FSBO Mistake #4: Not Proofing the Listing on MLS
If you try to fix your own plumbing and screw it up, it might cost you, at most, a thousand bucks or so and a weekend of your time (for clean-up, calling plumbers, etc.)
Ditto if you botch fixing your own car.
However, if you try to sell your own house and blow it, the cost could easily be tens of thousands of dollars (depending on the value of your home). Not to mention headaches that last weeks (if not longer).
That point was brought home to me the other week when I showed one of my clients a FSBO (“For Sale By Owner”) home.
My client liked the house after the first showing, and had a couple follow-up questions. At the top of the list was the house’s legal status: the owner had checked “yes” next to the box on the MLS input sheet asking if the home “was in foreclosure or lender owned.”
When I called the FSBO owner and asked her for foreclosure details, she was dumbfounded. “It’s absolutely not in foreclosure,” the owner protested. I then told her to look at the MLS listing, which indicated otherwise. The next thing I heard was “click.” Sure enough, when I checked the listing on MLS the next day, the “yes” had been changed to “no.”
Market Debuts: Sizzling . . . or Fizzling?
Unfortunately, by then the damage had already been done.
Just as people never get a second chance to make a first impression, neither do homes.
In the two weeks since this particular home came on the market, how many prospective Buyers passed because they didn’t want the headache of dealing with a foreclosure property? Banks can be notoriously slow to respond to offers on such properties, and imperiled homeowners benefit from a number of statutory remedies (right of redemption, right of reinstatement, etc.) that can put a legal cloud over any deal.
In addition, many Buyers have come to associate foreclosures with, shall we say, less than pristine condition.
Yes, it was a bit puzzling that the home looked so flattering in the interior pictures, some Buyers may have thought to themselves — but so do lots of homes these days that turn out to be not exactly as advertised in person (see my Aug. 22 post, “Homes Getting Bigger . . Online“).
The fact that it was a FSBO only made matters worse. Experienced realtors know that, with no realtor on the other side to help move things along, they’ll be doing twice as much work, for the same amount of money. Scratch some more showings.
Which brings us back to the hapless FSBO, and exactly how much they “saved” by not listing with an agent.
Like most FSBO’s, they weren’t trying to avoid paying any commission at all, just the roughly half that goes to the listing agent. They were still offering the standard “payout” to the Buyer’s agent (failing to do otherwise would be seriously shooting themselves in the foot).
Net commission saved: 3.3%.
Compare that with the cost of squandering their first two (and most important) weeks of market exposure: perhaps as high as 3%-5%, or . . . what they would have paid a realtor to handle everything for them!
And that’s just one mistake. This particular FSBO doesn’t even have an offer yet (my client passed). Still ahead: arranging (still more) showings; setting up more flyers and advertising; procuring the right disclosures and contracts (and competently completing them); finding a good title company to handle the closing, etc.
So is this FSBO really going to come out ahead? You tell me.