital to your success.
For sale by owners lack success for all of the reasons mentioned, some of which are hard to overcome.
How FSBO Failure Can Sting The Most
When real estate markets are hot, more FSBOs think they can have success. Why can’t I throw a sign out on the lawn and get someone to know on my door or call me? Having a potential buyer contact you isn’t the biggest problem you’ll face. This may happen.
Where you lose out when going for sale by owner is the chance of receiving multiple bids. In hot seller markets, it is not uncommon for sellers to find themselves in a bidding war.
What happens when multiple buyers do whatever they can to land your home? You would be correct if you’re considering extra money in your pocket!
Multiple Buyers Bring in Offers Over The Asking Price!
Bidding wars bring offers well over the asking price. By going FSBO, you can kiss that opportunity goodbye. You will not be seeing buyers fighting over your house.
Failing to sell as a for sale by the owner is not uncommon at all. You may not realize the opportunity to earn more money by hiring a top-producing real estate agent.
Final Thoughts
If you are a Massachusetts for sale by owner and need a Realtor’s help, I would welcome the chance to be interviewed. I guarantee you will say goodbye to home sale failure!
About the Author: Bill Gassett, a nationally recognized leader in his field, provided information on home sales by owners who usually fail. He is an expert in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications he has been featured in. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 38+ years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
Well put Bill. This is so true. We are also finding many home owners in the Flathead Valley here in northwest Montana are going the for sale by owner route and finding it’s not all it’s cracked up to be. You make some great points regarding pricing and availability to show the home. With all of the great marketing avenues available to Realtors, sellers will find that the money they may be giving up at closing is well worth it if they consider the time value of money. Better to have 95% of something then 0% of nothing!
Thanks for the compliments Cherie. You make a great point about having a sale and paying a commission is better than have no sale all. Many sellers figure this out at some point after they have tried it on their own unsuccessfully.
Great info, Bill. There is so much more to selling a home than showing it. I currently have 2 closings that have been in process for months. Both have required huge amounts of time and focus in helping lawyers, town inspectors, abutters, and the buyers and sellers.
Of course there are “I sold my house myself,” stories. However they are like lottery winners – you hear the stories, but there are few people who are winners, and it is even hard to find someone who actually knows a winner first hand. The stories are most often third, or fourth hand at best.
We have recently helped sellers understand things about their property that they didn’t even know. With all the foreclosures, hiring a real estate professional can be even more important to make sure the procedures in the foreclosure process were correct. (Ask Martha Coakley).
I understand wanting to sell FSBO, but wanting and completing are two different things.
Best wishes, Bill.
i think most people fail because they do need a bit of help from an agent. the problem is that these days many people do not have enough equity in their homes to pay a traditional 6% agent!
At http://www.usrealty.com we let people sell for a commission that ranges from 0% to 3%.
It actually works
Great blog Bill. As a real estate professional in the Austin Texas area I see many people trying to sell their own home. Why? Many think they are saving money and some people do successful for sale by owners. But the odds are very slim and most FSBO’s end up being taken to the cleaners because they don’t have the knowledge or experience.
I also see limited brokerage agents. They will in some cases for a flat fee will put a lock box on the door, sign in the yard and list the home on the MLS then disappear. Many people think they will be saving commissions by hiring a limited brokerage company. My first sale in real estate was with a discount brokerage. I charged the seller to do what his agent should have done. The seller an investor was upset I charged the fees. He said he wouldn’t be making any money on the deal. I informed him that it was not my problem.
When my automobile breaks it goes to a mechanic who I gladly pay to repair it. I do not have the experience or knowledge to do auto repairs. The same if I am having medical problems I see a medical doctor. So why wouldn’t someone hire a reputable real estate agent/broker?
Bill first I want to tell you that your new site looks great.
You certainly covered the major issues why FSBO fail to sell. Going it alone can be so stressful and the photo you used conveyed that. Based on your track record I would suggest Metrowest Ma FSBO give you a call.
Thanks Jennifer my new Real Estate site is a work in progress but in no time it will be a dominant force:) Thanks for you compliment on why most for sale by owners fail.
Attempting to sell your home FSBO is a very difficult task, and gets even more difficult if the homeowner is under a time crunch. So many factors go into getting a home seen and sold, that is why using a good Realtor is a key component of selling a home in today’s real estate climate.
It can be expensive being cheap is a mantra worth remembering on a FSBO marketing choice.
Cheryl the ironic thing about many for sale by owners is that they will end up selling for 10% less just to save a 5% commission. Many often times miss the big picture.
Selling a home takes a lot of research on pricing the home properly. For sale by owner’s usually don’t have the tools that Realtors have and end up pricing the home wrong. Also, FSBO homes sell for less than homes sold by Realtors. That is a fact. It is always better to hire a Realtor to sell a home.
Did you know that in 2011 the Founder of forsalebyowner.com, Colby Sambratto, tried to sell his New York Condo on his own. After 6 unsuccessful months he ended up hiring a Real Estate Agent who not only got the condo sold but was able to get it sold for $150,000 over the original asking price! True Story!
Courney – I sure did know. I read that For sale by owner story of course with great interest. It is pretty amazing when these type of FSBO companies try to sell consumers on the fact there online exposure is just like a Realtors. What a bunch of crap!
Hey Bill, Yes it is true, A Realtor can sell the house sometimes faster then For Sale by Owner. Also its the location that matters. I experienced both. One I sold with a small sign in a matter of days in a high traffic area and the other in a very low traffic area it took 6 months It helps if your not deep in debt also.
Super smart article, Bill. You are right on. Most don’t realize that by trying to save money, they are actually reducing the price they get…and just spending a lot of time to do something that a professional can do much better. An agent will make things easier, faster and help you negotiate.
also, I love your last line on here.
Debbie there are time when a FSBO will be fortunate and sell their home but the majority of the time they end up listing with a Realtor. Like any other industry it makes sense to hire a pro!