Hidden Costs for FSBO - Complex Process, Marketing Technology, Communication and Negotiation

Selling a Puget Sound area home or investment real estate is a much more exciting prospect for many owners of real estate. This is especially true in the counties of King, Snohomish, Skagit, and Whatcom of Western Washington. For owners with multiple years of ownership with untouched equity, there may be significant proceeds to you in a sale. Many cities and regions throughout the United States are not experiencing the rapid growth in their home equity that we here have experienced.

Some home or land owners may choose to forego the services of a licensed real estate broker and act as their own agent. Some may do so because of previous experience as a real estate broker, attorney. Others perhaps due to trust or questioning the competence of others, while others may do so solely with a perceived potential increase of the bottom line (net proceeds) for the sale.

Whatever your intent, there are some statistical realities you need to consider before you set out to independently hire yourself to sell your home:

Online Marketing Strategy

Studies by the National Association of Realtors® show that 93% of HOME BUYERS search online--the Internet--for a home. Here in the Puget Sound area, it’s 96% of buyers! If you plan to sell your house FSBO, you will need to plan and develop a marketing strategy to reach that 96%.  This includes documenting and contractualizing (which isn't a word, but should be) all the selling details of your home (the Listing) and getting that Listing out to as many online resources as possible.  You want to have a robust use of real estate buyer websites and other online marketing to reach the most potential buyers. Doing so ensures you get the highest sales price and the shortest number of days on market. If you don't already have experience developing online marketing using various websites and internet applications targeting key players in the process, effective marketing the sale of your home will be difficult and could result fewer potential buyers and less than desirable price.

Communication and Negotiation

Selling, or even buying real estate involves the interaction of far more than just the person (or entity) selling and a person (or entity) buying. If you choose to take on the responsibilities of representing yourself through all aspects of the sale, you'll not only need to market the property but you must also understand what other parties must be involved and what type and frequency of communication you must engage to make sure things go smoothly. You'll need to choose a title company and work with the buyer to determine the escrow process.

Many savvy buyers see a FSBO home as an opportunity to cut their offer price to the Seller. The Seller may choose not to entertain those offers, but that bit of distraction over that savings could lead to the loss of an otherwise good buyer.

The entire home buying and selling process can be a very emotional issue. Both Buyer and Seller have their own self interests when it comes to price and that's just one of the items of negotiation. There are many other issues in the real estate transaction beyond price that can trigger emotional issues or otherwise have a significant impact on how well the home sale transaction proceeds. Buyer loan process, closing date, inspections, appraisals, deadlines and more. If you plan to put your home for sale by owner, you will need to have an understanding of how to negotiate the terms in each of those key areas and whatever limitations there may be.

Complexity of the Contractual and Legal Details

Once you get an offer from a Buyer, you need to be prepared to understand what is being presented in its complete context--price and closing date may be important but there is so much more a Buyer will be expecting and asking for in the legal forms they present. The number and complexity of the contractual forms involved in buying or selling a home in the Puget Sound area has increased dramatically even in just the past 5 - 10 years. Most of this due to increases in regulations and disclosures required by the laws of the State of Washington. Depending on the city, county or unincorporated areas of the state, the number and types of forms needed to close a real estate transaction will be different. And, because a real estate contract is a legal document, ensuring the accuracy and completeness of a Purchase and Sale Agreement is of critical importance to you as a Seller and the Buyer.

These complexities and potentials risks are likely a good reason why the percentage of home sellers doing it themselves as a FSBO has dropped from 19% to around 8% in the last 20+ years.

Many Sellers Attempting FSBO Do NOT Save Money or Time

A real estate sales statistic report from the website Zillow reported that some home Sellers are inclined to try and sell FSBO because they believe it will save them money (46 percent cite this among their top three reasons), but statistically they don’t actually save what they wanted, and eventually end up listing with a licensed real estate broker because it couldn't sell the way the owner had expected.

“While 36% of sellers that (at first) attempted to sell their homes on their own, only 11 percent of sellers—in other words, less than a third…actually sold without a broker.”

Far too many FSBO homes end up losing valuable, early-impact market time because of a failed "for sale by owner" process.

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Choose Cal and Lindee and the StanfordTeam to Sell Your Puget Sound Area Home!