Top 10 reasons why FSBOs fail

Top 10 reasons why FSBOs fail

Reason For Sale By Owners Fail

Top Reasons Why FSBOs Fail

What is a FSBO?

A FSBO, also known as a for sale by owner, can easily be described as a homeowner selling their property without the representation of a real estate agent or broker. 

There are many reasons why homeowners attempt to sell their home on their own.  A few of the most popular reasons for FSBOs are, they want to save the money that would be spent on real estate commissions or that they feel they don’t need a real estate professional to sell their home.  No matter the reason, according to the National Association of Realtors, less than 10% of FSBOs actually sell.

Whether it is because the FSBO doesn’t understand how to price their home or whether it’s because they don’t know how to screen potential buyers, it’s important that if you decide to sell your home by yourself, you know what the top 10 reasons for failure are.

By knowing and eliminating the top 10 reasons below, can increase the chances that you can successfully sell your home by yourself to become one of the 10 percent success ratio.

FSBOs Don’t Know How To Prepare The Home Correctly Before Listing For Sale

Properly preparing a home for sale plays a huge role in the success of selling homes, whether FSBO or not.  One of the most common reasons why FSBOs fail in real estate is because the homeowner has no idea how to properly prepare before it is listed for sale.

Listing a home for sale before it is ready can be detrimental to the chances it actually sells.  It’s very important that if you’re planning on selling your home by yourself without professional representation, you don’t list your home for sale before it’s ready!

There are many home sale preparation tips that should be followed by FSBOs. Some of the most important pre-listing tasks that FSBOs should do before listing their home for sale, include;

  • Decluttering
  • Freshly paint rooms
  • Professionally clean carpets and/or floors
  • Complete any neglected repairs
  • Replace outdated light fixtures
  • Make sure your home has good curb appeal

We have included our very own comprehensive selling guide  to help and assist you at no cost. The above home preparation tips will greatly increase the chances of a successful FSBO.  Remember, when it comes to selling a home, there is only one chance to make a first impression and by neglecting these home sale preparation tips, you could be costing yourself a sale.

FSBOs Don’t Know How To Screen Potentials Buyers

A top real estate agent over time learns how to screen potential buyers.  One of the biggest reasons why FSBOs fail in real estate is because the homeowner has no clue what questions they should be asking or how to screen the potential buyers.

FSBOs will often waste countless hours having unqualified buyers walking through their home because they don’t know how to ensure they are pre-approved or at the very least, pre-qualified.  Many FSBOs don’t even realize there is a difference between a pre-approval and pre-qualification.  It’s important that if your planning on selling your home by yourself, you know the difference between a pre-approval and pre-qualification, but also know how to find out if the buyer is even able to purchase your home.

A strong suggestion for any FSBO is to have a connection with a local mortgage consultant or representative.  If potential buyers inquire about your home, one of the first questions should be, “have you been pre-approved for a mortgage?”  If they have not, you should insist before you’re able to have them view your home, they speak with a mortgage consultant and you’d be happy to give them a recommendation.

Hillis Real Estate Group

Qualifying real buyers is essential. Security & safety are real concerns.

FSBOs Aren’t Able To Be Available To Handle Property Inquiries

Many FSBOs believe that real estate agents make boatloads of money and don’t have to work many hours to do so.  This is one of the most common real estate myths that exists.  The fact is, real estate agents spend much of their day handling inquiries on their listings from buyers and also coordinating showings for their listings.

One of the biggest reasons why FSBOs fail in real estate is because the homeowner doesn’t have the time or availability to handle inquiries on their home or time to show it.  Home buyers and buyers agents want quick responses on their inquiries, otherwise, they will often move onto the next potential property.

Many FSBOs aren’t able to answer showing requests and property inquiries. Whether it’s because they have a full-time job or because they are simply not good at answering their phone or e-mails, not having the availability to answer these inquiries is a huge reason why FSBOs fail in real estate.

FSBOs Don’t Allow Potential Buyers To View The Home Without Pressure

Without a doubt, one of the primary reasons FSBOs fail in real estate is because the homeowner doesn’t allow a potential buyer to have space as they view their home.  Most home buyers do not like to be pressured when looking at a home. Most home buyers don’t want the owners present!

It’s suggested that if you are going to sell your home without representation from a professional, you give space to the potential home buyer.  Allowing the buyer to view your home without being sold on how great your home is will actually go a long way.  Giving a potential home buyer space allows them to be able to speak openly about the property without worrying that they will hurt the homeowners feelings.

FSBOs Don’t Know How To Negotiate With Potential Buyers Offers/Contract

Although the initial licensing process for an agent is not difficult, a top producing veteran real estate broker has earned their expertise & ranking through years of successful negotiations, professional designation courses and certifications. One of the most important things learned throughout the process pertains to real estate contracts and contract law.  Real estate contracts can be confusing which is why it is one of the top reasons FSBOs fail in real estate.

