I Sell FSBO
Why it is so difficult to sell by owner and NET more money? Find out the 8 reasons why this it true. Discover what type of By Owner you are. Explore the 5 options that you have to market your property.
Why is it so hard to sell by owner and NET more money?
Only 5% of the homes are sold by owner. With the prospect of saving thousands in real estate fees, you would think this number would be so much higher, but why isn’t it?
These are 8 reasons why selling FSBO is so hard.
1. Buyers aren’t thrilled about approaching you. Sure, when you meet them, they are very nice. But they are also very uncomfortable going directly to owners. They really want to work with a buyer’s agent. Buyers create A, B and C lists for showing. You will always be on their B or C list.
2. Buyers are loyal to their buyer’s agents. They will in most cases, consult with their buyer’s agent and have them talk directly to you.
3. Most of the time you have to pay ½ of the commission anyway. Very few buyers don’t already have a buyer’s agent, so to reach most buyers who are loyal to their agents, you have to pay 2.0-2.5%, to have access to those buyers.
4. The buyers you do attract are not the best buyers. There are buyers in the market who will come directly to you. They fall into 2 groups. First are unqualified buyers. That is why they aren’t working with an agent. No agent wants to work with them. They will waste your time, tie it up in an escrow that will never close. The second group are very savvy investor types. They know way more about the market than you do. They are strong negotiators. Sure, you can sell to them. But good luck NETTING more money than you could by hiring an agent.
5. Proper pricing is very hard. Going to Zillow and getting a price isn’t the answer. Occasionally, FSBO’s will give all their saving away by underpricing. But this doesn’t happen often. Most of the time, they error on the side of overpricing. Which creates 2 problems. First, it doesn’t sell at the inflated price. Second, it creates long market times. When you have been on the market a long time, especially as a FSBO, the only offers will be low-ball offers.
6. You pay for a professional agent to negotiate against you. As referred to in #3 above, in most cases in order to sell, you have to cooperate with a buyer’s agent, who doesn’t represent you. They work for the buyer. What 95% of home sellers have come to realize, is that if you’re going to pay someone to sell their property, hire one who will represent you, not the other side.
7. You have no one to tell you the truth. Part of the duties of a professional agent is to tell you things that you need to hear. Your paint color is a turn off. Your home smells like dog. Your living room furniture is too cluttered. You get the point. Real estate agents KNOW what helps and what prevents a home from selling. It is our job to tell you the ugly stuff, so it can be fixed.
8. Buyers HATE it when the seller is there. Admit it. You were a buyer once. Buyers don’t really want to see or talk to the seller. They want to have an open and honest conversation amongst themselves. Sometimes they trash talk some of the things about the house. Other times, they really love some features about the house, and don’t want to let on, because they fear it will hurt them at negotiating time. In addition, they like to snoop. They want to open cabinets, and closets. They even want to look in the refrigerator. They feel very uncomfortable doing that when you are there.
You CAN sell by owner. But it is very hard to sell and NET more money than if you use an experienced agent. That is the #1 reason why the 95% of all homeowners realize they need an agent on their side.
What Type of For Sale By Owner are you?
Are you the type that will achieve success? Read about this 5 types to find out who you are.
The Know It All.
Since they already know everything there is to know, they most likely are not reading this right now. Many of them are salespeople in other areas. Sometimes they have been successful in selling by owner in the past. Because they are usually much worse negotiators than they will admit, most of the time they will NET less than if they had to pay a commission. But they won’t admit that, because they know everything, and are always right.
I already have an agent picked out
These are people who understand the value of an agent. However, they are not quite ready to list. So, while they are getting their property ready for the market, they say to themselves. “Let’s give it a try and see if we get lucky.”
I don't like Real Estate Agents
If you have been burned before, you don’t want to jump back into the fire. I get it. These are people who in the past used agents, but had a really bad experience. When questioned in detail about it, they most often reveal that they really don’t have anything against agents, they just haven’t found one that offered them real value.
The do-it yourself type.
These are folks who also do their own plumbing, electrical and roofing repairs. I see them in the aisles of Home Depot all the time. If they can’t do the job themselves, then it doesn’t really need to be done. Some of these people, will sometimes, realize they are in over their head. They will reluctantly hire a professional.
Let's Give it a short try.
This type of FSBO is the largest in number when the market is hot, and the smallest when the market is not. But the attitude is “Hey, maybe we will get lucky." Typically, they have a reasonable time frame set in advance. Most of them will try for 2-4 weeks, and if not sold, hire an agent.
So What Type of FSBO do you most identify with?
Sometimes you are cut out to be a successful FSBO. Other times....Maybe not.
If you are #1, A know it all type, I can’t help you. Because….well because… you are ready know more then me, a 25 year veteran.
If you are #2. Someone who has already has an agent picked out. Since you have already decided on an agent, the best I can do for you is to wish you good luck. I hope you are in good hands.
If you are #3. Some who has had bad experiences with agents. I can really help you. You really need to break the losing streak with the agents you hire. It is time for you to “consider” hiring a pro. Since I understand your past frustrations, I promise you I won’t be pushy. I realize that first I must earn your trust.
If you are #4. A do it your self type. Then you are my type. I am like you. I have plenty of do-it yourself horror stories that I can share with you. Maybe, you might come to the conclusion, later, most often, much later, that this is not the project you care to tackle anymore. Then I can help you.
If you are #5. A try it for a while type. I will tell you flat out…. This market is hard right now. Especially for By Owners. It is not 2017 anymore. If you get lucky and sell it By Owner, it will happen in the first 30 days. If not, it most likely never will. You will need some help at that time.
If you are types 3-5, contact Tom to see if he can help. It will take about 30 minutes in your home, very low pressure.
5 Options for selling your home.
Most FSBO’s at some point in time, if the home isn’t selling, realize they have to make a change. But what to do? These are your 5 primary options.
1. Continue to sell “By Owner”. Most for sale by owners who are successful, will sell within the first 30 days. If not sold in the first 3-4 weeks, the odds of you ever selling it by owner, are very small. It is wise to consider other options.
2. Flat fee brokers. MLS entry only firms. Sound good. But, if they were really a good option, then they would have a dominate market share, and a huge success rate. But they don’t. The market share is extremely low. In addition, the success rate is low, and the reviews are in the toilet. Flat fee brokers do no work other then the initial MLS listing. They leave all the showings and negotiations to you. So, you are still in the for sale by owner game.
3. List with a Super discount broker. Most of these brokers will grab your attention with a “Bait and Switch” move. “I will list you home for 1%.” Which quickly becomes, but if you want access to all the buyers, you will have to pay an additional 2.5% to attract all the buyers who are working with agents.
4. List with a full-service broker and pay top dollar. You can pay 5-6% commission and get a good agent to sell it for you.
5. You can list with a full-service broker who will give you a discounted fee. This could very well be your best option. You can hire a seasoned professional and not pay the premium commission. Yet, you will NOT be compromised on service, marketing and negotiating.
Tom Foster is Option #5 . What you get is 25 years’ experience. Superior market knowledge, #1 Company in the Metro Area, and strong negotiating skills. You will most likely NET more than you could on your own. You will enjoy the benefits of 2 visual tours, one featuring the house AND the neighborhood, and one 3-D visual tour.