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Reasons For Sale By Owners Are Not Successful

by | Dec 29, 2020 | Selling

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A FSBO (for-sale-by-owner) is when a homeowner sells their home without the help of a real estate agent. Often time, there are many reasons for sale by owners are not successful. In theory, it sounds like a good idea to sell a home for-sale-by-owner because it’s possible to save money since the seller doesn’t have to pay a commission. 6% commission can stack up to a home seller being able to save thousands. However, the statistics for FSBO sellers are grim. Only about 10% of them sell according to a study conducted by the NAR.

There are many reasons why people fail to sell by owner ranging from the home being priced incorrectly to not screening a potential buyer appropriately. It’s important to know the top reasons for sale by owners are not successful.

1. Failure to prepare the property correctly

A home needs to be appealing to buyers, otherwise no one will want to put an offer in on it. And if they do, expect a lower offer as the new buyer will need to put in work to make the place nicer. Getting the house ready to sell is crucially important to the success of selling by owner. This will certainly involve:

  • Doing repairs – expect to paint, fix toilets, patch holes in the walls, etc. as all of those items can cause buyers to turn away.
  • Removing clutter – get rid of old furniture, clutter, family photos, etc.
  • Look at neglected areas – Make sure anything on a to do list that might have been put off gets done. Maybe there is wallpaper in a spare room that needs to be removed or a room with holes in the walls.
  • Clean – hire a professional cleaning service to make sure the home is as clean as possible.

2. No real estate marketing experience

If the FSBO property isn’t marketed correctly, and to the right people, it will probably never sell. A real estate agent specializes in doing this correctly while a common person most likely won’t. Primarily, real estate agents’ main marketing tool is having access to the MLS. The MLS is where most homes are bought and sold. 

Additionally, homes listed on the multiple listing service (MLS) get syndicated to the majority of the big websites such as Zillow and However, Zillow has a feature that allows people selling by owner to advertise their home on the platform.

3. Dealing with buyers

One of the main duties of a real estate broker is handling the process of dealing with buyers. If FSBO homes actually get buyer inquiries from their marketing efforts, then the seller will need to be able to stay on top of the calls and emails. They’ll also have to be able to show the property when it’s convenient for potential buyers.

Another problem is spending time talking to buyers that aren’t even in a position to buy. FSBO sellers need to understand that if someone wants to purchase their home, they’ll need to be pre-approved for a loan. Sometimes they even need to sell their house first.

In addition to handling buyer inquiries, an agent also prices the home as accurately as possible. This can be difficult for FSBO sellers as they are not able to find the appropriate comparable homes. Negotiations over price can be problematic if the home is priced inaccurately.

Also, when dealing with buyers, there will need to be an understanding of real estate contracts. This can be an issue for FSBO sellers. Someone who isn’t familiar with real estate contracts might find them confusing and could end up not getting the best deal for their efforts. Contracts need to be paid special attention to if the deal is going to close successfully.

What to do when FSBO isn’t working?

If a FSBO isn’t working, then it’s time to revisit other options regarding the property. Below are some options to take into consideration.

  • Rent the home long term – Depending on the market and the sellers circumstances, it might be best to prep the home for a long term lease. This can be lucrative as the homeowner is finding someone else to pay the mortgage on their behalf, and if the rent is high enough, can net the owner a little bit of cash flow too.
  • Turn the home into a short-term rental – In addition to long-term rentals, short-term rentals can also be lucrative as they have the potential to net more monthly income. This is because the nightly rate is higher than it would be if it were a long-term rental. However, it’s important to note that there might be more overhead with this approach such as maid services.

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The information contained in this blog is for general information purposes only, and while believed to be accurate, Trelora assumes no legal responsibility for accuracy. Information provided within should not relied upon as legal advice. Please consult with your local advisors for independent information regarding availability and applicability in your market.