Eight common for-sale-by-owner mistakes

Reader Question: Are there eight common for-sale-by-owner mistakes? We are planning on selling our home this year. When we see how fast homes are selling in our neighborhood, the idea of just hanging our sign in the yard is something we are considering. If we go ahead with this, what are the significant mistakes for-sale-by-owners make?

Monty’s Answer: According to the National Association of Realtors (NAR), eight percent of all transactions are for-sale-by-owner (FSBO). The largest U.S. real estate company has about five percent of the market. If all FSBOs were one real estate company, it would be the largest real estate company in the United States. This fact demonstrates that while there are disadvantages, FSBO works. That said, “just hanging a sign in the yard” most often will not be enough. Whether or not they use an agent, many home sellers feel their home will sell right away. Selling a home for the best price requires considerable effort. 

There are many mistakes to be made, and even real estate agents make them. Here is a list of what I consider to be the eight major mistakes made when selling a home:   

  1. Not providing enough information. To a homebuyer, buying a home is not a casual purchase. Buyers are suspicious, and rightly so. They will often verify a seller’s claims. Information that is sketchy, incorrect, outdated, or misleading may get you eliminated. 
  2. Pricing the home incorrectly. Is it too much or not enough? Pricing is the most challenging task because every house is worth a different price to different people. Real estate agents also incorrectly complete this task. 
  3. Not understanding how to qualify prospects. Some buyers are very open, and others guard their motives. What are appropriate, non-offensive questions to gauge interest and their ability to finance? A savvy buyer will come pre-approved. 
  4. Talking too much. Buyers are there to look at the house. Do not distract them with all your memories. When they ask a question, briefly answer it, and stop talking. Allow them to focus on the house. Make friends at the closing.   
  5. Not knowing when to or how to follow up. A home seller may believe that following up a day or two later is seen as “too anxious” or pushy. It could be, but as likely, the buyer sees it as courteous and professional. “Just following up to see if I can answer any questions?”   
  6. Incorrectly presenting the home. Any animal can be a distraction. Don’t miss opportunities to remedy foul odors, television noise, squeaky doors, and dirty windows. Remember the basement, garage, yard, and more.  
  7. Understand the importance of access. Try to place the buyer’s needs ahead of your own. Be on high alert and try to be able to show it on short notice. 
  8. Not having the home inspected before it goes on the market. There may be issues you are not aware of that you can replace or repair to eliminate problems. Buyers will pay more for a home in excellent condition. 

The myriad of time-consuming tasks to prepare for the first prospect is time well spent. These tasks are essential whether you are selling on your own or with an agent. It is not unusual that an agent will call to show your FSBO home. Whether or not you make that choice depends on various factors, but many FSBOs will allow an agent to show the house. Here is a link to an article with some suggestions on what to do when it happens.