The National Association of Realtors, which tends to give accurate statistics, has gone off the rails with a new factoid. Mobile homes are likely to be sold in the same way as used cars. In fact, manufactured homes are six times more likely to be sold than FSBO homes. The truth? There’s no clear answer to that question, but there are a few possible explanations.
FSBOs Don’t Have the Marketing Skills
One of the biggest advantages of hiring a Flat Fee realtor is their experience and expertise. The biggest downside of selling a home without a realtor is the time and money that go into the process. While technology helps speed up the process, realtors have a vast network of buyers. And they will be more likely to sell your home in a shorter amount of time. And they can help you price your home correctly and stage it, two things that FSBOs lack.
While FSBOs can sell a home for less than a realtor, their efforts may be worthless if they don’t price it correctly. Almost 9 percent of FSBOs have trouble determining the correct price. This is largely due to emotional attachment and a lack of marketing skills. They rely on the listing prices of other homes, which are often “active,” not recently-sold ones. This is problematic because FSBOs’ subjective opinions will make it harder to accurately price their home.
They Don’t Know the Buyer
Many FSBOs aren’t experienced with the paperwork involved in selling a home. That means they may not have good phone skills or be willing to answer showing requests. Plus, many don’t have the emotional attachment to their homes to deal with any potential buyers. A realtor can negotiate better terms on your behalf without this emotional attachment. Many FSBOs also overprice their homes, reducing their chances of selling a home.
A big reason why FSBOs have a harder time selling their homes is because they don’t know the market. While this can be a real hindrance to getting a sale, it may be a necessary evil. A real estate agent will be able to screen buyers and supervise showings to make sure they are serious about buying a home. In addition to knowing the market and the potential buyer, an agent can provide the seller with a mortgage pre-approval letter and a pre-qualification letter to guarantee they are not dealing with a scam.
They Don’t Take into Account Unique Aspects of the Home
FSBO sales aren’t very profitable for sellers because nearly half don’t market their homes. This lack of marketing means that these sellers have less involvement in finding a buyer than those who use an agent. While many FSBO sellers have already found a buyer, only about a third of FSBO sellers are aware of potential buyers. The FSBO sellers rely more on traditional marketing techniques to market their home.
While real estate agents screen potential buyers and supervise home showings, FSBO sellers must be aware of potential problems. While real estate agents protect sellers from losing money, they can also expose themselves to liability for mistakes. Besides ensuring that their time and money aren’t wasted, agents also make sure that buyers are serious enough to purchase the home. Before you list the home for sale, make sure you have a mortgage pre-approval letter or pre-qualification letter from a lender.
They Don’t Have the Network of Interested Buyers
FSBOs don’t have the same marketing techniques or network of interested buyers that a real estate agent does. In addition to this, FSBOs are not trained to ask qualifying questions, which a real estate agent does. This training helps move prospective buyers to the closing table. This advantage is especially valuable for FSBOs who may not be able to make these connections on their own.
Another disadvantage to FSBOs is that they don’t have the time or resources to market their homes. In addition, 42 percent of FSBOs rely on a yard sign, 15 percent use social media, and only a few use their own networks. In addition, FSBOs don’t have the incentive to attract buyers and may be nickeled into big chunks of change.
They Don’t Price their Home in Line With the Market
Many FSBO sellers don’t price their homes competitively in the market. A recent survey by real estate analytic company Collateral Analytics revealed that nearly half of would-be sellers do not actively market their home. Additionally, nearly 60% of sellers who were aware of a potential buyer didn’t actively market their home. These figures point to the importance of price adjustments to appeal to prospective realtor buyers.
Pricing your home too high or too low is a common mistake made by FSBO sellers. The average FSBO seller underpriced their home by more than 50%. This is a risky approach, since it can lead to costly mistakes. Pricing your home too high or too low can lead to a buyer’s dissatisfaction. It is also likely that FSBO sellers will not have sufficient experience to negotiate for the highest price.