When you want to sell your property by yourself, without taking services of a real estate agent, such a property sale is termed as a ‘For Sale by Owner’ or FSBO property.
Though FSBO has advantages to it, you should also be aware of the many drawbacks that it can entail and this is applicable for both the sellers and the buyers. Let’s take a look at the negative aspect from both aspects.
As A Seller
As someone opting for FSBO, here is a look at things that can be a cause for concern here:
The FSBO property sale property is as such quite cumbersome – While you enjoy the freedom to work by yourself without the interference of a broker, you face an uphill task to sell your property on your own. You need to work a lot to make it possible – the research work, pricing your home, putting ads, screening applicants, conducting open houses, showing the property and so on. This, at all times, seems like heavy burden on your shoulders.
Emotional attachment: You have an emotional attachment with your property and value every small detail about it. This has perils of its own –
1. You tend to over-price the property
2. You tend to describe very minute details of your house to the irritation of the prospective buyer when you are showing your property to the latter.
Also, you find it very difficult to market your house as a product, to speak in that ‘marketing language’ which is required to satisfy buyers.
Lack of market, legal and financial know-how: Being the owner of a property and not a real estate broker, you fall short of the knowledge you need to possess to facilitate a house sale. Not only are you unaware of the market conditions, the prevailing prices, the prices of similar houses in your locality but also all the other legal and financial matters that go along with it.
Time consuming – A lot of information is available to you at the click of a button through the internet, but you don’t have the time to go through the huge web and also get utterly confused with the enormity. All this research work, the task of choosing where to place ads, how to place them, what to write and so on takes a lot of time. Investing that much time is difficult.
Limited exposure – If you avail the services of a real estate broker, your property gets more showings and a greater exposure than if you sell it by yourself.
Higher costs – Although you feel that by selling your home on your own, you can cut down on the costs the real estate broker would take for the purpose, you actually end up spending more! The advertisement costs are huge. Many real estate brokers include the costs in their services; you get it as a package. Also, you incur costs running around for placing ads, opening bank accounts, doing research and so on. Above all, is the cost of losing your peace of mind over the sale!
As A Buyer
You are attracted to an FSBO as in this case you are not required to pay the real estate’s commission. Here is a look at problem issues that you need to be aware of:
Unsure of the ownership: As a potential FSBO buyer, you are not sure about the ownership of the same. The person who has put up the house for sale might only partially own the house and the other owner might not actually be interested in selling it!
Unsure of the price: As FSBO houses are generally over-priced and there is no agent involved, you don’t know the market and are hence you are unaware of the ideal price of the property to help you bargain well.
Unaware of the faults: As the owner is putting his house for sale and values every little bit of it, he/she will not come out with the faults to the prospective buyer. This creates a difficulty as the latter is deprived of the right to know all the aspects before deciding to buy.
Unaware of technical details: The owner of an FSBO home isn’t aware of the exact measurements – the total area, the carpet area, dimensions of each room, section etc. Hence, he/she will not be able to provide you with details on the same!
Bereft of expert advice and help: A real estate owner’s job is facilitating the buying and selling of homes! He comes up with his expert advice from time to time which an FSBO home owner cannot provide! He can think about the property neutrally, without any bias and hence you can value the same. Also, a broker helps the buyer throughout the entire process including interpreting the agreement, handling registration details etc.