Why selling your home "For Sale By Owner" (FSBO) is a HUGE mistake!

FSBO sells for a lower price than REALTOR® listed homes
A 2006 study by the National Association of REALTORS® (NAR) showed the following:

"The median home price for sellers who used an agent was $247,000; the median price for a FSBO-sold home was $187,200."

Example of FSBO vs. Listed
I once had some homeowners contact me about listing their home in Provo. I came up with a value of $425,000. They informed me that they would try FSBO for about a month and if that did not work, they would contact me. They called me a few weeks later to tell me they had sold their home. I was disappointed but disappointment turned to shock when I learned they sold their home for $362,000!

Now sometimes FSBO sellers think they will sell their home for less since they aren't paying commission and still come out ahead. What they don't realize is that they often undersell by way too much. In this case, after paying my commission and paying their seller closing costs this couple would have still walked away with more than $33,000 extra if they had listed with me. They flushed a huge amount of money down the toilet.

FSBO fails 88% of the time
This same NAR study mentioned above concluded that only 12% of homes sold are sold FSBO with 88% being sold using a real estate agent. Most sellers who try FSBO, end up listing with an agent after wasting a lot of time and money. Of those who actually sell their home FSBO, 22% sell to a friend or family member, showing that their marketing was not the key to their success. Many of those who do sell their homes FSBO actually paid a buyer's agent to bring them a buyer so they had no representation for themselves but the buyer did. They don't often tell their friends, family or those conducting surveys that they were unable to sell their home without the help of a buyer's agent. Some estimate that less than 8% of all home sales are truly conducted with no agent involved.

FSBO puts you at greater risk of Legal & Contract Issues
Most people who sell their home FSBO, are not aware of the legal issues surrounding a real estate transaction. Disclosures at the city, state and national level may be required. Failure to do this correctly can lead to lawsuits or large fines.

Handling of earnest money deposits also confuses a lot of FSBO sellers. Title searches, title insurance and various obligations under the law cause confusion for inexperienced sellers. Failure to have a real estate agent can put a FSBO seller at great risk for years following the closing.

FSBO reduces showings and reduces safety
One big reason that FSBO fails so often is because FSBO sellers are hard to get a hold of and showings are often restricted to only a small window of time. Also there are safety concerns that FSBO sellers often forget. Inviting strangers unescorted into your home is unwise. When a REALTOR® shows the home the buyer is escorted by an agent who is licensed by the state, background checked and finger printed. FSBO is clearly invites more risk and reduces the number of showings.

Client Comments on FSBO:

[Harry] knows the paperwork and contracts extremely well. With all of the legalities and rules involved in a real estate transaction, I don't know how a person could realistically feel comfortable without a Real Estate Agent as their guide. With Harry's level of expertise, I'm very glad he was representing us instead of the other guy! We recommend him highly to anyone who is looking to sell their home.

- Jason & Dawn Douglas

During the four months we were FSBO, we did everything we could think of to sell our home, we put up signs, made a handsome flyer, built a web site and advertised in the newspapers, even delivered hundreds of flyers to local real estate agencies offering a buyer's agent commission. As a result, we had a lot of interested people call and come through the home, but nothing got past the walk-through phase.

By June, we began to get nervous-we were learning that in a buyer's market, we couldn't just "wing it"-we needed professional help. I called Harry on a Friday evening and by Monday morning, Harry's marketing machine was in full swing for us. Harry had run ads in places we'd never heard of; made new, larger signs; enhanced our website and flyers; and most importantly had taken over the day-to-day work.

To our surprise just 32 days later, we had a signed offer which fit perfectly with the timing of our new home.

- Jeff & Amy Allen

We had more people look through our condo in the week that he represented us than the whole month we had it for sale by owner. Because of Harry's drive and ability to work with other agents, we accepted an offer only seven days after listing with him."

- Brian & Tiffaney Kenison