A FSBO who doesn’t have a strong understanding of a real estate contract may not know what they are agreeing too and the possibility exists they don’t know how to negotiate specific parts of the contract.  Real estate contracts are loaded with lots of clauses, timelines, and also many common contract contingencies, such as mortgages and inspections which are legally bound and time sensitive.

It’s important that if you plan on selling your home by yourself, you understand that the contract is more involved than just the price the buyer is offering.  Certainly the offer price is important, but the fact a contract has fewer contingencies should also not be ignored.

FSBOs Don’t Know How To Handle The Home Inspection Findings

Most home buyers want to have a home inspection and there are many reasons why a home buyer should have a home inspection when buying a home.  One of the most common reasons why FSBOs fail in real estate is because the homeowner does not know how to handle the home inspection phase of the real estate transaction. As a homeowner selling your own home, you have a legal accountability which should not be taken lightly. Avoid being sued by home buyers.

The likelihood that a home inspector is going to find something wrong with any home is strong.  Certainly there are some homes that will have fewer home inspection findings, however, even newly built homes will likely have “issues.”

FSBOs often believe that there is nothing wrong with their home which is why it’s upsetting when the buyer requests items to be corrected or fixed before moving forward with the transaction.  This can often lead to the FSBO refusing to correct or fix any items, which is a great way to scare away a potential home buyer.

FSBOs Aren’t Willing To (Or Able To) Pay A Commission To A Buyers Agent

Another common reason why FSBOs are unsuccessful is because the homeowner is not willing to pay a buyers agent a commission.  A FSBO is able to save the commission they would have to pay a listing broker and some are willing to pay a buyers representative, which is a smart idea.  FSBOs who are unwilling to pay a buyers agent a commission will greatly reduce the chance of a successful sale.

Most home buyers want to have a buyers agent when buying a home.  A FSBO who is unwilling to pay even a buyers agent a commission is eliminating a significant number of potential buyers. Most home buyers want a buyers agent.

If you must attempt to sell your home without a professional real estate agent or broker, which is never suggested, agreeing to pay a buyers agent is a very smart decision.

FSBOs Home Is Lacking Exposure

One of the biggest reasons FSBOs fail in real estate is because the homeowner is not able to get their home in front of enough potential home buyers.  There are websites that allow FSBOs to list their home for sale, however, there are also some websites that will not allow FSBOs to market their home.

Hillis Real Estate Group

Prepare a strategic marketing and advertising plan.

A top producing broker should be able to give their seller’s home tons of exposure.  Whether it’s online exposure or exposure in the local real estate section of the newspaper, Realtors have the tools to provide exposure that FSBOs do not.  The use of cutting-edge technology and a comprehensive marketing plan are just a couple of things that sellers should expect when they hire a broker to sell their home.

The FSBO Incorrectly Prices Their Home

Learning how to properly price real estate takes lots of practice and experience.  One of the biggest reasons why FSBOs fail in real estate is because the homeowner incorrectly prices their home.  There are many factors to consider when pricing a home for sale, many of which are not taken into account by a FSBO.

It’s fairly common that FSBOs price their home too high, which can significantly hinder the chances the home sells.  If you decide to attempt the sale of your home without a realtor/broker, you should consider having an appraisal completed on your home.  An appraisal can help verify that the price you’re thinking of listing your home for sale at, is in line with what an appraiser indicates your home is worth.

FSBOs Don’t Know How To Ensure The Deal Actually Closes

Once a purchase offer is accepted on a piece of real estate, there are many things that will still need to be completed prior to the closing.  Another common reason why FSBOs fail is because the homeowner doesn’t know what to do after accepting the offer and the ball is dropped somewhere along the line.

There are specific timelines that should be followed as well as specific tasks that need to be completed by different parties.  Many times a FSBO doesn’t understand who needs to be doing what and when the tasks should be completed.

If you decide to sell your home by owner, some of the tasks that need to be completed prior to closing include;

  • Buyer obtains written mortgage commitment
  • Inspections are completed within allotted time
  • Attorney(s) approve contracts
  • Instrument survey is ordered
  • Title work is reviewed
  • Abstract is re-dated

Final Thoughts

Before you decide to sell your home by owner, remember, the chance you will be successful is less than 10%.  If you decide you want to take on the challenge, make sure you are aware of the above common reasons why FSBOs fail in real estate.  FSBOs who understand what the most common pitfalls will greatly increase the chance that they have a successful sale.

Are you a homeowner and are thinking of selling your home without a broker/realtor representation?  Have you attempted to sell your home by owner and failed?  If you were unsuccessful, we’d love the opportunity to talk with you about your real estate plans and objectives. Contact us at so we can decide whether there would be a mutual benefit of working together on the sale of your home. We offer multiple package choices for sellers to suit your budget.

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