5 Common Mistakes the Central Coast FSBO Seller Can Avoid
As a former FSBO seller turned real estate agent, I feel a certain an affinity for FSBO sellers. I bought my first piece of property from a FSBO seller and two years later, I sold that same condo the same way I bought it: FSBO. I then sold my next two properties without listing on the MLS, by offering a broker co-op to buyer’s agents. I learned a lot from those experiences, and also my subsequent experience as a real estate broker. I am not anti-FSBO, and feel that I can offer some fair and honest criticism of FSBO sellers, as well as point out some common mistakes they make:
1) Overpricing. If I could make this numbers 1 through 5, I think I would. This is the most common criticism of FSBOs, and I must admit I think it to be a valid one. Buyers and agents routinely remark that FSBOs are overpriced. Buyers believe that the FSBO seller is trying to save money, so they are often mystified when the FSBO seller is asking MORE than everyone else. It doesn’t paint a pretty picture for them. One of the best parts of having an agent is having an objective person for an opinion about your list price. Indeed, it may be difficult for you to see past all the money you’ve put into a home and realize that the market will not reward it. FSBO sellers must be vigilant in their efforts to avoid overpricing in order to successfully sell their home.
2) Not Offering a Broker Co-op. I know this is seen as a compromise by some. However, the last two homes I sold FSBO, I offered and paid a broker co-op for the buyer’s agent. I felt this widened my pool of buyers to more serious buyers. I believed then, and still believe, that serious buyers more often than not get an agent. In fact, the plethora of internet information makes having an agent even more important. There is a ton of inaccurate and outdated information out there on the web. As a consequence, when buyers get serious and want to buy a house that is actually available, many find the best way to do that is to get an agent. Later, if they find a FSBO that will work with their agent, it will often raise their comfort level with entering into the transaction.
3) Being present for showings/talking too much. There are so many reasons to avoid this, but of course it is difficult when you are a FSBO. More than likely, you will need to be there for showings and talking can be irresistible. Even if you sell for a living and know better, it is just so tempting to point out everything that is great about your house. I still remember how horrible the first FSBO sellers were at selling me their condo. They pointed out absolutely everything to me that I could care less about and that I disliked. It was also incredibly boring and I felt obliged to be polite. They were very nice people, but I didn’t give a hoot about anything they told me about the place. In fact, if I hadn’t been absolutely determined to buy that place, I would never have contacted them again. Basically, they simply got lucky.
4) Not considering whether it is a FSBO type of market. I don’t believe I could repeat my own FSBO selling successes in the current market. And, the first property I purchased from a FSBO seller was overpriced. I knew it. I also knew the market was going up at the time, so I was willing to take that risk. However, in a declining or flat market would I have bothered to even look at that property? Probably not once I heard the price. And even if priced correctly, I do believe that a FSBO will take longer to sell. One of the biggest myths in trying to go FSBO is thinking that it won’t cost you to try. As a FSBO in a difficult market, it is very easy to end up riding the market down – so the opportunity cost can be pretty heavy. You should be prepared for that risk.
5) Thinking the paperwork is no big deal. It’s not. California Realtors® have an entire staff of attorneys whose job it is to create forms and disclosures to protect sellers and inform buyers of potential risks. These disclosures are not available at an office supply store or at an escrow/title company. I am by no means attempting to scare someone into using a Realtor®. However, I am saying this because I know, first hand, that the standard disclosures that Realtors® have access to are very extensive compared to what is available in a “sell your home yourself” disclosure packet kit. Buying and selling a home is a big deal in California and the paperwork is a big part of that.
If you want to sell your home FSBO and are interested in receiving a comparative market analysis of your home, I can provide this to you. If you are offering a broker co-op, I would also appreciate the opportunity to preview your home. I will gladly provide a comparative market analysis without you having to endure a listing presentation – just let me know up front that you are a FSBO seller. I can be reached at my office at (805) 938-9950 or via email at tni@mintprop.com .
Tni LeBlanc is an independent Real Estate Broker, Attorney, Short Sale Agent and Certified Distressed Property Expert (CDPE) serving the Santa Maria, Orcutt and Five Cities area of the Central Coast of California.
*Nothing in this article is intended to solicit listings currently under contract with another broker. This article offers no legal or tax advice and is for information purposes only. Those considering a short sale are advised to consult with their own attorney for legal advice, and their tax professional for tax advice prior to entering into a short sale listing agreement. Mint Properties is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
Copyright © 2011 Tni LeBlanc *5 Common Mistakes the Central Coast FSBO Seller Can Avoid*
