FSBOThe principal reason some home owners decide to sell their own house is the savings on the commissions.  However, the risks can out  the risks associated with a FSBO (For Sale By Owner).

1) Pricing:  How will you determine the list price without the help of an experienced agent or broker?  If you over-price the property, it will stay on the market and will not generate any interest and if you under-price it you might lose more money than your commission savings.

2) Marketing Channel:  MLS still remains a the best marketing channel for selling residential homes.  In fact, homes listed on MLS are selling at 97% of the list price.   But if you do not have a cooperating broker, your home will not be listed on MLS which will limit the number of buyers that will find your property.

3) Qualifying Buyers:  Unless you know how to interpret credit reports, you might not be able to screen and find qualified buyers.  How will know if a buyer is pre-qualified vs pre-approved.

4) Disclosures:  California Civil Code requires that any material information about the condition of the property to be disclosed by the seller.  If the seller is unable and willing to disclose the problems associated with the property, the buyer has up to 5 years to file a law suit for recovery of fees and commissions along with damages.  Even simple task of determining if a room can be advertised and marketed as a Bedroom can be a source of friction and challenge.

5) Lack of Experience:  Odds are that selling homes is not your full time job, so you will lack all the experience necessary to negotiate all the contract details of your largest financial transaction!   How will you know which offers are worth countering ?!  How will you negotiate the terms of the contract?

6) Contingencies:   Real Estate transactions often involve contingencies which could derail any transactions.  Working with experienced agents can help you understand which one’s are legitimate concerns of the buyers and which one’s are simply there to offer the buyer the option to walk away. Odds are that the buyer’s inspection will discover some repairs and condition that they might want you (seller) to pay for it?  How will you handle request for credit on the problems discovered during inspection?  Given some repairs could take a long time to complete, this kind of terms could derail and jeopardize your transactions.

Given all the risks associated with a FSBO translations, it might be wise to use a Realtor but negotiate a better commission schedule.  In fact, we have a 1% commission program that can help you sell your home without taking any risk.

Contact Us if you would like to know more about our 1% program.


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