1. The Trust Issue
A FSBO is the owner of the home they want to sell. They are looking out for themselves, NOT you. They are not a licensed real estate agent, so they aren't bound by the Code of Ethics that Realtors are. When you have a licensed agent on your side, you know they are working for YOU. They are looking out for YOU.
2. Documentation & Legal Issues
There are many laws when it comes to the transaction of property from one person to another, and with that comes many forms and legal procedures. It is required by law for disclosures to be made about the condition of the home. A real estate agent knows all about this and will know how to safeguard you, because, again, they are looking out for you. A FSBO is only looking out for themselves.
When it comes time to negotiate, a FSBO will most likely not know the true value of their home in the current market. They may try to rely on information they get from 3rd parties like Zillow or other computer-generated valuation systems, but those systems are quite often unreliable and wrong. Only a local real estate agent who is active in the market will know what a home should be priced at. When it comes to negotiating, it helps to know what the home is worth in the first place, right? Then you take into consideration that a real estate agent has lots of experience in negotiating. If you want a good deal, don't count on the FSBO to give it to you.
4. Cutting Corners
The #1 reason someone tries to sell their home on their own, is to try to make more money (save on commission), even though studies show that they very rarely save money (see Recap at the bottom). Selling it on your own instead of using a professional to get the job done right, is really cutting corners. If that FSBO is willing to cut corners there, where else are they willing to cut corners? Maybe they re-wired the home themselves to save money and there's a fire just waiting to happen. Maybe instead of hiring a professional to roof their home, them and a couple of young kids in the neighborhood did it, and unless you pay to have an inspection done, you'll never know about the leak they have in the back bathroom when there is heavy rain. This brings us back to the TRUST issue. Not all FSBOs are out to get you, but buying a home is a really big purchase. Do you want to risk it?
If someone wants to sell their home quickly, they almost always hire a real estate agent. With FSBOs you'll find less urgency. Most of the time they probably already assume that they won't be successful in selling it or if they are, it will take a long time, so they put a FSBO sign in their yard and usually forget about it. If they can't get you to overspend on their home, it's okay - they can just go back to waiting. A person who hires a real estate agent is going to be more serious about making a deal and moving things forward.
The Bottom Line
This is not our opinion. These are real reasons we have heard from people over the years, as to why they won't buy a FSBO, and when you think about it, these reasons make sense. There are some very honest and trustworthy people out there trying to sell their home on their own, but buying a home is a big deal. It's a huge investment. It's not like buying a used refrigerator from the local thrift magazine. Most people want the protection and the peace of mind that comes with hiring a real estate professional.
What if you're not a buyer, but you're considering trying the FSBO route and try to sell your home on your own, just to save that 7% commission. Studies show that a home sold by a realtor, on average, sells for 31.5% less than a home sold through FSBO*. Would you rather save 7%, or make 31.5% more? Get the job done right the FIRST time. Hire a real estate professional. Connect with one of our agents today by going here: https://www.brinkoetter.com/search/directory/
Source: NAR 2017 Profile of Home Buyers & Sellers