For Sale by Owner: Off MLS Listing Is Risky Business

Since 2013, there has been an increase in sellers pre-selling similarities and listing them off the Multiple Listing sets(MLS). chief Logic reported that in 2013, 53% of real estate transactions conducted in the U.S. were not listed on the MLS. Most sellers do not keep up a real estate license, and are not permitted to use the MLS – the standard listing portal for a licensed real estate agent. Although buyer’s agents are willing to work with For Sale by Owner (FSBO) listings, they are not permitted to give the seller any advice or access to marketing.

Sellers who want to list a FSBO may be losing out on tens of thousands of dollars in real market value on a character, especially if they list similarities without an up-to-date appraisal or current market research. Often a seller will list a FSBO based on the sale price of a neighbor’s home, which may or may not be the best choice for a comparable character. A local real estate agent lists similarities continuously in their regional sales area and is best appropriate to offer a market comparison in the neighborhoods he or she covers. Remember, tax assessments, though freely obtainable, are not the best tool for gauging a character’s true market value at any give point in time.

One nuance about FSBO sales that should give sellers pause is the fact that an experienced buyer’s agent may keep up the upper hand in a FSBO real estate transaction. Why? The seller may not be familiar with state laws and fiduciary codes and/or ramifications of contract issues that crop up during negotiations. already with a lawyer creating a real estate contract on a character, the final outcome of a For Sale By Owner (FSBO) real estate sale may be held up over a variety of issues. Experienced REALTORS know how to circumvent these roadblocks quickly and keep a character transaction on track.

FSBO is Not Equal to a REALTOR’s Advertising possible

Working with a specialized REALTOR is worth the commission under these circumstances. A FSBO has a limited opportunity for marketing, becoming more heavily reliant upon web real estate portal sites such as Zillow.com. With a seasoned agent, advertising penetration for a character is far greater. For example, I list my similarities for sale in Williamsburg, Virginia on four MLS websites. This gives my sellers and extensive area of coverage so that other agents can see the listing and buyers on the MLS can also see it. My MLS listings are also republished on Realtor.com, which is owned by the National Association of Realtors and is also a reputable website in the industry.

My broker, Coldwell Banker Traditions, also has a listing mechanism on its locally based website, where my client similarities receive excellent visibility. Not all REALTORS list similarities this widely on the Web, so check with individual real estate agents and ask them for specific information about advertising provided for client listings by MLS and other venues on the Web.

There are other disadvantages to listing similarities without an agent. If the owner happens to miss a showing with a possible buyer, he or she may miss the opportunity to sell a character altogether. For real estate sales in my territory, Southeastern Virginia, an owner is not permitted to use legal forms produced by the Virginia Association for Realtors (VAR), unless they are licensed. Real estate forms are formally copyrighted by the VAR and sanctioned for use only by membership. This puts the seller at another definite disadvantage in the transaction. Having to create legal forms anew is not only time consuming, it may increase costs for an attorney.

Besides some of the more obvious advantages to listing with a licensed real estate agent, there is also a shared misconception that the use of a real estate lawyer will save money versus paying agents’ commissions. The seller nevertheless has to pay the buyers agent fees (which is variable by state and kind of real estate transaction). All FSBO sales contracts must be produced and finalized with a lawyer. The sales course of action involves having the buyer read the contract and make changes. The lawyer revises the contract appropriately and it is presented at closing. Lawyers in Virginia charge far more to create an original contract (in my experience) than the commission on the seller’s side – in most instances. Sellers who want to go it alone should seriously consider the lawyer’s fees may be more expensive, and are largely unpredictable, depending upon the number of legal forms needed, length of negotiations and additional contract requirements.

Sellers need to forgo the FSBO and get smart in a real estate market that is definitely on the move in many regions of the U.S. Pricing is trending higher in the 2014 market and inventories are low in many markets. So sellers need to have expert advice on pricing real estate at current market value now – more than ever. In addition to possible loss of profits from home sale, the seller may easily run up against legal and contract issues that may not be quickly resolved. Worse however, these matters may be settled too late to to follow the time limits on certain loans such as FHA and USDA. If the seller does not know what they’re doing and timeframes are not heeded, this can cause the buyer to relinquish a loan. In turn, the character loses a good buyer and valuable time on the market.

Be wise and don’t include in risky business – listing a character off the MLS or without a licensed agent. It is best to have the representation of a licensed agent for a variety of reasons. The main reasons are: the seller will have expert advice, will most likely sell the character sooner and the character will command a fair market price. Say no to FSBO. Instead, seek out a capable real estate specialized in your vicinity for piece of mind.

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