Listing your home as a For Sale by Owner isn’t as easy as you think. The main goal of every For Sale by Owner (FSBO), is to sell their home for the highest dollar amount without paying a commission to a Realtor. On the surface, this seems logical and a financially prudent thing to do. But, for those who are struggling to sell, these are the Top 5 Reasons why your home is not selling.
1) PRICE. Take a look at the cartoon caption above, to see how people will view your home. This is the most accurate explanation of perceived home value. It is difficult to be objective in determining a list price, because the majority of Sellers will increase their list price because of a replacement cost, upgrade costs and/or sentimental value. It is difficult for Sellers to understand, replacement costs (new roof, new HVAC, new appliances) add little value. Home upgrade costs rarely provide 100% return of investment. Sentiment has zero value.
2) PHOTOS. I can immediately identify a FSBO online by the poor photo quality. This is not a point and shoot type of photography. Photo’s can either make or break a buyers first online impression and subsequent interest of the home.
3) STAGING. If your home isn’t staged and decluttered to enhance size and functionality of rooms and closets, then you are throwing away big $$.
4) RESTRICTED SHOWING TIMES. The majority of sellers don’t have flexibility for private showings. Qualifying potential buyers is difficult because you want as many people as possible to see your home. Identifying a qualified buyer vs “tire kickers’ can be overwhelming and often brings anger and frustration when buyers don’t show up for their scheduled appointments.
5) NEGOTIATIONS. Negotiating an offer requires expert knowledge about the current real estate market. Expert knowledge involves knowing all the comparable homes that have sold and are currently listed (interior details), sold information of comparable homes (arm’s length transaction, fire sale, job transfer, etc. that affects appraised value), economic conditions (past and future), accurate financial posturing by the buyer, etc. Once you go into contract, then what? If you don’t know the next several steps required by both Buyer and Seller, the deal will more than likely fall apart. Once it does fall apart, you get to start all over again. (Question: When does a Seller get to keep the earnest money deposit?)
The majority of For Sale by Owner properties, sell for less money and can take longer time to sell. The worst thing you can do as a For Sale by Owner? Not being a serious seller. Often, I see For Sale by Owners “testing” the market by overpricing their home to entice that one unrepresented buyer who is willing to pay more than market value for their home. Yep…. That doesn’t work.
To learn more about Earnest Money Deposits and when a Seller gets to keep the money, click HERE