When you hear someone managed to sell a home without representation, it’s likely that the sale was to a family member, close friend, or a tenant who was already renting and living there. These exceptional cases are not the norm, and there are powerful reasons why it is so difficult to make a sale “by owner.”
The biggest roadblock is that For Sale By Owners (FSBOs) aren’t included in the Multiple Listing Service (MLS) that licensed agents and organizations use. A sign in the yard and an ad in the newspaper are no match for the widespread exposure gained from a listing visible to the agents on the MLS.
Since the FSBO has no listing agreement providing for a brokerage fee, many agents won’t show these homes with no promise of compensation. Again, this greatly reduces the number of potential buyers exposed to the offering, not to mention the fact that buyers who do express interest will not have been screened by a professional to determine their qualifications.
Perhaps the most hazardous aspect of selling “by owner” is the potential for legal oversights and complications. Real estate transactions are loaded with potential liability for unrepresented an unwitting sellers. One overlooked form or improper disclosure could generate an expensive lawsuit.
The average home’s sale price is around $100,000. Would you buy $100,000 worth of stock without the help of a qualified stock broker? Would you represent yourself in a $100,000 lawsuit? Probably not, so why would you consider selling your home without representation?