How to Sell a House by Owner-Some Hurdles.

Selling Your House by Owner-Some Hurdles

I’ve worked with a lot of For-Sale-By-Owners. They are generally a pleasure to work with. Some do very well on their own; most do not.

This article is part of a series on selling your own house. See the intro: House For Sale By Owner-Home Selling Process.

Selling your house by owner has a lot of pitfalls. I discuss some of them here. If you still chose to sell your own home, then see my next article  How to Sell by Owner – 20 Tips.  This one gives some solid advice on how to sell your home yourself.

Mid 2014 Update: This article was written a couple of years ago. It’s a new world now in Houston real estate, especially in areas like the Heights.

Let’s hope your case is much more cheerful than this!

Houston FSBO’s sell on their own for a variety of reasons. The most common are:

• They have little or no equity, so they can’t afford a commission. That is understandable.
• They want to save money. They will work with Realtors, but don’t want to pay a full listing commission. This is okay too.
• They have an attitude of: “Let’s give it a try. How difficult can it be? If I don’t sell it, I’ll list with a Realtor”. These people are fun to work with. They appreciate any info and advice you offer.
• They don’t like Realtors and they don’t want to pay anyone a commission! All right. Let’s leave these people alone. There are a lot of other properties to show.

I have had many experiences with FSBO’s; here are some:

• I too sold on my own. I had 2 properties I wanted to sell. A rental in Bear Creek and a Galveston beach house. I gave myself 2 months to sell both, at which time I would list them. The beach house I sold fairly quickly (that surprised me-I thought it would be a pain to meet people an hour away to show). The Bear Creek house though didn’t sell in my allotted time. I listed it on MLS and another Realtor brought me a contract within a week. I was happy to pay 3%. I wish I had done it 2 months earlier.
• Buyers generally don’t want to mess with owners. They are afraid of being taken advantage of, or they don’t have time to deal with it. They want their Realtor to find out about it and decide if it fits their needs.
• Most Realtors don’t want to mess with individual owners either. Even if they do, they must spend a lot of time finding out about you, the house and terms of sale. This isn’t personal; it is just inefficient to deal with. Even if we do work with you (as I often do) we won’t remember your house. When I make appointments to show 4-6 houses, I don’t normally remember that FSBO, if it is not on MLS
• Buyers get the experience, expertise, and guidance of a Realtor for free. Why would they hunt down signs off the street?
• NAR (National Association of Realtors) says that only15% of For Sale by Owners are successful. The other 85% take the house off the market, or list with a realtor.
• Owners don’t answer the phone! They either don’t return calls or they call back days later. I’m sorry, but that is too late. Recently on my third trip with a couple in Rice Military, I made appointments for 5 homes. There was also an individual I tried to show. When the owner called back the next day to say we could look at it, it was too late. We had already written an offer. Would he have sold it if he had shown it? We’ll never know.
• Buyers know you are saving the commission too, so they also want the savings. They expect you to come off the prices more than normal. After all, aren’t you saving 3-6%?
• Buyers are nice and don’t want to hurt your feelings. They will say, “It’s nice, we’ll get back to you”, but they won’t. They will tell a realtor their true feelings (It smells like dogs, It’s overpriced, it was too cluttered to really see it, etc.,) but they don’t tell the owner. This may save your feelings, but it doesn’t help you make the necessary changes.
• You have to kiss a lot of frogs. I would guess I show the typical, knowledgeable buyer 20 homes before they find the one they like and buy. Knowledgeable means they are familiar with the market; they’ve done their Internet homework; they have a good idea of what and where to buy. This is roughly true of listings too. If a house is shown 20 times, there should be an offer or serious inquiries, or something is wrong. Something has to be done to make that sale happen. I would think your numbers would be a little worse though, Buyers wouldn’t be as familiar with your house compared to one being marketed professionally though. So, get those 20+ people in there!

A Couple of Examples: I have a friend now, who I met when he was selling a house on his own. I couldn’t convince James at the time to let me help him. It took a while, but he sold his house to a builder. He did save 3-6% commission, but he sold his home for 10-15% under what he should have gotten for it. He also tortured himself for a long time before it sold. He knows better now and recommends me to his friends. Good advice is priceless.

I called on another Spring Branch homeowner whose house had been on the market forever. She was ecstatic! She had the house under contract, and she had done it herself! She said it took 2 years, and for the last 6 month had been driving from Conroe to show her Ridgecrest home!? I asked if she was happy with the price. She said she didn’t know or care; she was just glad to be rid of that damned house! So, have a game plan before venturing into this process. So, again…did she have the right plan for selling her home?

Success story:

I have several friends (investors or landlords) that have successfully sold several homes. I help them with pricing, with the understanding that if they get frustrated, or give up, they will list with me. That’s fair. They know what they are doing. They can get advice from me. They recommend me to others. We buy each other lunch when it’s over.

Conclusion:

Go forth armed with knowledge and confidence. Just be aware of what your competition is doing (100’s of realtors, all driving Buyers around) and figure out how to fit into that picture. Make sure you read my Tips Offered to For Sale By Owners.

If you are selling land For-Sale-By-Owner check out my 3rd particle on FSBO’s ; Selling Land FSBO
Anyway, I hope this helps. Call if you have questions. No pressure or BS, maybe I can be of help….Rich