Sellers may be tempted to sell their own home in order to avoid paying agent commission, especially in a hot market with low inventory and high prices, where the assumption is that houses practically sell themselves. However, many FSBOs find selling much harder than anticipated. Below are the top reasons FSBO fails:
FSBOs don’t usually have a good sense of the market and how their property compares to others for sale or recently sold. Therefore, they end up pricing according to what they want instead of what is in line with market values.
- Lack of Marketing
Marketing is more than just placing a sign in the yard and listing a property on Zillow. FSBOs may not understand the importance of preparing a listing for sale and how everything from staging, photos, descriptions, advertising, and so much more play a critical role in garnering interest in a property.
- Limited Showings
FSBOs lack a showing system in order to coordinate access to the property and often want to sell on their schedule. Delays in responding to inquiries to schedule showings will often lead to missed opportunities.
- Dealing with Inquiries
Agents know how to vet inquiries and identify serious buyers who are motivated and financially able to move forward. A FSBO, on the other hand, may have trouble identifying a looky-loo from a real buyer and may lose prospects altogether by not knowing when and how to follow up.
- Negotiating with Buyers
FSBOs will likely not know how to negotiate the best outcome and may end up leaving money on the table or end up with unfavorable terms.
- Unrealistic Expectations
FSBOs may have unrealistic expectations about the selling process because they lack the experience and knowledge of an agent. They may think that they can do it all and don’t need to cooperate with buyer’s agents in order to try to save even more money. When buyers don’t come running, they are often perplexed as to why.
- Agent Avoidance
FSBOs that are willing to cooperate with a buyer’s agent can often have a false sense that the agent will bring the buyer and do all the work. They will rely on the agent for direction and advice. However, in reality, agents don’t want to do double the work and take on additional liability for half the pay. Agents know that these kinds of sellers don’t have a good understanding of the process and may not comply with contractual requirements and timelines.