Here is a video created by Kitchener Real Estate Board about the FSBO sellers who listed with a Realtor afterwards:
FOR SALE BY THE OWNER: IS IT WORTH IT ?
Many sellers are tempted to sell their properties themselves to avoid or reduce real estate commissions. These sellers are getting help from Internet marketers and businesses that offer “For Sale” signs to place on the lawn. This has been going on for years, and the main lesson learned over time is that people selling their own homes rarely get as much for a home as real estate salespeople do.
Most FSBO sales systems, either Internet or the sign-on-the-lawn method, will effectively reach only twenty percent of the potential buyers out there. Who can afford to miss eighty percent of potential customers? In addition, more than sixty percent of all For Sale By Owner properties are sold to friends and family.
If an FSBO property doesn’t sell in the first five weeks, the net sale price for the home is even less.
In conclusion, research shows FSBO homes sell for less.
BUT WHY ?
When buyers see that a seller is not using a salesperson, they want to “share” in the potential commission savings.
FSBO sellers don’t have the benefit of an up-to-date marketing report, so they don’t know what their home is really worth.
Most sellers want to believe their property is special, so they “test” the market with prices that are usually ten to twenty percent higher than the price of comparable properties.
None of the FSBO kits give sellers the ability to reach as many buyers and sellers as the traditional Setup.
Another pitfall of FSBO is exposure to unqualified buyers. There are people that do not meet the financial criteria to buy a house. Ultimately, they waste the seller's time and effort and sometimes lost opportunities. For example, an unqualified buyer makes a conditional offer to buy a house and after two weeks it's revealed that they don't qualify. During those two weeks there could have been other potential offers.
THE F STATE:
If someone tries to sell their home without a salesperson, they won't be prepared for the negative comments buyers typically will make when they tour the home.
There can be this stress of presentation of offers and the sign-back process. When an offer is presented, and every time that offer goes back and forth between buyer and seller, many legal rights and obligations come into play.
Most sellers and buyers are in an emotional state. Mark Weisleder, a leading real estate consultant refers to this as the "F state"— they are usually frustrated, frantic, and flustered. (The advice of an objective, calm, knowledgeable professional, like myself, at this critical moment is essential. This is where top salespersons demonstrate their worth every time).
People who sell their own homes are often unaware of their legal obligation to disclose hidden physical defects in their property. At present these defects include a leaky roof or basement, a furnace that's not working properly, and a basement apartment that does not comply with local fire code or zoning bylaws. On top of that there's disclosure obligations that continue to evolve, such as in grow houses. It is imperative that you explain this to your potential clients very clearly.
Legal proceedings can take four to six years. All these nightmares are possible when a person tries to sell their house without professional advice.
Two simple principles about purchasing anything: "You get what you pay for" and "Those who act for themselves typically have a fool for a client."
The cold reality is that unless a seller has friends or family willing to buy their home, their chances of selling and saving the average real estate commission is slim at best.
Sellers lose more in their net sale price than they save on real estate commission, and they're vulnerable to legal claims after closing.
A real estate transaction can be the most expensive transaction most common people make. "Is this worth risking?"
LAWYER VS A REALTOR:
Some sellers believe that a lawyer should be the only person negotiating the agreement of purchase and sale. But lawyers are not real estate salespersons; nor are they marketers. They don't have experience in preparing a property for sale, and often they have no real idea of what a property is worth, after all they studied law not real estate.
When it comes to real estate, there is a saying: "Lawyers kill deals."
There is some element of truth to this.
Lawyers know that if any error or omission is made in a proposed agreement of purchase and sale that they negotiate, the lawyer will be held responsible. So they protect themselves by sometimes adding unnecessary representations and warranties to protect the buyer. Often the representations and warranties lead to a breakdown of the negotiations. In other words, they make things more complicated than they have to be.
There are of course times when legal advice should be sought,
SO TO SUM IT UP:
FSBO systems, in general, produce a net loss to sellers
At most, FSBO systems reach twenty percent of the potential buyers in your area.
Forty percent of FSBO sellers end up selling to family or friends.
FSBO sellers are vulnerable to claims by buyers after closing, especially regarding non-disclosure of defects in the home.
FSBO sellers will have to cope with aggravating phone calls from unqualified buyers, and with negative comments made by buyers during home tours.
FSBO sellers will also have to cope with emotional late-night negotiations.
About 80% of the sales are done with the involvement of a Co-operating Broker so the savings are only on the Listing End.
Even with the Seller Doing all the Hardwork there is still a fair amount of cost involved like paying for the FSBO signs, Pictures, riders & MLS Posting Fee.
A Realtor when they take your listing they do provide all the Services for you & way more & If your Property is not sold then it does not even cost you a Penny. Our Commission is only due when the Job is done.
With Someone like Me you do get the Full Service Package & you only pay 1% to me . If I sell it to a Buyer who is not represented by another agent then you pay just 1% Total Commission. But the Property is exposed to any & every potential buyer & Co-operating Agents are Still Welcomed like most of the FSBO’s. So is it really worth doing all of it to save the 1% minus the FSBO expense’s Saving ?
Call me for further Details.