To List or not To List?

Can you actually be losing money when you think you're saving money? Yes, and it typically happens because FSBO (For Sale By Owner) sellers unknowingly “leave money on the table”… equivalent to “giving it away”.

This unfortunate scenario can take many forms, but is frequently caused by sellers (a) having underestimated their property's value, and selling below fair market value (b) having overpriced their property and squandering time & money trying to find someone willing to pay above fair market value (which rarely happens), (c) not having access to massive pools of potential buyers via mechanisms like MLS (Multiple Listing Service), and Realtor ® referral networks, (d) lacking the marketing expertise and/or exposure mechanisms needed to let the world know you exist, or (e) lacking the necessary negotiation skills to establish the best possible contractual terms for all parties while obtaining the best possible price for the seller.

There are many more ways in which FSBO sellers have notoriously given their buyers “cash gifts” at closing, but suffice it to say that it's the rule rather than the exception, by far, and the sad part is that they usually don't even know it happened, or how much was sacrificed.

We've all heard stories about lucky homeowners placing a “For Sale” sign in the yard, opening their front door on a Sunday afternoon and receiving a full-price offer at the end of the day. If you're thinking of selling your home, you might be lured by these successful FSBO stories. After all, you reason, why pay commission to a Realtor®, when you could keep the profits all to yourself? But the reality of the FSBO process is far less rosy than you might think:
 

• Advertising works best when it's exposed over time. Most FSBO sellers, however, try to cut costs by running a single ad here and there, usually not often enough to attract the attention of many buyers. The Realtor®, on the other hand, advertises their listings often in print media, in electronic media, and in the MLS, which is only available to licensed Realtors® and brokers.   
  
  
• Most homeowners believe their house is worth more than it really is. Even if you study comparable homes and try to discern the value of yours, it's still a time-consuming process and an amateur's guess. If it's not competitively priced, many prospects will simply bypass your home. If you later lower the price, you'll have to advertise again, at more cost to you.
  
  
• Over the years, we can become accustomed to our home's imperfections, to the point where we're not really aware of them anymore. A Realtor® can see a house the way a prospective buyer would. He or she may suggest some minor improvements, like fresh paint, new flooring, some minor but very visible repairs, or furniture arrangements that could help your home sell faster and for more money.
  
  
• Realtors® will qualify prospects before showing them a home. A FSBO seller is at the mercy of everyone who calls or knocks on the door. You may spend valuable time giving free tours to curiosity seekers or prospects who cannot afford your house. Worse yet, you could be making yourself and your property vulnerable to possible hidden motives. This is not the place to convey such horror stories, but they are more commonplace than you might think.
  
  
• Prospects often shy away from FSBO homes. Some fear legal problems because of the intricate paperwork involved. Some may worry the seller is not disclosing everything about the home's condition. Others may simply feel uncomfortable negotiating directly with the owner. FSBO sellers face the same disclosure requirements as everyone else. Working directly with buyers (bypassing Realtors®) does not remove any obligations, risks or potential liability; the courts won't care whether you were a FSBO seller or not.
  

Many FSBO stories, unfortunately, don't have happy endings. After a considerable outlay of time and money, sellers over 80% list with an agent in order to get their house sold. Unless you have a sure buyer – a cousin or coworker, for instance – consider listing your house with an EXIT Realtor ® right away before it grows market-weary, and before you expend time & money that can never be recovered.