The Real Facts About For Sale By Owner

No one wants to spend money when they don’t need to.

There are many reasons a homeowner would want to sell his or her own house, but saving money is a major factor in most decisions to skip the real estate agency process. Homeowners think that they will make more money if they save on the real estate fee. On the surface, that would seem reasonable. But when you look further into the expenses of FSBO, you see a different truth. You are thinking, this guy is a Realtor, so it would stand to reason I’d be looking for a way to get home owners to opt to list instead. But the cold hard fact is, FSBO’s tend to sell for less than those listed with qualified real estate sales professionals. So while sellers might feel good about saving the fee, more often than not they aren’t really saving any money at all.

FACT

The more people who know that your property is for sale, the more likely that it will sell faster and at a higher price. Listing your home with a Realtor and placing the property on the MLS (Multiple Listing Service) allows thousands of Realtors (and their qualified buyers) to have access to your property. In most cases, an owner will net more with a Realtor, even after paying commissions. This is because more buyers will be viewing and bidding on the property. Imagine an auction with 5 people attending versus 100 people, which would probably result in a higher sale price?

FACT

A study done by the National Association of Realtors found that on average, the typical FSBO home sold for $113,000 compared to selling price of $129,900 for agent assisted homes. The percentage difference between the original asking price and the final selling price for both types of transactions was around two percent.” This is a sixteen thousand dollar difference, well more then the 6% brokerage fee.

MYTH

FSBO’s pay no commissions.

FACT

Most qualified buyers are represented by a buyers agent. Many agents shy away from showing FSBO’s to their clients. But if the agent will show your home to his clients, he will require that the seller sign a commission agreement with him. Buyers working without an agent are representing themselves for the same reason that you are, they want to save the commission and are going to want you to discount your home for the amount of the fees.

FACT

When Selling his or her own home, the owner will incur all of the advertising expenses. Classifieds, display, internet, signs, color flyers. It all ads up in monetary and time investments. Month after month.

FACT

The longer a home is on the market the lower the selling price is. Why? Because it acquires what is known as “market age.” Most buyers think that if the home has not sold after this long…there must be something wrong with the home. Market age is a deterrent to later selling at the proper market price.

FACT

You are advertising one home – your own. My office on the other hand is advertising many homes by comparison. It is frequent that a prospect will call a us on one ad but buy a home other than the one he called on first. In fact it is rare that the house the buyer originally showed interest in, is the house the buyer ends up purchasing. Thus, through advertising, we provide many possibilities for qualified prospects for your home.

FACT

When the visitors find nobody home often they go on to look at other homes and do not return to the home which no one was there to receive them. We, as Realtors, accessing a lockbox, are able to show the home at virtually any time, except when you do not wish us to do so. When prospects drive by, like a property from the outside, they simply take the address and our office telephone number from the sign, then call their licensed real estate professional or our office to arrange for a showing.

FACT

Prospects often are reluctant to bring out and discuss objections with the owner because of the personal element involved. They do not want to put the owner in the position of defending his own home. Thus, an owner can’t represent himself properly with many prospects because the owner does not know that the prospects have unrevealed objections.

The Real Story About Selling Your Own Home!

Do you throw money out the window as you drive? Do you hand the grocery store clerk an extra $20 bill and tell her to keep it? Of course not. No one wants to spend money when they don’t have to.

Saving money is a major factor in most decisions made by homeowners to attempt to sell their own home and skip the real estate agency process.  These homeowners think that they will make more money if they save on the real estate fee.  I am a real estate agent, so it would stand to reason I’d be looking for a way to get For Sale By Owner’s to opt to list instead.  But the fact is, FSBO’s tend to sell for less than those listed with qualified real estate sales professionals.  So while sellers might feel good about saving the fee, more often than not they aren’t really saving any money at all.  The idea that FSBO’s save money is a myth. Here are the facts: 

FACT: A year 2000 study done by the National Association of Realtors found that on average, the typical FSBO home sold for $113,000 compared to selling price of $129,900 for agent assisted homes. The percentage difference between the original asking price and the final selling price for both types of transactions was around two percent.” This is a sixteen thousand dollar difference, well more then the 6% brokerage fee.

FACT: The more people who know that your property is for sale, the more likely that it will sell faster and at a higher price. Listing your home with a Realtor(R) and placing the property on the MLS (Multiple Listing Service) allows thousands of Realtors (and their qualified buyers) to have access to your property. In most cases, an owner will net more with a Realtor, even after paying commissions. This is because more buyers will be viewing and bidding on the property. Imagine an auction with 5 people attending versus 100 people, which would probably result in a higher price?

FACT:The longer a home is on the market the lower the selling price is. Why? Because it acquires what is known as “market age.” Most buyers think that if the home has not sold after this long…there must be something wrong with the home. Market age is a deterrent to later selling at the proper market price.

FACT:The owner will incur all of the advertising expenses. Classifieds, display, internet, signs, color flyers. It all ads up. Month after month. 

MYTH: FSBO’s pay no commissions.

FACT: Most qualified buyers are represented by a buyers agent. Many agents shy away from showing FSBO’s to their clients. But if the agent will show your home to his clients, he will require that the seller sign a commission agreement with him. Buyers working without an agent are representing themselves for the same reason that you are, they want to save the commission and are going to want you to discount your home for the amount of the fees.

MYTH: A FSBO can market a home just like a Realtor.

FACT: The seller is advertising one home – his own. The Realtor(R) on the other hand is advertising many homes by comparison. It is frequent that a prospect will call a broker on one ad but buy a home other than the one he called on first. In fact it is rare that the house the buyer originally showed interest in, is the house the buyer ends up purchasing. Thus, through advertising, the broker provides many possibilities for qualified prospects.

FACT: The seller has had neither the training nor experience in qualifying buyers from all aspects, including financial ability of the purchaser to buy a home. Thus, prospects are lost through poor qualifying, or as in many cases, is not only lost but also much valuable time and often expenses, with the necessity of starting all over again.

FACT: Often home owner ads bring a great many lookers who are not really qualified to buy, wasting owner’s time and perhaps losing a real prospect for him. Realtors(R) pre-qualify potential buyers and bring people to view homes who are qualified financially to buy and who are definitely interested in the specific type and location of home.

FACT: Prospects often are reluctant to bring out and discuss objections with the owner because of the personal element involved. They do not want to put the owner in the position of defending his own home. Thus, an owner can’t represent himself properly with many prospects because the owner does not know that the prospects have unrevealed objections.

FACT: When the visitors find nobody home often they go on to look at other homes and do not return to the home which no one to receive them. A Realtor(R), accessing a lockbox, is able to show the home at virtually any time, except at certain hours the seller might exclude for personal reasons.  When prospects drive by, like a property from the outside, they simply take the address and brokers telephone number from the sign, then call their licensed real estate professional to arrange for a showing. 

On the surface it seems like a good idea to save some money and sell your own home. But when the light of day is shown on the process, it seems clear that qualified Realtors(R) are an invaluable tool in maximizing your investment in time and return when selling your home.