Property Talk

The risks in selling your home yourself

In a recent article on Inman, the leading US-based real estate online news portal, it was reported that less than 10% of For Sale By Owner (FSBO's) or Private Sales as we call them to succeed.

They analyse the pitfalls involved with FSBOs and why these create such a high probability of these transactions failing or delivering a less favourable result to the seller.

Here are seven considered reasons as to why FSBOs or Private Sales typically fail:

1. Preparation of the home for selling and showing. If a home is not appealing to buyers in general, a sale is unlikely to result. A home should first be prepared for marketing by repairing all items that may require attention, especially anything damp related. Any hint of damp in a home is a deal killer. De-cluttering and professional cleaning are highly recommended to move the home to showroom condition.

2. Marketing of the property. Although a private homeowner may have access to one or two channels to market his property, most people are not able to access the full range of marketing channels agents would typically use. How photography and videography are used and leveraged through social media platforms is harder to achieve for a once-off event than for a full property portfolio. Buyers crave choice and comparatives and a private seller is not equipped to provide those.

3. Dealing with enquiries from prospective purchasers. An agent will typically handle a large number of enquiries around a property and understands which key questions to ask. How to screen enquiries and discern genuine buyers who are ready and able to transact is skill agents have to save time. Private sellers may end up wasting time with non-qualified buyers. Many buyers first have to sell another property or have to obtain pre-approval on mortgage finance, which a private seller is not necessarily equipped to assist with.

4. Unwanted home inspection results. More and more buyers demand home inspections to satisfy themselves on the quality of the property. These inspections often provide unexpected recommendations on remedial action across a range of items, which a seller may have trouble dealing with and cause the private sale to fall apart. Agents are skilled in dealing with these scenarios.

5. Negotiating with buyers. Private sellers are not typically skilled negotiators and may not be fully aware of the various issues that need to be clarified in the sale agreement. The devil is often in the detail and a professional-level understanding of the contractual terms within a sale agreement is what most agents bring to the table.

6. You may get less as a private seller. The incentive to private sellers to save the commission on a transaction often means that they forgo having a professional in their corner ensuring the best result is achieved. This is often achieved with an agent having more that one interested party in the home at the same time, an event a private seller is unlikely to achieve.

7. Closing the deal. In a property sale, once the parties have agreed and signed the contract, there remains a series of events that have to happen to get to the registration of the transfer. During this period many things can go wrong and derail the sale, which a private seller may not even be aware of or know to look out for.

The typical estate agent is earning every cent of the commission payable on a transaction and for good reason. The best agents make complicated events appear seamless.