Homeowners trying to sell their homes on their own — for-sale-by-owners (FSBOs) — are driven by several reasons. Although most of them want to save money that they would have otherwise spent on real estate commissions, a few others take the FSBO route because they feel they don’t need a professional to sell their home.

This would be like doing your own taxes instead of hiring an accountant, or driving 20 miles out of the way to save a nickel per gallon of gas.

While there is always ways to save money by DIY and whatever the reason for attempting to sell solo might be, data from a National Association of Realtors survey shows that less than 10 percent of FSBOs actually sell.
Top reasons why FSBOs fail in real estate

There are a lot of reasons why FSBOs fail and do not sell. But the cumulative effect of all of this is – FSBO takes a lot of time to accomplish.

1.  Professionals in their own work  are the paid experts, but few people sell a home more than 6 times in their life. Being a busy professional, out earning the money to afford the move makes it easy to assume that selling your home is easy. The reality is – it is a complex network of people with their own negotiations and agendas.
•    The buyer, seeking the best possible deal.
•    The buyer’s agent, who represents the buyer’s best interest.
•    The buyer’s attorney (in some regions of the nation).
•    Home inspection companies, working for the buyer, which are likely to find some problem or the other with the house.
•    Your bank, in case it’s a short sale.
•    The appraiser, if the home’s value needs to be assessed.
Without the help of experienced real estate agents, dealing with so many different parties alone is often a tough task for even the hardened business professional to manage.

2.  Even with the help of a zillion articles in Google, understanding  the pre-sale tasks takes a professional eye.
A majority of homeowners don’t know about the prelisting tasks that FSBOs should do before they list their home for sale. These usually include:
•    Decluttering
•    Depersonalizing
•    Painting
•    Getting necessary repairs done
•    Getting the home floors and carpets cleaned by professions
•    Ensuring curb appeal of the home
•    Replacing outdated light fixtures

Because FSBO just have one chance to impress potential buyers, neglecting these home sale preparation tips often reduces the homeowners’ chances of selling the house.

3. Owners Do Not Know How to Screen Potential Buyers
FSBOs often have no idea about the difference between prequalification and preapproval, and they don’t know that buyers should ideally be preapproved but at least prequalified.

No wonder they let unqualified buyers inspect the house and waste their precious time. Not knowing if a buyer has the ability to purchase the home acts as a big deterrent for homes for sale by owners.
This can lead the FSBO seller into thinking they have to reduce price too quickly, take any deal tossed at them or get discouraged and not put the homes best features forward every single time.

4. Owners Fail to Solve Buyer’s Queries
Handling inquiries from buyers on their listings and coordinating showings for their homes are prerequisites for making a sale. However, many homeowners either aren’t able to handle such inquiries on their homes or don’t have the time for them.

Even organizing showings might become an uphill task at times. Because currently potential buyers and their agents want quick responses to their inquiries, they don’t think twice before moving on to the next potential property if their inquiries and requests are unanswered.

5. Owners Don't Understand the Concept of Golden Time
According to this concept, homeowners get the most money for their homes in the first week of putting the property on the market. The longer homes FSBO stay on the market, the less money people will be willing to offer for them.

If a buyer tries FSBO first and then hires an agent, the buyer would have already lost the “golden time” window. This will eliminate the buyers who have already viewed the home, might have offered unrealistically low prices and have already moved on.

6. Owners Fail to Understand Contract Procedures
The contract to buy a home involves much more than just the price offered by the buyer. Also, real estate contracts have lots of timelines and clauses and involve several common contract contingencies, such as inspections and mortgages.

Many FSBOs don’t have a firm understanding of such contracts and might not know what they are agreeing to or how to negotiate particular parts of the contract.
This can lead to costly misunderstandings, loss of the sale or time slippage on moving.

7. FSBOs Don't Know How to Handle the Home Inspection Findings
Home inspections almost always find some issues with houses even when they are relatively newer structures. In such cases, the buyer requests problems be fixed or corrected before moving forward with the transaction.
However, many FSBOs believe that there is nothing wrong with their home, which is why they refuse to address the issues brought forward by home inspections. As a result, the offer falls through.

8. FSBOs Incorrectly Price Their Homes
FSBOs often price their homes incorrectly due to lack of experience. They set the price too high, which hinders their chances of closing the deal.
Or they encounter the bottom-feeder buyer. The buyer that waits for the “golden time” to expire – just before listing with an agent – to offer a low offer with the promise you already “saved” the price of the agent.

9. FSBO Homes Lack Exposure
Homes for sale by owners are often listed on a few websites, but there are many that don’t allow FSBOs to list their property. Thus, FSBOs are unable to give their homes adequate exposure in the market.
However, when buyers hire a real estate agent, the professional can give a property online exposure as well as exposure in the local real estate segment of the newspaper. The agent even has tools to extend the exposure further, like their already developed buyer network, social media channels and NP Dodge’s strength of electronic presence.

10. FSBOs Fail in the Closing Process
Even after an offer is accepted, many things still need to be done prior to the closing. For instance:
•    Get the inspections completed within the allotted time.
•    Ensure the attorney(s) approve contracts.
•    Ensure that instrument survey is ordered.
•    Check if the buyer has obtained written mortgage commitment.
•    Find out if title work is reviewed.
•    Learn whether abstract is redated.

While selling your home FSBO sounds reasonable at the outset, the reality is it takes a tremendous amount of time, energy and knowledge to accomplish. This takes away from your work, family and preparing for the upcoming move.