That word almost sounds kind of funny, FSBO.
FSBO stands for for sale by owner, for sale by owner.
Now, let's talk about this.
What is a for sale by owner property?
Think about the words there, for sale by owner.
A for sale by owner is an owner of a house.
Let's assume this room is a house ... Is an owner of a house who says, you know what,
I don't want a realtor involved in this transaction.
I don't want a realtor anywhere near me.
I want to handle this myself.
Now, why would somebody do that?
Why would somebody not want the expertise of an experienced professional real estate
agent?
Why would a person not want these abilities of a professional?
Now, typically they don't hire a professional real estate agent because they're trying to
save on commission.
They're trying to save their money that would have been paid to a realtor when they pay
the commission.
They're trying to save some money and do the whole transaction themselves.
Put the house on the market, sell the house, run the contracts, close the deal, open escrow
- they're trying to do all these things that are or can be very complicating
by themselves with no experience.
Why in the heck would somebody want to do that?
Well, some people still do that to save commission, for sale by owner.
Now, why is that not such a good idea?
Now, let's think about this.
Why is that not such a good idea?
Ready, here it goes.
Owner of a house, "Honey, I want to sell the house.
Let's put the house on the market."
"All right, honey.
Let's do it.
Let's do it ourselves, for sale by owner."
"Okay, I'll put a sign in the front yard."
They walk out to the front yard, and they put a big stake and boom, and they put it
down, and they hammer it down.
It says for sale by owner, call me now.
That'll be like you trying to sell your car and putting a sign on the windshield and that
would be it.
Eventually, somebody would come around and make you an offer.
Wouldn't it be better if you advertise your car, I don't know, maybe on Craigslist?
Something that has been proven to be effective when it comes to selling property.
Same thing with for sale by owner, same thing with real estate.
By not having a real estate agent, you are not allowing this house to be promoted on
the MLS.
Are you kidding me?
You are not allowing this house to be listed on the MLS, the multiple listing service where
everybody goes or everybody visits when looking for property for sale.
You are limiting yourself, a for sale by owner person.
They are limiting themselves to the internet and to a sign in the front yard.
They are not allowing themselves to advertise on the most popular effective manner which
is the MLS.
Another reason a for sale by owner might want to consider hiring a real estate agent instead
of doing it themselves is because once you price a property, you might be pricing it
too low.
Most for sale by owner people, they don't know how to run comparables.
They don't know how to price a house.
They might say, "Oh, I think my house is worth $700,000 when it might be worth a million."
Why not hire a professional and allow them to give you their advice?
They know how to run comparables.
They have the equipment.
They have the knowledge.
They have the data.
The data, they have the data to put a comparative market analysis together, a CMA, a comparative
market analysis together on paper, review it, analyze this, and then come up with an
appropriate price for a home.
A for sale by owner doesn't have that ability, at least not the whole information.
Another thing is, let's assume they do get an offer, now we're going to open escrow.
Have you ever seen paperwork at an escrow deal?
Have you ever boughten a house and seen the paperwork involved in a escrow
transaction?
Oh, my god.
It's so overwhelming.
You're talking about the contract itself, the RPA, residential purchase agreement.
You're talking about disclosures.
You're talking about escrow instructions.
You're talking about the grand deed.
You're talking about important stuff, legal documents.
Now with the average person who's never sold a house before, how are they going
to be able to figure it all out?
It's almost impossible, yet they're trying to save themselves a few bucks.
I want to save myself some money, not hire an agent, and do all of this myself.
That's like trying to be your own mechanic.
I can figure this engine out myself.
I've never gone to a mechanic school, but I can figure this out.
Oh, are you kidding me?
Think about that.
Sure, it's a free country.
You can do what you want.
You can sell your house alone.
Sure.
Why would you?
Why not get the best of the best?
Hire a real estate agent to market it properly, to explain the process properly to you, to
defend you and to protect you when it comes to negotiations, to close the deal in a reasonable
amount of time and appropriately without any type of legal actions against you.
Why wouldn't you want it that way?
When it comes to the for sale by owners which we call FSBO's, all of you new agents out
there when you get your license and you see a for sale by owner, do yourself a favor,
better yet do them a favor, let them know the importance.