Have you seen "For Sale By Owner" signs around London?

Occasionally, homeowners believe that selling their own properties will save money and give them an advantage over sellers who listed with Realtors. If you're thinking about selling your own home and representing yourself, consider the following points before deciding to tackle this challenging and legally complicated task.

1) FSBO properties are exposed to substantially fewer prospective buyers... in fact, far fewer than Realtors generate with MLS listings. Less market exposure usually means a FSBO home will take longer to sell.

2) Generally, the longer a home is on the market, the lower the sale price. Why? Because most buyers conclude a home that doesn't sell quickly either has things that other people have disliked, or the property has something wrong with it.

3) Even if a FSBO marketing company is employed, exposure is minimal unless prospective buyers are looking on FSBO websites. But most buyers don't look on these sites - they search on Realtor.ca. Many FSBO marketing companies charge between $500 and $1,000 for their do-it-yourself sales kits. (And you pay for the sales kit whether your home sells or not.)

4) Most sellers think buyers will fall in love with their home and that offers will follow quickly. But the reality is that for buyers, the decision-making process usually begins well after viewings. When prospective buyers are looking on their own (without the help of a Realtor), they often talk themselves out of buying. It's human nature - buyers tend to look for the reasons not to buy. (Please trust me on this point... I've worked with many, many buyers over the years.) When a buyer is being represented by a trusted, professional Realtor, a sale is much more likely if the property meets the buyer's search criteria.

5) Most buyers don't want to deal or negotiate directly with sellers. Serious buyers often avoid FSBO properties merely because they recognize that they are not in the real estate mainstream which can make people wary of a FSBO's motives. Further, lack of negotiating expertise and current market information can result in lower sale prices, deals that may never close, and potential lawsuits (that may cost much more than any commission saved).

6) Since most qualified buyers use realtors to help protect their best interests, FSBO sellers will likely end up negotiating against experienced professionals. If FSBO sellers do offer selling commissions to entice real estate agents to bring potential buyers, which they often will when their properties don't sell, how much are they actually saving in realty fees? And why wouldn't they also want an experienced professional to help protect their best interests?

7) Many real estate lawyers recommend against attempting to sell one's own property (which is probably born out of the legal adage, "a lawyer who represents himself has a fool for a client"). FSBO sellers who use lawyers to prepare and review offers, counter-offers, amendments, waivers, etc, may pay considerably higher legal fees than they thought. This is a good time to note that even many realtors do not try to sell their own homes; we often hire trusted colleagues to sell our properties, to negotiate on our behalf and to represent our best interests.

8) A seller pays commission to a real estate brokerage company only if the home is sold successfully at a price and on terms that are satisfactory to the seller. Until then, it doesn't cost the seller anything. On the other hand, a FSBO seller pays for all the marketing expenses regardless of the final outcome.

9) Accepting an offer is one thing but ensuring a successful closing may be quite another. When real estate transactions run into problems, it's usually at closing time. While buyers and sellers expect their lawyers to resolve problems, deals may be lost. Lawyers must act according to their client's instructions and are not paid to negotiate (unless you want to pay for these additional services). However, an experienced professional Realtor can be a great asset acting as a mediator when there are last-minute problems.

10) So far, I haven't even mentioned the stress that's involved with selling a house, the risks associated with inviting strangers in for showings and open houses (who may or may not be qualified or legitimate buyers), legal documentation required to protect both parties in a transaction, the importance of looking at net equity after the sale rather than selling costs, the services and benefits only professional realtors can offer, and the list goes on...

Invest in a good Realtor. Chances are you'll come out ahead without all the headaches and risk.

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