Selling a home right now is challenging, to put it mildly. In your neighborhood, you’re likely to have seen a few homeowners waiting patiently for a buyer. You’ve also seen a few homes whose owners will have gone through two, three or even four real estate agents. You’ve also seen some homes start out as FSBO real estate and move to traditional listings, while other traditional listings convert to FSBO homes.
If sellers who are using a professional, full-time real estate agent can’t sell the homes they’ve listed, why even consider FSBO? Someday, each of the homes on the market right now in your neighborhood will sell. If you need to preserve the capital in your home, an FSBO sale may be the ideal solution to a number of value-based concerns.
The explanation of why a particular home sits on the market is unique to the homeowner’s situation. For each home it will be different. The sale price of the home is often a big culprit, especially in markets where the home value has actually dropped. Owners sometimes don’t want to accept the fact that their home has lost value. These owners are focused on how much money they will lose when the home sells. If you, as a FSBO seller, are realistic about your price – meaning, that you understand that property values in your neighborhood may have slowed, stopped or reversed, and that is reflected in your price, you’ll sell your home as long as you expose it to the market.
Sometimes, the current owner’s equity is small because he or she hasn’t owned the home for very long, and the cost of selling the home will erase what little equity has accumulated. If you’ve owned your home for only a short period of time – less than five years – you will only have a small amount of equity in your home. The go-go real estate market you bought in is gone. The growth in your equity will have been flat, or perhaps even negative in some markets. That fact alone is precisely why you can’t afford the “luxury” of hiring a real estate agent. Under these conditions, selling your home conventionally is going to take money out of your pocket.
Sometimes an owner is trying to cover the cost of repairs and upgrades that are out of line with comparable homes in the market. FSBO sales are ideal for this situation. If your renovations have made your home the most expensive in the neighborhood, you’ll benefit from an FSBO sale.
How? You’re less likely to find a buyer who will appreciate your investment, when they can buy a home with a similar layout (minus the upgrades) in the same neighborhood for less. If you’re realistic about your pricing and how you position your home as an FSBO property, you can turn this seeming disadvantage into an advantage and still recover much of the cost of your work. In this type of sale, your buyer will receive the value of your upgrades, and by eliminating the commissions on the sale of your home, you’ll salvage much more of your equity.
In these situations, FSBO sales should be considered first, and traditional real estate agencies should be looked at as a last resort.
