Given the apparent "huge savings" for vendors, given the "cut costs" economic mood, and given the recent modifications to MLS access, why do so few vendors go the FSBO (For Sale by Owner) route?
Frankly, because selling one’s house is not as simple as it might seem, and because one rarely ends up with more money in one’s pocket.
Notwithstanding all the technology available, when it comes down to closing a deal – let alone getting an offer – real estate is a business where transactions are best handled by intermediaries. This is especially true in the residential field, where the parties are more emotional and the negotiating experience is limited.
If a property is offered for sale by an owner, the buyers always want a discount equivalent to a commission (even though the vendor insists this has already been factored in).
Most serious buyers are working with an agent already, because the agent is "free", does the homework, and pays for the drive-around gas. Agents obviously ignore FSBO’s even if the vendor offers to pay a commission (why risk the inevitable chiselling from the vendor, when there are so many properties safely listed with a fellow broker).
Should a property owner at least first try selling their home themselves?
Well, let me predict what will happen:
- The FSBO nearly always overprices the property.
- Most of the calls will be from either agents trying to get the listing or ‘bottom fish’ with lowball offers (who have usually been to too many seminars on becoming a real estate millionaire with nothing down).
- People may call to see the property, but many of them will not show up at the appointed time (despite your feverish clean-up and taking time off work to meet them).
- If and when you do start talking seriously with listing brokers, you may not like to hear the true value.
- By that time, other brokers have noted the FSBO process, and FSBO price, and are still going to hesitate about showing the property even after it is listed.
In the end, the sale process takes much longer, and rarely yields a higher bottom line.
But, hey, if you want to give it a shot, have a unique property, lots of time on your hands and a thick skin…. what the heck, give it a shot!
Harry Stinson was one of the first Toronto developers to recognize the potential for urban condominiums, to develop residential lofts, and to convert old office and warehouse buildings into residential spaces. His current project is the Stinson School Lofts, an 1894 heritage building in Hamilton, Ont., that he is converting into stylish and affordable lofts.