For Sale By Owner
What is the point of For Sale By Owner in NYC? Well, there is no point. I cannot understand why Homeowners that have been working hard to pay their mortgages and potentially have invested in renovating their home would want to take on the task of a For Sale By Owner listing whether direct or assisted.
New York City is not Springfield
New York City is not Springfield or like any other city. It is a very different vertical market. The idea of FSBO listing your home that you have so much invested in to only take on the risks highlighted below makes no sense in NYC perhaps even in Springfield.
FSBO NYC Websites are like garage sales
Selling your property FSBO style is like having a garage sale. The difference is that you are not selling $1 items. FSBO Websites that promise to help you sell your home fast and save you thousands of dollars in commission are a business making money from you whether you sell your home or not. FSBO sites have no vested interest in selling your home or more importantly for the highest price possible.
Sure, they don’t charge as much as a real estate agent, nor they should because they are not providing much of a service to you, except making money from you. It’s all about volume for these websites, so they pitch you on the pipe dream on saving money, hoping for you signing up and so they can list your home on lots of irrelevant and unrelated websites. Excuse me for being brash, but a listing on sites alone – does not sell a home. Anyone that tells you the otherwise has no idea, no matter how good their pitch or well designed their website.
What does a listing agent do that I cannot do?
A seasoned real estate listing agent knows what it takes to package and communicate your home the best way possible. Of course, not all of them. You need a good one. If you have a bad one, then it’s like not having one at all. A great agent will strategize and plan a marketing campaign, use professional photography, write an engaging, concise description, stage or prepare your home for showings, send out emails to other brokers, pre-screen buyers, show qualified buyers anytime, host open houses, they will do all they possibly can to sell your home because that is how they make a living.
What if a qualified buyer wants to see your home while you need to be at work? In a world of little patience, sensory overload and market headwinds due to a slowing market – it is important to package your home, so it sells a lifestyle, not just the walls.
One may assume: “…well, this article is written by a real estate agent, thus, biased and worthless…”. I am a real estate agent, but I have been an exclusive buyers agent for over a decade and never taken a sales listing and have no vested interest in soliciting any listing including your home.
High-net worth indivuals are disciplined savers yet they hire listing agents to sell their home. The reason is becuase they are also smart.
Not all listing agents work as hard
Not all listing agents are great, nor deserve listing your home. But do not discount the power of a great one. Firstly, part-time agents are not the way to go. You want a full-time career agent, someone that is knowledgeable and a great people’s person. People want to do business with educated and well-informed professionals they like, and, yes, that includes buyers. Some agents just open doors and achieve no results; often these agents have overpriced your home to get the listing.
Seasoned real estate agents get paid a commission for the same reason you are paid at work. Employees that work harder receive a bonus in the business world. Comparable, in the real estate world, those that work harder – get to sell properties and receive more listings. In my case – I get to represent more buyers based on successful deals.
A real estate listing agent is in the customer service and communications business of packaging and selling a home as fast as possible for the highest price possible. The right one may even exceed your expectations spurring a bidding war and selling your home for more than you had hoped for.
Seasoned agents are expert communicators and negotiators. They know what to say and what not to say. They can protect you from your emotional attachment and professionally guide you through negotiations avoiding amateur seller mistakes.
Unfortunately, FSBO websites fail to understand the importance of negotiations. Negotiations are essential in every step of the sales process. Negotiations are not always just about price, and the smart ones know the inner workings of how to use physiological negotiations.
Home Staging Consultation
If you have been living in your home for over five years, the chances are it needs some TLC. Whether it is painting, deep cleaning, decluttering or reconfiguring furniture – an agent will carefully go through the home to make sure it is ready for market.
After living in a home long enough, many of us have tunnel vision. Thus, having an outside independent opinion on what can help your home appeal to a broader audience of buyers is crucial.
FSBO NYC Pros and Cons
- Your listing does not reach all 30,000+ real estate agents in NYC.
- Your listing does not sell, you lose a lot of time and still end up hiring a listing agent.
- Your FSBO does not incentivize agents to bring clients.
