FOR SALE
BY OWNER (FSBO)
Is it for me?
If you ever owned a home and had to sell it, you may
question why must I pay someone 6% commission just to put a sign in my front
yard to sell my home? Well that’s
exactly what Colby Sambrotto, the founder and former CEO of forsalebyowner.com
preached. He believed in selling your
home without a real estate agent and showed you how you could do it yourself
and save thousands if not tens of thousands of dollars doing it.
The Wall Street
Journal, recently wrote a story about how Colby Sambrotto had to hire a
broker and paid 6% commission in order to sell his own home after failing
himself at what he preached and taught others to do.
Here’s two of his myths:
Myth #1 – You Will
Pocket More Money Selling on Your Own
This is a common tune sung throughout any FSBO sites you
visit. So what happened in Sambrotto’s
case?
From the WSJ article:
By May, it went into contract, he said, after attracting multiple offers. It closed in the last few days for $150,000 more than the original asking price.”
Wait, what? Had he been able to sell his home on his own he would have lost $150,000! By waiting to hire a professional, it also cost him additional monthly interest for each month he remained in the home. I bet that was more than the 6% the real estate professional would have received.
Myth #2 – The Internet Alone Can Sell Your Home
The internet has certainly played a huge roll in “marketing” your home by giving it a greater exposure. People can sit back in their recliners at 1:00 a.m. and search for property. So, if this is true as he preaches, why didn’t it work for him?
From the WSJ article:
“Looking to move his family to the suburbs, [Mr. Sambrotto] said he carefully staged his apartment for sale himself, and put it on the market. But after using a mix of websites to publicize his apartment, he said he had only ‘middling successes and switched to a broker because many buyers were so reliant on brokers.”
Real Estate Agents are not going away. People rely on them to not only list their homes, but to find them homes. Potential buyers may miss your FSBO since it is not listed in the multiple listing services (MLS). Marketing falls back into your lap to hit the target audience.
When potential buyers are looking for property on the internet, they may gravitate to sites such as ZipRealty or Trulia and not think about looking for FSBO sites. In addition, they may not be comfortable representing themselves in such a huge investment. Real estate professionals are trained and will seek to protect you and your best interests. When you preview a property, they may see a potential hazard or problem you may not have known on your own and will request the proper disclosures and/or inspections. I personally know someone who sold their home without a real estate professional and failed to disclose properly a water leak/problem they had. Long story short, there was mold that was not disclosed and they ended up being sued for tens of thousands of dollars. Again, losing a huge chunk of money they “saved” by doing it on their own.
Bottomline
Why would you risk one of your largest investments? Use the internet to educate yourself, be able to ask questions to the real estate professionals you interview. But don’t risk everything, use a trained professional. When looking for a Real Estate Agent, ask your friends, family, or use YELP or some other search rating engine for a recommendation. Protect yourself and your investment! Align yourself with a licensed Realtor and Mortgage Loan Officer.
After all, you wouldn't perform open heart surgery just because some faceless stranger told you that you could save money by doing it yourself would you?