For Sale By Owner: Don’t Make These Mistakes

THINKING OF SELLING YOUR HOUSE ON YOUR OWN? 

A For Sale By Owner (FSBO) generally believes they will save money by selling their home themselves, instead of hiring a professional Listing Agent that will charge him a commission fee.  Unfortunately, this seller’s naivety about what an actual listing agent does is costing him both time AND money.

I first posted a picture of this DIY Home Seller almost two years ago… in October of 2016.

Not surprisingly, this home is STILL for sale.  In a real estate market such as Toronto’s, that’s virtually unheard of.  

Here’s the most common FSBO selling mistakes:

Mistake #1: No Real Estate Pricing Strategy

In this example, the seller’s pricing history looks like this:

June 2016: $3,999,000.

August 2016: $3,120,000

June 2017: $3,370,000.

July 2018: $2,975,000.

Its imperative that a seller set a competitive price from the get go.  A well-priced home generates interest and offers.  Most FSBOs are emotionally attached to their home and overvalue its worth because it’s their home.

A professional listing agent will complete a home assessment and create a plan to maximize it’s appeal and perception to buyers based on the current market.  They will research what is happening with comparable properties and order a home inspection report so that prospective buyers know what they’re buying.

Mistake #2: No Pre-Listing Preparation

He took the interior pictures himself, with his phone.

You only get one chance to make a first impression.  Pre-listing preparation means bringing your home to its full potential and does require effort. This can be one of the most common home selling mistakes by would-be home sellers. Most FSBO’s believe their home will sell itself, and often don’t want to put in the work to de-clutter, de-personalize, clean, and complete repairs.  

An experienced real estate agent knows a clean, clutter-free presentation makes your home shine to potential buyers.  Staging it makes it stand out among other listings, and helps buyers imagine living there.  It photographs better, tours better, and makes a more memorable impact.  

Mistake #3: No Real Estate Marketing Plan

He put out a home-made sign on his front yard, and then advertised on MLS as “a mere posting, reserved the right to sell the house himself, and offering $0 commission to Buyer’s Agent”.  TWO YEARS AGO.

Many FSBOs don’t realize that their home, like any product on the market, has a distinct and desirable target audience.

Professional real estate agents know who they are targeting and where to focus marketing energy and resources to find those buyers.  They know how to set up eye-catching signage, hire professional photographers, write compelling listing copy, launch digital and print promotional campaigns, manage strong showings, network with other agents and ensure the home receives maximum exposure. 

Mistake #4: Not Working With a Buyers Agent

Usually, the Buyer’s Agent shares the 5% commission that home sellers pay to their Listing Agent.  This FSBO is unwilling to pay any commission, so the potential Buyer Agent has little incentive to encourage the sale, and the FSBO effectively shuts out the largest pool of qualified buyers.  He’s his own worst enemy.

The likelihood of a prospective buyer shopping for a home in the neighbourhood of $3M without an agent is slim to none.

Other common home selling mistakes the FSBO is probably making? 

Mistake #5: Not Managing House Showings Properly

FSBO’s often host potential buyers by treating them as a guest and giving  “tours of their home” at their convenience.

This is one of the most common home selling mistakes! A Listing Agent knows that a potential buyer should actually feel like the home is already theirs.  Buyers feel more comfortable exploring, asking questions and commenting on features of the home if the seller is NOT home.

Mistake #6: Not Qualifying Buyers

FSBOs will waste a considerable amount of time hosting tours to unqualified buyers, lookie-loos, dreamers and others looking for an alternative purchase type situation (lease-to-own, etc).

Most potential buyers are reluctant to provide personal financial information to sellers directly, but those working with agents and lenders validate their qualifications ahead of time.

So the moral of the story?

Most owners are better off leaving the task of selling their home to an expert.  The right Listing Agent offers a comprehensive selling experience that meets your pricing and timing goals and ensures you won’t fall for some of the most common home selling mistakes. 

While many FSBOs think they will save 5% commission, an experienced real estate agent would have told this FSBO on Day 1 that his expectations were unreasonable.   A properly marketed Toronto home sells quickly, for top dollar and with no hassles.  Certainly the 5% commission is worth the two years this FSBO has endured and NOT sold his property?