If you’ve ever considered selling your luxury home for sale by owner (FSBO), the most likely reason for you wanting to do so is because you want to save your equity rather than pay out a professional fee to a luxury real estate agent.
I totally understand that. It makes sense when you initially think about it. But then when you really start to think about it.
It makes no sense.
Let’s talk about why you should never list your luxury home “For Sale by Owner”.
1. You’ll End Up Paying a Fee Anyway
It’s free for anyone to work with a buyer’s agent. Unless some sort of retainer fee (rare) or agreement for compensation is in place, no one is paying their real estate agent to help them buy property.
This means as the seller, no matter what you do, you are going to pay someone’s professional fee.
I’ve heard many FSBOs say “we’re offering a 1% commission to buyer’s agents” thinking that they’re being fair or something.
I will tell you now before you get laughed at later. (Not trying to be mean).
No buyer’s agent will ever recommend your home to their clients if you are offering a commission below the market’s average.
Not only is it sort of insulting to us as real estate professionals, but it’s also just a recipe for you to never sell your home.
If you do happen to get lucky and sell it. You’re probably selling far lower than you’re initial listing price; thus, odds are that you would have made more money with a listing agent after it’s all set and done.
2. Real Estate Agents Study Markets for a Living
I’ve talked in articles before about how difficult it can be to get the price right on a luxury home. For a FSBO, it’s the hardest thing for them to do!
Fun fact: Zillow’s Zestimate is often inaccurate.
Luxury real estate agents have a wealth of tools and information at their disposal to get accurate, real-time market data and price estimates.
We also understand the process it takes to use those tools and data effectively so that we price your home correctly.
It’s also in our best interest to make sure you’re home is priced correctly. If it isn’t, we don’t get paid.
3. FSBOs Have Improper or No Marketing at All
If you’ve read almost any of my other articles, you’d see how much emphasis I place on marketing luxury real estate.
It’s the “selling” part of a sale.
One of the most common issues with FSBOs and why most of them fail is because they simply aren’t marketing the home.
If they are, they’re usually doing an absolutely terrible job.
No, putting an overpriced million dollar home on Zillow will not make it sell simply because there’s a view.
Generally, FSBO homes have terrible photos too, which I’ve emphasized before as one of the most important aspects of selling a luxury home.
It gets worse.
Luxury real estate sales require video marketing of some form. If you plan on selling your luxury home by yourself. You ought to be filming something.
One of the best things you can do is put on your nicest clothes and have someone film you walking through your home. Give the audience a tour. Act like a real estate agent.
If you can’t do that or don’t do well in front of cameras then I’d at least use a video to tour the home.
If you want to get even more crafty. Make a Facebook page for your home and run ads with your video. You don’t need a large budget to start getting views. Here are some numbers from ad tests I’ve run on low budgets in just two days.
Whatever you do, don’t be like the 49% of FSBO’s that said they didn’t market their home at all.
4. Poor Negotiating Position
Real estate negotiations get tough sometimes. Experienced agents have gone through the mill before and know how to wheel and deal.
As a FSBO, generally speaking, it’s your first time selling on your own. Therefore, you don’t have experience.
On top of that, you probably don’t know all the important forms required for the transaction or what they mean.
Any good buyer’s agent on the other side of the table will see this and prey upon you. This doesn’t make them bad; it makes them smart.
You may wind up giving away your entire position during negotiations and suddenly end up at the mercy of the buyer.
You could get sucked into extravagantly long due diligence periods, too many repair agreements, price reductions, trading of personal property, etc.
Being on the side of the negotiating table without a good luxury real estate agent can hurt you more than you think.
5. A Ridiculous Amount of Phone Calls
Most people are busy. Most of my clients are busy. I’m usually busy.
Dealing with a bombardment of phone calls from real estate agents every day, asking you if they can view the home or better yet, list it for you, gets annoying by the third phone call on the first day.
No longer can you browse your phone in peace, have a clear voicemail inbox so you can get the messages that matter, and you know, live your life without disruption.
The problem is that you need to answer those phone calls too. One of them may be the person who wants to buy your house. If you miss it, then you lose what might be your only opportunity to sell.
A Little Story About My First Experience
On the very first day of being a real estate agent, I walked into script practice at my Keller Williams office. I was prepared and excited to sell.
I knew that I’d probably call a bunch of FSBOs that day because I didn’t know who else to get business from and most of the Keller Williams agents recommended that new agents get started with FSBO phone calls.
After scripts, I went outside to my car (at this point in time I did not have my own office space) and looked up FSBOs on Zillow.
I found a nice $350,000 seller who had been on the market for about three weeks, figuring if they hadn’t listed after three weeks then they probably weren’t getting called by other agents that much anymore.
I dialed his number and got this…
“Hi, this is Matthew with Keller Williams how are you to…”
“Oh my God! I swear if I get one more f****** phone call from a f****** Realtor! You are number seven and it’s not even 9 AM yet! No! I’m not listing my home!” *click*
That was my very first real estate phone call.
I took a stroll around Downtown Asheville, pondering my mistakes in life and wondering if real estate was going to be my next one.
I somehow mustered up the courage to make one more phone call to a FSBO that had just listed their home on Zillow that morning.
She was very friendly considering she hadn’t been blown up yet. I scheduled a time to come see the house later that day.
I hung up knowing that I would never be excited to make a call to a FSBO again, but was grateful to know that not all of them will yell at you.
By the way, I did not get the opportunity to list their house, but they did end up listing it with an agent.
Selling a luxury home by owner is way too much of a hassle for something that might not even save you money.
But, if you’re considering going down the path of selling a home on your own and I haven’t been able to convince you otherwise. Good luck.
If you succumb to the need for a luxury real estate agent, I’d be happy to help.