For Sale By Owner Mistakes to always avoid (Updated 2023)


Thinking of selling your home yourself and saving on real estate commissions?  According to Redfin, “one in five sellers forgo the help of a full service agent”.  Similarly, the National Association of Realtors stated that 8% of home sales were sold as FSBO’s in 2020.  However, you don’t want to be making these mistakes when selling your home yourself.

Jordan Linville sold his last two houses via FSBO.  He states,

“Selling my house without a Realtor® was a lot of work.  I’d estimate it took +30 hours each time. However, I’ve saved over $25,000 in aggregate, so for me… FSBO was worth it.”

We asked several real estate professionals two questions. “What were some of the mistakes they saw sellers make when selling their home by owner?  And how can they fix them?”  These professionals included Realtors®, FSBO companies and real estate investors. To reduce bias, we eliminated responses from those only said, “You should always use a real estate agent” or “Price it right”.

We found 5 reoccurring  FSBO mistakes that sellers make.

Top 5 FSBO Mistakes

Lack of Professionalism

Buyers and their agents are looking for responsive sellers.  Buyers are watching internet sites like Zillow.com, Realtor.com and the Multiple Listing Service (MLS) for houses that meet their buying criteria.  In hot or in-demand-markets like we’ve seen since COVID, nice homes sell quickly, and buyers are looking to see prospective houses as soon as they are listed for sale.  As a seller, you must quickly respond to inquiries.  Linville says, “If you or someone you know can’t respond to phone calls and emails quickly, for sale by owner may not be for you.  You’ve got to be quick and professional.”

“If you or someone you know can’t respond to phone calls and emails quickly, for sale by owner may not be for you.” – Jordan Linville

Bad Photos

Buyers today make a decision from the pictures they see online if they want to see your house.  Bad photos can make or break their opinion.  Linville says,

“Realtors spend a lot of time making sure your house looks great – you should, too.”

It can be tempting to pull out your phone and take your own pictures.  However, that may be the only time potential buyers ever look at your house.  It is well worth it to pay the money to have professional photographs taken.  Typically it costs less than $175 to hire a professional photographer.

I have a professional real estate friend who feels very strongly about professional photos.  She hires two different photographers to shoot pictures of every house she sells.  She then chooses from the best pictures for her listings.  Her thinking, “all it takes is one bad picture to turn a potential buyer away.”  I can concur.  While I don’t normally hire two photographers, I have hired a second photographer when I felt the first set of pictures didn’t show the house well.  With the Internet, it’s the first, and maybe the last time I will ever get to present my house to potential buyers.

Not Willing to pay Market Commissions to the Buyer’s Agent

Every listing in the MLS tells real estate agents what commission the buyer is willing to pay an agent for bringing them a buyer.  Market commissions can vary from region to region and between economic cycles.  If a real estate agent sees a listing with below market commissions, they will be less inclined to show a house. Early White of HouseHeroes.com  says, “Buyer’s agents hesitate to show a house if they believe they will get below market rate commissions.  Explicitly state in the listing “3% commission to buyer’s agents” so buyer agents know they will be compensated at market rates.”  This ability to choose between what houses agents want to show has become the basis of a class action lawsuit against the National Association of Realtors.  You may not like it, but if you want to sell your house yourself, you need to pay buyers’ agents going commission rates.

“Buyer’s agents hesitate to show a house if they believe they will get below market rate commissions.” – Earl White

Making Home Difficult to Show

Your goal is to get as many prospective buyers to see your house as possible.  This means allowing agents easy access to show the inside of your house.  Nathan Garret a real estate broker in Louisville, KY says you should “Always accommodate for showings. Don’t jeopardize losing a serious and motivated buyer because they were unable to view the property.”

“Don’t jeopardize losing a serious and motivated buyer because they were unable to view the property.” – Nathan Garret

Real estate salespeople use special Realtor® lock boxes that allow them to get a key to show your home.  You can often obtain these through what is known as a flat fee listing service for a nominal fee.  In addition to the Realtor® lock box, flat fee listing services will also list your property for you in the Multiple Listing Service (MLS).  This service is subscribed to by real estate professionals and will be the first place your buyer’s agents will be looking for your home.  Additionally, most MLS services also push their sales data to hundreds of other real estate sites, such as Zillow.  This feature can save you both time and created added exposure to potential buyers.

Not Communicating they are Willing to work with Realtors®

Many sellers believe that real estate agents are not willing to work with FSBOs.  Irene Keene with Coldwell Banker in Madison, WI states, “It’s a misconception that real estate salespersons are reluctant to work with homeowners who wish to sell on their own. Our fiduciary duty is to our clients.”

“Make a note in any online/printed ads that they are willing to work with agents” – Koki Adasi

Koki Adasi with Compass Real Estate, a real estate broker in Washington DC says that “owners should make a note in any online/printed ads that they are willing to work with agents.  They should also have the necessary agreements in place with commission and any other details stated that can be signed by both parties”.  If you use a flat fee listing service, be sure to have the service include this information in the MLS listing.

Conclusion

If you’re looking to sell your home on your own, you may be able to save several thousand dollars in commission.  First, hire a professional photographer to photograph you home.  Then, be sure to show your professionalism by paying market commissions to buyers’ agents.  Look for a flat fee listing service who will provide you both the listing on the MLS, but will also provide you with the Realtor® lock box and make sure your listing is syndicated to other real estate sites.  Lastly, make sure you clearly communicate that you’re willing to work with buyer’s agents.