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.

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 all home sales are FSBOs.

Top reasons why FSBOs fail in real estate

There are a lot of reasons why For-Sale-By-Owners fail and do not sell. Some of the top among these are:

1. Too many people to negotiate with

Those deciding to take the FSBO route often have to negotiate with many people. Some of them are likely to be:

  • 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 homeowners.

2. Homeowners do not know how to prepare the home for sale

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.
  • Painting the rooms with a fresh coat of paint.
  • Getting necessary repairs done.
  • Getting the home floors and carpets cleaned by professionals.
  • Ensuring curb appeal of the home.
  • Replacing outdated light fixtures.

Because homes for sale by owners 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 or 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.

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 these days 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 FSBO homes stay on the market, the less money people will be willing to offer for them.

If a seller tries FSBO before hiring an agent, the seller loses the “golden time” window. This will eliminate buyers who have already viewed the home and might have made a reasonable offer — but have already moved on.

6. Owners fail to understand the 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.

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.

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 sellers hire a real estate agent, the professional can give a property comprehensive 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, which FSBOs don’t have.

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.

With so many things acting against FSBOs, it’s natural to find very few homes for sale by owners in the market.

Cheryl Jensen is a writer at Total Atlanta Realty. You can follow her on Twitter or Facebook.

Email Cheryl Jensen.

Editor’s note: This story has been updated.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×