FSBO, or For Sale By Owner means that an owner decides to forego using a real estate agent or broker to list their property. Most people choose to sell a property on their own to avoid paying commission on the sale of their home.
This sounds like a great idea at the time; however, there are many pitfalls.
• Only licenced brokers have access to the Multiple Listing Service, know as REALTOR.ca, formerly known as MLS.ca. The majority of people searching for a property use this site as their main tool. Even if they are using an agent to help them purchase a property, they will seek out properties on MLS and then contact their agent for more information. As of October 2010, a private seller can pay a flat fee to have a broker or an FSBO company place their listing on the Multiple Listing Service, however, you will have to pay upfront.
• There are many upfront costs associated with selling a property. If you hire an agent, this will be included in the commission. You only pay when your property is sold.
• Selling real estate is stressful and time consuming. If buyers can only view your property on a weekday, are you willing to take time off work?
• An agent is experienced in marketing and selling property. Most homeowners do not have these abilities. Even if you are experienced in sales in a different industry, the real estate market is a specialized field. Realtors can market your home through REALTOR.ca, their own websites, newspaper ads, flyers and open houses.
• There are many legalities involved in selling a property. Real estate agents must take courses to become licensed. They are aware of real estate laws in the province, and you are protected by their knowledge.
• Buyers believe that they can get a better price for a FSBO and will not offer the best price.
• Many homeowners are not good negotiators and do not know how to accentuate the positive aspects of their home and downplay any negative aspects.
• An agent knows how to price your home for the market. Most homeowners over or under price and reduce the chance of getting an offer. Real estate agents have access to the comparable sales in your neighborhood.
• Real estate agents know the market, but they also advise owners on how to prepare their home for sale. They have contacts with home stagers, home inspectors, trades people, real estate lawyers, mortgage brokers, and other professionals who can make the transaction a smooth one.
• Many buyers’ agents are reluctant to engage in FSBO deals.
• Many people attempt to sell their own property, and find the process daunting, or their home sits on the market for month. They eventually defer to an agent, after they have had no success on their own.