By Marcie Geffner

Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselfers are very experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five reasons why.

1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including the gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS.

2. Agents won't show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

3. FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers.

4. Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer.

5. FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (e.g., California). A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.

Copyright © 2000 Marcie Geffner. All rights reserved.

The typical homebuyer was a 36-year-old married consumer with a household income of $71,300. Buyers usually took about seven weeks to complete their home search and actually walked through about ten homes before making a final decision. Forty percent said their primary reason for making a housing change was the desire to own a home. Almost 80 percent of homebuyers nationally used real estate professionals as an information source; in the southern United States, 71 percent purchased their homes through a real estate agent or broker and in the West, 68 percent.

The Internet was an important information source for 41 percent of homebuyers. The typical Net-savvy homebuyer is about four years younger and makes about $12,000 more than the homebuyer who does not involve the Internet in his/her home search. Over half of the consumers using the Internet logged on to Realtor.com, while others used real estate company or agent Web sites and the sites of local newspapers.

So, when prospective homebuyers sit down to surf the Web, what are they looking for? Almost all said that finding home listings was the main concern. Twenty-five percent searched for information about a particular area, and five percent looked up real estate companies or agents. About 80 percent of searchers considered detailed property information, multiple property photos and listing addresses "extremely valuable." Sixty-three percent of people that used the Internet in their home search said it shortened the time it took them to find a home. Fifty-six percent said they found searching the Net to be "extremely valuable," while 42 percent called it "somewhat valuable."

In 2001, the Internet was one of the most widely reported marketing tools that agents used in selling a property. Eight percent of buyers first learned of the homes they would eventually purchase on the Internet. This is up from less than one percent back in 1995, showing how quickly the Internet is growing in importance in the real estate industry. With the Internet increasing in popularity, worries arose about the continuing consumer interest in REALTORS^®. However, NAR's Research Division shows that 69 percent of Internet home searchers, with the assistance of an agent, visited a home they viewed online. 77 percent eventually purchased their homes through real estate professionals. Contrary to what old fears presumed, using the Internet has actually made homebuyers more likely to go to an agent or broker to complete the home-buying process.

Real estate professionals assisted with approximately 80 percent of home transactions in 2001. Only 13 percent of homes were sold by their previous owners. These are called "For Sale By Owner" transactions, or FSBOs. The typical FSBO home sold for $37,600 less than typical agent-assisted homes. Many FSBO sellers did not use an agent because they did not want to pay a commission fee; however, the median sales price of homes sold with the assistance of a professional was 27 percent higher. Understanding and performing the paperwork was the biggest problem area for FSBO sellers; only 35 percent would sell their own homes again. Twenty-two percent of FSBO sellers said they would definitely use a real estate agent next time.