Why homes for sale by owner are usually sold by REALTORS®

If you are thinking about selling your home yourself, you probably can.

Maybe. There are reasons most of the homes end up with a REALTOR® whose job it is to find a buyer and negotiate a lot of paper work and complete the sale.

FSBOs are not in the Multiple Listing Service (MLS) because the membership organizations are open only to licensed real estate brokers and agents who subscribe to a code of ethics. In Spokane, this would keep a potential seller from having a REALTOR® showcase their home to other agents via the Multiple Listing Service of the Spokane Association of REALTORS®.

There is nothing to keep a homeowner from putting a FSBO sign in the yard or advertising the sale in the local newspapers, but the home won’t receive nearly as much attention as it would through the multiple listing that in Spokane currently goes to more than 1,900 licensed brokers and agents. These professionals work with buyers and sellers and generally have contacts that may be looking for a place just like the FSBO home.

Agents generally will not show FSBO homes. There is a good reason. The buyer’s agent usually earns a percentage of the commission that the seller pays the listing agent. Without the listing agreement, the buyer’s agent has no guarantee he will be compensated for his or her services. The bottom line is a large group of potential buyers for FSBO homes is limited primarily to being underrepresented and properly unqualified prospects.

Sure, anyone can sell a home, but when you look at the option clearly, why would you want to? FSBOs generally overprice their home. Without comparative analysis of other similar homes in the area that have actually sold, it would be an easy mistake. Most FSBOs honestly usually believe their home is better than others in their area — and sometimes they are wrong.

A REALTOR® can save time. They can provide the seller with an update on market conditions, the likely selling price of the home and provide tips for showcasing the home’s buyer appeal. An overpriced home generally won’t sell until the market catches up with the asking price.

Legal trouble is another maybe. Unwary sellers could be setting themselves up for potential liability, such as the extensive disclosure requirements and signatures necessary.

Overlooking even one required form or legally mandated disclosure could be the source of a lawsuit after the transaction closes.

Also, there is the privacy question while the FSBO is on the market. When a home is listed with a REALTOR®, there would be no 10:30 p.m. knock on the door to see the home. If you are comfortable with that kind of interruption, maybe it would be OK.

However, the FSBO is still stuck with a tough problem to solve. He will be doing all of this himself, showing the home at all hours, keeping the place spic and span, spending weekends hopefully showing the home, etc. Time will not be the do-it-yourselfer’s own.

You may sell the home, but the odds are that the buyer will negotiate the commission the REALTOR® would have gotten had he or she done everything that is taking your weekends and evenings. The REALTOR® would have done it all — marketing, advertising, negotiating, providing necessary purchase and sale agreements, etc.

According to a survey done a few years ago of home buyers and sellers by the National Association of REALTORS®, 81 percent of respondents sold their homes through a real estate professional. Of that group, 8 percent tried unsuccessfully to sell on their own. Fifteen percent of the respondents sold their own homes.

The proportion of people selling their own home has been steadily declining over the past decade. Among the major problems cited were arranging for appraisals and inspections, understanding and performing paperwork, and having the time to devote to the many necessary steps in selling a home that a real estate professional specializes in.