- You overprice your home hoping for a windfall that never comes. It causes you further losses: as it takes longer to sell your home while paying property taxes and or maintenance charges.
- You underprice your home without an expert valuation analysis.
- Your property sits on the market longer than the average days on the market. It becomes stale and undesirable much like a product on a store shelf that has passed its expiration date, is dusty with faded packaging. Nobody wants it.
- In case your FSBO listing is well accepted (highly unlikely), be prepared to immediately drop all you are doing and start answering many incoming calls, including spam and solicitation, respond and write a lot of detailed emails, pre-screen and pre-approve buyers, run their credit checks etc. while trying to read between the lines of the buyer’s type you are facing. Instead, you could have been enjoying quality time with your loved ones, play with your children or barbecuing with pals.
- You spend countless hours of entertaining unqualified buyers, window shoppers.
- You found a buyer only to discover they have lied to you and wasted your time, or, worse, got in the way of a qualified buyer.
- Listing your home by FBSO makes you look desperate in a buyer’s market.
- You may eventually sell your home saving on commission.
More Reasons Why For Sale by Owner Sales Fail in NYC
A for sale by owner, or FSBO, the transaction is a conventional method for homeowners who see a chance to make a better profit by cutting out the realtor commission. It may seem like a better deal, but according to the NAR Profile of Home Buyers and Sellers, that is not the case. The average FSBO price was $185,000 while the average for a home sold through an agent was $245,000. That’s a difference of $60,000 which can quickly cover the agent’s commission (usually 6%) and leave a better profit.
If you’re still considering selling on your own here are the top reasons FSBO’s fail in real estate.
You have to do all the marketing yourself
These days, buyers always start their home search online. Sellers trying to market on their own will be unable to devote fulltime work to it and won’t reach as wide an audience. The NAR report found that 42% rely on a yard sign, 32% rely on friends and family, and a little under 15% rely on social media.
Without the use of an agent, you’ll be very limited in the number of prospects you can attract. A real estate agent knows how to market a property properly and has contacts with other agents that can share the listing with their clients.
FSBO NYC homes can be priced wrong
The key to any listing price is to find the sweet spot. Not too high and not too low. Without market knowledge and experience it’s hard to see that sweet spot. Those selling through FSBO tend to set a price based on an online assessment tool or their gut feeling.
An overpriced home can languish on the market for months or even years. Even if you lower the price later, it can be stigmatized by buyers who see that it has been on the market for a long time. A trained agent knows how to price correctly and find that sweet spot in no time.
You have to handle all the paperwork
The NAR report also found that understanding paperwork was the most daunting task for FSBOs. Selling a home in NYS can require as much as 15 different documents which must all be filled in and filed correctly.
Without a competent agent to guide you through the paperwork, mistakes and misunderstandings can happen.
Failure to file paperwork correctly can cause delays and result in a whole deal being canceled. Unless you have a background in law, it is best to lave paperwork to the pros.
Liability is all on the seller
Everyone makes mistakes, but a seller not represented by an agent pays for those mistakes. Real estate agents have errors and omissions (E&O) insurance, along with enough experience to catch a mistake. If you make a false claim, even unknowingly, in the listing or paperwork, you could be liable for litigation.
Hidden costs can add up
The whole point of FSBO is to save money. What’s often not taken account of though is the many hidden costs in selling. You’ll need to pay for signage, photography, flyers, home inspection, contacts and so much more. It’s hard to estimate these costs so they can quickly fly out of control. Working with an agent means all the extra work gets taken care of and ensures nothing is forgotten.
- 1 For Sale By Owner
- 2 New York City is not Springfield
- 3 FSBO NYC Websites are like garage sales
- 4 What does a listing agent do that I cannot do?
- 5 Not all listing agents work as hard
- 6 Negotiations
- 7 Home Staging Consultation
- 8 FSBO NYC Pros and Cons
- 9 Cons
- 10 Pros
- 11 More Reasons Why For Sale by Owner Sales Fail in NYC
- 12 You have to do all the marketing yourself
- 13 FSBO NYC homes can be priced wrong
- 14 You have to handle all the paperwork
- 15 Liability is all on the seller
- 16 Hidden costs can add up