⚠️FSBO Seller Disclaimer: Important Considerations Before Selling Your Home Yourself

While selling your home on your own can seem like a great way to save money, it's essential to be aware of the potential risks and challenges you could face. By choosing to sell your property without the assistance of a real estate professional, you assume full responsibility for all the tasks, liabilities, and legal obligations that come with it.

Key Considerations:

• Legal Risk: Without the guidance of a real estate agent, you are responsible for ensuring all legal requirements are met, including disclosures, contracts, and negotiations. Any errors or omissions could lead to costly legal disputes.

• Paperwork & Complexity: The selling process involves complex documentation, including contracts, disclosures, and various legal forms. Mistakes can be costly and time-consuming to correct.

• Limited Market Exposure: Real estate agents have access to multiple listing services (MLS) and a network of buyers and sellers. Without this, your property may not get the exposure it needs to sell at the highest possible price.

• Time Commitment: Preparing, listing, marketing, and showing your home takes considerable time and effort. Can you manage these tasks while balancing your other responsibilities?

• Negotiation Skills: A skilled agent can often negotiate a better selling price and terms than you can on your own. They can also help in handling the emotional aspects of selling, which can often cloud judgment.

• Costs May Add Up: While you'll save on agent commissions, you'll have to pay out-of-pocket for marketing materials, home staging, professional photography, and potentially a real estate attorney to review contracts.

• Potential Lower Sale Price: Studies have shown that homes sold through agents often fetch a higher sales price than those sold by owners, which can sometimes more than cover the cost of commissions. Buyers often low ball FSBO homes.

  📊For Sale By Owner (FSBO) Statistic 1: FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $225,000 last year, significantly lower than the median of agent assisted homes at $345,000 (34.8% less)

  Source: 2022 Profile of Home Buyers and Sellers by The National Association of REALTORS®

  2022-profile-of-home-buyers-and-sellers.pdf

• Agent Cooperation: Many buyer's agents are hesitant to deal with FSBO properties, which greatly limits your pool of potential buyers.

📄Article (2023): Why FSBOs Say They Regret Not Using a Real Estate Agent

Homeowners who decline to use a real estate agent to sell their property are twice as likely to say they weren’t satisfied with the selling experience, according to a new survey from Clever Real Estate(link is external) of 1,000 home sellers in 2022 and 2023. Survey respondents say they realize they likely made less money on their home sale and faced more stress by not having a professional representative.

Those who didn’t use a real estate agent said before their transaction that they think pros are overpaid for what they do and are not more knowledgeable about the homeselling process than the average seller. However, when these respondents reflected on their experience after the transaction, they admitted that they made some mistakes without the help of a pro.

More than a third of non-agent sellers, such as FSBOs or those selling to an iBuyer, said the process was more difficult than they expected. What’s more, these sellers admitted:

1. Buyers distrusted them because they didn’t have an agent (43%).
2. They struggled to understand their contract (40%).
3. They made legal mistakes because they didn’t use an agent (36%).

The survey also found other consequences of going it alone as a seller:

1. Lower sales price: Homeowners who sold without a real estate agent are three times more likely to say they lost money on their home sale. The Clever Real Estate survey found that those who sold their home with an agent tended to earn $46,603 more in average profits than those who sold without an agent in 2022 and 2023. About half of unrepresented sellers say they wish they had priced their home differently, and nearly half now believe their home would have sold for more if they would have used an agent.
2. Longer selling process: Home sellers without an agent are nearly twice as likely to say they didn’t accept an offer for at least three months; 53% of sellers who used an agent say they accepted an offer within a month of listing their home. Ironically, many homeowners who didn’t use an agent said the primary reason for going it alone was to sell faster.
3. More stress: Half of home sellers who did not use an agent admit to crying at some point in the process. Fifty-two percent of unrepresented home sellers said they felt overwhelmed by the entire sales process. On the flip side, homeowners who hired an agent were more likely to say they felt good about their sale and expressed less stress.

Step 1: Prepare for the Sale

Major Repairs

Repair major defects prior to the sale to avoid delays.

Buyers that discover significant defects during inspection will likely request you repair it, cancel the sale, or ask for a price reduction. Lenders and municipal inspectors sometimes insist on remediating major issues.

Examples of major repairs include:

• Wiring and electrical. Double-tapped breakers, lack of ground-fault circuit interrupter (“GFCI”) near water, unlabeled breakers, and fire hazards (in particular Federal Pacific panels).
• Roof. Leaking, poor drainage, excessive deterioration, ponding, missing shingles, and ponding, chimney problems, and improper flashing.
• Mechanical, Plumbing, HVAC. Central air-conditioning, furnace, hot water heater, sump pump, septics, pipes.
• Environmental concerns. Mold, radon, asbestos, carbon monoxide, soil contamination, and underground tanks.
• Foundation. Signs of foundation defects may include slanted or uneven floors, doors and windows that don’t open/close properly, cracks and fractures in the interior/exterior walls and floors, settling or sinking of the building, damp crawl spaces, and cabinets and counters with gaps and separating from the walls.

New Jersey law requires sellers to disclose “latent material defects” to unaware buyers. Correcting these defects prior to the sale makes seller disclosures less alarming. Review this article on Selling As Is in New Jersey – Disclosure Law for a comprehensive discussion on seller disclosure.

Cosmetic Upgrades

Improved cosmetics help sell faster and for a higher price. Attractive properties draw more buyers, and competition drives increased sale proceeds and favorable contract terms (i.e. earnest deposit, inspection contingency, financing and appraisal contingency, closing date).

Exterior upgrades improve “curb appeal” which increases value 3-5% according to Consumer Reports.  Landscaping and lawn maintenance, pressure washing the exterior and roof, painting the house, doors, and fencing, repairing cracks to walkways, adding window treatments, and lighting are recommended for boosting outside appearance.

Ideas for making the interior esthetically pleasing are decluttering and deep cleaning, removing personal items, kitchen and bathroom updates, refinishing or replacing flooring, and converting a basement or attic to living area.

Collect Documents

Buyers, through their attorney and title company, normally request documents. Some documents may be demanded prior to entering a fully binding purchase and sale agreement, and others may be a closing requirement. Collecting anticipated documents ahead of time can prevent delays and even a sale from falling through.

1. Permits. Permits are generally required when installing mechanical systems (central air-conditioning, furnace, hot water heaters), making additions or conversions (new bathrooms/bedrooms, living areas, decks), or remediating environmental problems (radon systems and underground oil tanks). Buyers, lenders, and the municipality will request permits as part of approving the sale.