The housing market on Oahu is hot with many buyers for good condition homes in the central areas. And most sellers have the same objectives; to net the most money, to sell quickly, and in the most convenient way.
So, of course home sellers would like to save money by not paying those “exorbitant” real estate fees for “nothing.” Many consider the idea of a For Sale By Owner. And, any Realtor you ask will offer up a compelling argument against it because they know the value of their work, and they’d really like to get paid to list your home for sale.
So, What’s the Real Deal About FSBOs?
1) It’s more work than you think. It’s not hard to put an ad on Craigslist, throw open the doors, and put up a sign. It’s the contract process and unexpected problems that stump most people. Do you know how to find out if the buyer is qualified? Do you know what to do when the appraisal doesn’t match the contract price? How about getting an encroachment agreement? Consider what it will cost you in both time and money to figure it out.
2) No problem. You’ll pay half the usual commission to the buyer’s agent and let her figure it out. At least you got a 50% discount. Of course she’ll take care of it... to her own client’s benefit. She represents the buyer. You’re on your own, and up against a pro. And, by the way, she knows going in that she’ll be doing more than half the work, so that discount probably isn’t going to work out in your favor.
3) If it turns out to be easy, you probably left money on the table, but if you don't regularly sell in your market, you may not even know it. You place the ad, open the doors, and in a single day you receive 5 offers. That’s a problem. A good problem to have, but a problem. With all the ways a buyer has to cancel a contract unscathed in Hawaii, how do you choose the one most likely to stick? How are you going to negotiate 5 offers at once, get the best price possible, and not have a legal problem later?
4) OK, you won’t underprice your property and receive multiple offers, you’ll reach for the moon and lower the price if it’s not working. I hope you’re an excellent salesperson. The problem with this strategy is “bounce.” You’re the hot new home on the market, the darling of the moment, all eyes are on you, and the first 25 people in the door (many of them agents) think you’re a flop because your price is too high. Word spreads. 30 days into it you're hearing crickets and you lower the price. Now all the people who were willing to wait on you to lower your price are waiting for you to get really desperate.
5) It's, um.... awkward. Buyers don't want to tell you the truth about your paisley wallpaper, and they won't point out you’re a slob who hasn’t dusted the ceiling fan blades in years. They’ll just say it’s lovely, but “not the one for us.” An agent acts as your intermediary to objectify the personal comments and deliver the truth in an actionable way. Better yet, your agent prevents that situation by helping you prepare the property for showings.
6) You’re too close to your property to be objective about it. You hire me to tell you what “Anybuyer” sees and what to change. I show you how to stage your home for photos, and how to stage it for showing - two different things. If you have a little money to spend on improvements, I show you where it will make the most difference. And I’ve been called a “bulldog” about de-cluttering. But that’s a good thing for you. It means you won’t have 50 showings with zero offers, which is emotionally exhausting and wastes everyone’s time.
So, Who Should Consider a FSBO?
1. People who have bought and sold many (and I mean more than 5) properties in Hawaii. The variation in property ownership, condition, price, style, and contract process is quite unlike other states and can be confounding to buyers. It’s even more challenging for the seller because in the Hawaii contract, the buyer is offered so many opportunities to cancel without penalty.
2. Attorneys or others who deal with complex contracts in their daily life and understand their gravity may consider selling by owner.
3. People who have a lot of spare time and a sales personality. Selling your home on your own is a full time job. You earn the commission, you don’t save it. If you’re willing and interested in taking on the learning curve that comes along with this endeavor, go for it, keeping in mind the warnings above.
Want to Know More?
If you’re still interested in trying a FSBO, or want to know more about what value Realtors add, just ask. I’d be happy to describe each step of the preparation, marketing, and contract processes and you can decide for yourself if you’re willing and able to take those on, or if it’s best left to a professional in your case.
If you are selling your home by owner and it's not working out, I'll be happy to take a look.