For sale by owner (FSBO) home sales may seem like a great way to sell a home without paying a real estate professional. However, the process of doing so is rather complex, time-consuming and it takes a good eye for detail to succeed. Unfortunately, many homeowners go into this process somewhat too eagerly and ill prepared. Here are some potential dangers of a FSBO home sale.
Attention to detail is highly important in a for sale by owner situation. The home selling process requires dozens of documents to be accurately completed and submitted to the appropriate parties, often under strict deadlines. Home selling restrictions and regulations will vary between states, counties and even certain districts, which increases the chances of making critical errors.
A single missing document or failing to meet one deadline can cause a home selling contract to fall apart quickly. Furthermore, errors within the paperwork can be costly. Not only can it effect the bottom line overall, but mistakes could actually leave the home seller open to litigation in the future depending on the error.
Incorrect Property Valuation
Quite a bit of research goes into determining how much a property is worth. Location, home size, amenities, neighborhood comparisons, current market conditions and many other factors must be considered when deciding how much is a realistic asking price for a property. Experienced real estate agents have the tools and industry insider knowledge to help sellers calculate value—knowledge sellers won't have in a FSBO situation.
FSBO Consumes Time
Retirees or those with a lot of free time on their hands may not find FSBO to be as cumbersome as those who work full time or have busy schedules. Remember, there are paperwork and inspection time frames to be mindful of when selling a home. There is also the need to locate buyers, pre-screen them for mortgage approval, and then time will be required to show potential buyers the home. If time is tight, FSBO might not be the best course of action.
Security and Safety Considerations
One of the biggest risks of FSBO home sales is that individual owners often let people tour the home with no formal pre-screening to ensure they are serious buyers. This means that just anybody could be browsing around the home with no intention of buying. In fact, many thieves target FSBO homes by pretending to be buyers. However, what they are actually doing is ‘casing' the home for valuables that they can steal at a later time.
Having a professional agent show the home means that most visitors will have undergone a prescreening process. Furthermore, agents also have access to tools such as access code devices and apps that keep track of who visits the home. This helps sellers maintain privacy and keep miscreants at bay during the selling process.
The Potential Losses of FSBO
Improper valuation can cost homeowners money during a FSBO sale, and statistics actually show that buyers tend to pay less in these types of sales. Owners often try to sell homes themselves thinking they will save money on commission fees, but this isn't always the case either. Essentially, commission fees are well worth it considering that a buyer is likely to pay more when dealing with a professional real estate agent.
Unless a Kansas City homeowner has a good deal of time, patience and some knowledge of real estate laws and procedures, a FSBO home sale is somewhat risky. Consider reaching out to a local real estate professional to help sell your home.