Why Do Buyers Shy Away From Private Sellers?
On the face of it a private seller might seem like an easy prospect but when it comes down to the nitty gritty many buyers will walk away, unwilling to risk their cash on what could end up being a shady deal.
Even for experienced buyers who like a challenge, a For Sale By Owner (FSBO) can present too many issues. Although I successfully sold properties directly to buyers at the past, we look today at some of the reasons that buyers shy away from private sellers.
They suspect asking price is inflated
Some buyers believe they can get a better deal from an owner because there will be no real estate agent involved. But private sellers always want to get the best price possible for their property especially since they do the extra sales work and they don’t have to dole out a chunk of the profit for real estate agents fees.
In addition, some sellers have unrealistic expectations as of the market value of their property. This happens also when a real estate agent is involved but they usually curb, at least partially, the sellers’ expectations.
For these reasons FSBO properties can be overinflated and buyers can be wary of paying more than the house is worth.
It’s potentially emotional dealing with the seller
Invariably a private seller will assign their home sentimental value and may even have exactly the type of buyer they want in mind. If you don’t fit this mould you may not even get a look in. Whereas with a real estate agent, the personal aspect is removed and the owner is out of the picture.
Sentimental owners can be also hard to deal with directly because they may have issues about why they are selling, i.e. getting divorced or children all grown up. Buyers usually want to view a home and get in and out as they have a busy schedule. They don’t want to get caught up going down memory lane with a sentimental owner.
Seller is not held to same industry codes as a real estate agent
Some buyers may prefer real estate agents because buying a home is a legal process and there is a real concern over getting stung down the track with legal issues. Real estate agents know what is involved and can deal directly with the client on a person’s behalf, from calling, viewing, through to negotiating and settling.
Buying a property is a lengthy ordeal, so dealing with a professional can speed up the process, rather than going backwards and forwards endlessly and not getting anywhere. A FSBO seller also may not be willing to disclose certain aspects of the home, whereas with a real estate agent buyers know that they are getting some disclosure assurance because it’s the law.
If the seller is a real estate agent
Ex-real estate agents may think they have the upper hand when it comes to private selling but this in fact can be off-putting for a buyer if they find out about their qualifications. Though an ex-real estate seller can work in a buyer’s favour in terms of disclosure and knowing the legal ins and outs, buyers may still shy away because of their background. Buyers suspect they won’t come away with a good deal if the owner is real estate savvy, and out to make (gasp) a profit.
Lack of exposure
Buyers like attending open homes with a bit of a buzz around them. It makes them feel like they’re getting the best house on the block. Having a good amount of interest is how a seller gets a great price because more than one person wants the home.
While there are more and more internet sites for advertising private sales these days, FSBO is still not a traditional method of buying a home and sellers don’t always understand how it works and what they have to do. Most sellers believe it’s easier to use a real estate agent because all the hard work is done for them and they trust the process more.