By
Marcie Geffner
Granted,
some people are able to sell their own homes without the services of a real
estate agent. Some of these successful do-it-yourselfers are very experienced
home sellers. Others are transferring ownership of their home to a child, a
coworker or a tenant who's already living in the home. These circumstances are
the exception, not the norm, however. For most people, a for-sale-by-owner
(FSBO) transaction simply isn't in the cards. Here are five reasons why.
1.
FSBOs can't list their home in the MLS. FSBOs aren't permitted to put
their home in the multiple listing service (MLS) because these industry membership
organizations are open only to licensed real estate brokers and agents. FSBOs
are also locked out of many home search engines and Web sites, including the
gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or
her front yard and run a tiny advertisement in the local newspaper, but the
home won't receive nearly as much exposure as it would through the MLS.
2.
Agents won't show FSBO homes. In a typical home sale, the
buyer's agent receives a percentage of the commission that the seller pays the
listing agent. Without a listing agreement, there's no guarantee that the
buyer's agent will be compensated for his or her services, unless the buyer has
signed a buyer's brokerage agreement that specifically provides for such
compensation. Even if a FSBO offers to pay the buyer's side of the commission,
most agents won't want to go through a transaction with an unsophisticated
self-represented seller across the table. That means the pool of potential
buyers for FSBO homes is limited primarily to unrepresented and probably
unqualified prospects.
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3.
FSBOs usually overprice their home. Like most homeowners, most
FSBOs honestly believe their own home is worth more than comparable homes in
the same neighborhood. Usually, they're wrong. A real estate agent can provide
an update on market conditions, an assessment of the likely selling price of
the home and tips for improving the home's buyer appeal. Overpricing a for-sale
home is a sure way to deter potential buyers.
4.
Buyers will feel intimidated. Potential buyers will spend
less time in a for-sale home if the owner is present during the showing, and
they'll be shy about discussing its pluses and minuses with their own agent if
the owner is within earshot. Buyers will also be less inclined to make an offer
if they know they'll be negotiating directly with the seller. Having an agent
on each side creates an effective emotional buffer between the seller and
buyer.
5.
FSBOs are likely to stumble into legal trouble. Real
estate transactions are fraught with potential liability for unwary sellers,
particularly in states that have extensive disclosure requirements (e.g., California ). A FSBO who
overlooks even one required form or legally mandated disclosure could face a
protracted and expensive buyer lawsuit after the transaction closes.
Copyright
© 2000 Marcie Geffner. All rights reserved.