FSBO myths

5 For Sale By Owner (FSBO) Myths Debunked

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For Sale by Owner (FSBO) sales are a fun topic to discuss since there are so many statistics that disprove the “benefits” of selling FSBO, yet, there are still FSBOs on the market.

I’ve written about why you shouldn’t ever list a luxury home for sale by owner.

In this article, we’re going to discuss five major myths about selling a home For Sale by Owner that homeowners tend to believe.

Myth #1: You’ll Sell Your Home Faster Than If You Used a Listing Agent

91% of people use a real estate agent to list their home.

7% of sellers will take the FSBO route and at least a third of them will list with an agent within a month.

Not to mention about 90% of buyers use a real estate agent to help them purchase a house. This is because it’s largely free to work with a buyer’s agent.

If the vast majority of people are using real estate agents to serve their needs, then why does a FSBO believe they can beat the system?

I don’t know to be honest.

Myth #2: Real Estate Agents Are Extremely Lazy and Won’t Do Anything to Sell the Home

Okay, so some of us are. I will not completely deny this claim.

However, I think it’s exceptionally unfair to label an entire workforce lazy simply because a few of us list houses by putting a sign in the front yard and call it a day.

My career can be extremely challenging at times, whether it’s acquiring clients, marketing properties, or going through the paperwork to make sure everything’s in line.

Especially being in the luxury real estate space, I have a lot of work to do and not much time to slack off.

So no, I’d have to debunk this one.

Myth #3: I’ll Net More Money If I Sell FSBO

This is completely untrue.

The National Association of Realtors reports that the typical FSBO home sold for roughly $200,000 while agent-listed homes sold for a median of $265,000.

This is a significant difference.

But you might say “yeah, but the commission I’d have to pay out would close that gap”.

If we split an average 6% of the sales price between the real estate agents as compensation, then the total taken off a $265,000 home is $15,900.

It would lower the simple net (not including closing costs, repairs, and outstanding mortgage) to $249,100 for the sellers.

We’re still almost $50,000 ahead of the FSBO with commission accounted for.

FSBO Net Sheet
Odds are that you’ll still have to pay out some sort of commission.

So, then you ask, “well how can an agent sell for more?”

It comes down to a simple understanding of capitalist economics.

Generally, real estate agents are connected to a large network of other agents in their market. This means the agent can let them all know with a simple email blast that your home is on the market and that they should show their buyers.

Then, an agent with a set marketing budget will start to develop a marketing campaign for your home.

Within a day, the exposure for your home could have easily surpassed a couple thousand people.

This drives competition between buyers, thus, driving the price to either 100% of asking or above.

As a FSBO, there’s no way for you to drive competition.

You do not work with real estate agents who have buyers. You don’t have a specific, systemized, proven marketing system, and if you were to get buyers. How do you know the process of driving up a sales price?

Then when it’s all set and done, you’re still poised to make less money.

Myth #4: All I Have To Do Is List The Home On Zillow

There’s no doubt that Zillow is a real estate powerhouse.

But, simply listing a home on the website doesn’t make it sell.

As real estate agents, we have access to the Multiple Listing Service (MLS). When we list a home on our system, it’s automatically disbursed to thousands of different websites, including Zillow.

Just because we’ve done this, does not make the property sell!

Sure, you might get a lot of views and saves, but also remember that anyone in the world can view and save your home. That doesn’t mean they’re going to buy it.

The real indicator of how well you’re doing with your marketing efforts is to count the number of showings you’ve held.

If you’re getting traction there, then you are on a better track. If not, it’s probably time to list with an agent.

Myth #5: I Know How To Price My Home Because I Know It Best

You’re right, you know your house the best.

I know the market the best.

That means I know how to price your home better. I also don’t have an emotional attachment to your property.

Odds are that I can bring a much more rational opinion to the table.

I’ve seen so many FSBO homes listed at like $900,000 because there’s a view of Mt. Mitchell, the largest peak in the Eastern U.S.

No doubt, it’s a majestic view, but when you list a 1,300 square foot home that was built in the 1980’s and never renovated, you’d be hard-pressed to find a sane buyer to walk through the door, let alone put an offer in.

Conclusion

You’re better off just listing with a real estate agent and save yourself the hassle.

You’ll probably end up with more money in a smaller length of time with less of a headache.

If I’ve convinced you to not sell your home FSBO and want to sell with a listing agent, then check out my definitive guide on selling a home the Berri Way to help you understand the process.

Stay Classy.

Matthew Myre

Matthew Myre

Matthew is a North Carolina real estate agent and the CEO of Berri Properties. Matthew brought his passion for writing to his career by creating the Berri Properties Blog, which now ranks as one of the Top 50 Best Real Estate Blogs in the world. His favorite things are basketball, history, politics, and popcorn. Feel free to contact him at matthew@berriluxuryproperties.com

Matthew Myre

Matthew is a North Carolina real estate agent and the CEO of Berri Properties. Matthew brought his passion for writing to his career by creating the Berri Properties Blog, which now ranks as one of the Top 50 Best Real Estate Blogs in the world. His favorite things are basketball, history, politics, and popcorn. Feel free to contact him at matthew@berriluxuryproperties.com
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