The housing market on Oahu is hot with plenty of buyers for good condition homes in desirable locations. Most sellers have the same objectives; to net the most money, to sell quickly, and in the most convenient way.
Naturally, home sellers would like to save some dollars by not paying those “exorbitant” real estate fees for “nothing.” So, many sellers kick around the idea of a For Sale By Owner. And, of course, any Realtor you ask will offer up a compelling argument against it because they know the value of their work, and they’d really like to list your home for sale.
So, What’s the Real Deal About FSBOs?
1) It’s a lot more work than you think. It’s not too hard to put an ad on Craigslist, throw open the doors, and have a buyer walk in. It’s all of the contract process and any unexpected problems that stump most people. Do you know how to find out if the buyer is qualified to buy? Do you know what to do when the appraisal doesn’t match the contract price? How about getting an encroachment agreement? Consider what it will cost you in both time and money to figure it out.
2) No problem. You’ll pay half the usual commission to the buyer’s agent and she’ll figure it out. At least you got a 50% discount. Of course she’ll take care of it, to her own client’s benefit. She represents the buyer. You’re on your own. And, by the way, she knows going in that she’ll be doing more than half the work, so that discount probably isn’t going to work out in your favor.
3) If it turns out to be easier than you thought it would be, you probably left money on the table. You place the ad, open the doors, and in a single day you receive 5 offers. That’s a problem. A good problem to have, but a problem, nonetheless. With all the ways a buyer has to cancel a contract unscathed in Hawaii, how do you choose the one most likely to stick? How are you going to negotiate 5 offers at once, get the best price possible, and not have a legal problem later?
4) OK, you won’t underprice your property and receive multiple offers, you’ll reach for the stars instead and just lower the price if it’s not working. I hope you’re an excellent salesperson. The problem with this strategy is “bounce.” You’re the hot new home on the market, the darling of the moment, all eyes are on you, and the first 25 people in the door (many of them agents) think you’re a flop because your price is too high. Word spreads. 30 days in you realize you’ve fallen from grace and you lower the price. Now all the people who were willing to wait on you to lower your price are waiting for you to get really desperate.
5) It can be awkward. No buyer wants to tell you the truth about what they think of your paisley wallpaper, and they won’t tell you you’re a slob who hasn’t dusted the ceiling fan blades in 15 years. They’ll just say it’s really lovely, but “not the one for us.” An agent acts as your intermediary to objectify the personal comments and deliver the truth in an actionable way. Better yet, your agent prevents that situation.
6) You can’t see the forest for the trees. You’re too close to your home to be objective about it. You hire me to tell you what “Anybuyer” sees when they walk in the door and how to dress your home for success. I show you how to stage your home for photos, and how to stage it for showing, which are two different things. If you have a little money to spend on dressing things up, I show you where it will make the most difference. And I’ve been called a “bulldog” about de-cluttering. But that’s a good thing for you. It means you won’t have 50 showings with zero offers, which wears you out emotionally and wastes everyone’s time.
So, Who Should Consider a FSBO?
1. People who have bought and sold many (and I mean more than 5) properties in Hawaii. The variation in property ownership, condition, price, style, and contract process is quite unlike other states and can be confounding to buyers. It’s even moreso for the seller because the buyer is offered so many opportunities to cancel without penalty.
2. Attorneys or others who deal with complex contracts in their daily life and understand their gravity may consider a FSBO.
3. People who have a lot of spare time and a sales personality. Selling your home on your own is a full time job. You earn the commission, you don’t save it. If you’re willing and interested in taking on the learning curve that comes along with this endeavor, go for it, keeping in mind the warnings above.
Want to Know More?
If you’re still interested in trying a FSBO, and want to know more about what value Realtors add, just ask. I’d be happy to describe each step of the preparation, marketing, and contract processes and you can decide for yourself if you’re willing and able to take those on, or if it’s best left to a professional.