FSBO and Buyer’s Market

In a buyer’s market there is a rise in the quality of FSBO sellers.

Let’s break down why this “quality rise” happens:

The “Weeding Out” Effect

A tough market acts as a filter, discouraging, or quickly eliminating, the types of sellers who are most likely to fail at FSBO:

  • The “Casual” Seller: The person who thinks, “My home is great, I’ll just stick a sign in the yard and see what happens.” In a buyer’s market, they get zero interest and quickly give up.

  • The Overconfident/Underprepared Seller: The one who overvalues their home and refuses to believe market data. In a slow market, their overpriced home sits indefinitely, forcing them to eventually list with an agent or withdraw.

  • The Unrealistic-Effort Seller: The seller without a realistic plan, or any tools/help, for the work involved. When they face the reality of terminology, negotiations, lowball offers and paperwork, they feel out of their depth.

The “Professionalization” of the Surviving FSBO

Those who persist in attempting a FSBO in a difficult market are often forced to adopt a more professional, agent-like approach. This is what constitutes the “rise in quality”:

  • They Do Their Homework: They are more likely to pay for a professional appraisal or conduct for themselves a serious and detailed CMA, Comparative Market Analysis, to price their home aggressively and correctly from day one.

  • They Invest in Marketing: They understand visibility is key, so they are more likely to use a flat-fee MLS service and be scrupulous about their photographs and possibly staging.

  • They Assemble a Professional Team: They might hire a real estate attorney and/or transaction coordinator to handle negotiations advice and contracts  (effectively replacing the legal and transactional expertise of an agent), they use online support services, and they work closely with a title company.

  • They Are Psychologically Prepared: They enter the process expecting serious effort, some patience and a clear understanding of their bottom line. They also tend to be enthusiastic learners.

In essence,  the FSBO sellers in a buyer’s market are those who have educated themselves and are determined. They aren’t just “selling a house themselves”; they are acting as the project manager of their own sale, hiring and coordinating the necessary professionals to fill the gaps.