Thinking of Selling ‘For Sale By Owner’ (FSBO)? Think again.
| By Peggy Crowe |
Going FSBO sounds perfect on the surface. Saving realtor fees is invariably what drives that decision. Put a sign in the yard, post it online and you are good to go. Some are successful if they have the time and skills. But most unrepresented sellers lose out in more ways than they could ever imagine.Michelle Marshall and Linda Patterson of West Asheville were delighted that they chose not to go the FSBO route. “We are thrilled that our house sold quickly for cash substantially above asking price. We initially planned to do ‘For Sale By Owner’ and put out feelers with a lower price and got a lot of interest. However, we soon began to realize there is more to selling a house than meets the eye and recognized we are not brokers nor did we want to be. We met with our realtor, decided on an asking price and followed her suggestions (sometimes kicking & screaming) on getting the house ready. Forty people attended our Open House and we had an offer above asking price by the end of that day. We had six very good offers in the two days allotted. Our goal was to have a cash offer and be closed by Election Day. We closed on November 2nd, no fuss, no muss. Our realtor did her due diligence, all of the footwork, and we closed in 22 days. Using a savvy broker was the best thing we could have done to sell this house.”
Here are the 5 reasons that they were happy with their decision.
1) Pricing: Sellers believe they can net more money because they aren’t paying an agent’s fees. But the truth is that FSBO sales generally net the sellers less than if they listed with a REALTOR®. Why? FSBO sellers generally rely on online sales information, which may not be accurate or similar to their home. Sellers often think their home is more valuable than the market does. If you price it too high, it will never sell.
REALTORS® know how to find accurate comps that closely match your home, hitting the “sweet spot” for securing a quick sale. According to a National Association of REALTORS® (NAR) 2015 national study, FSBO homes’ median sales price was $210,000 while agent-assisted homes sold for $249,000 – a $40,000 increase. Even after paying agent fees, sellers netted much more than they could have going solo.
2) Marketing: Marketing begins at home. REALTORS® know what buttons get buyers excited to put in an offer and which things turn them off. They are generally easy fixes such as staging, cleaning the house, de-cluttering, touch-up paint, changing out some fixtures or getting rid of pet odor.
While FSBOs have access to sites such as Craig’s List and Zillow, 88% of online searchers still use an agent. The Multiple Listing Service (MLS) automatically downloads to all local and national websites such as realtor.com. That’s where the great photographs and write-ups pay off. Agents often pay for a “boost” to market your home on Facebook. What would your marketing strategy be? Do you have the time to implement it?
Besides online, agents have a fine-tuned strategy that won’t cost you a dime. They generally hire a professional photographer who makes your home stand out from the competition. Floor plans with measurements or personal notes from sellers to buyers can make a huge difference. Agents email the 2600 local MLS affiliated agents about your home. REALTORS® also have buyer clients on automatic searches. When their desires match your house they get notified once it is listed and each time anything changes.
3) Knowledge about the Process: You know your home better than anyone and it’s emotional. When an unrepresented buyer submits a low-ball offer because it’s a FSBO, sellers take it as a personal affront and often walk away. If you do get an offer, who understands the paperwork, logistics, negotiations and legal requirements, which could potentially get you, sued?
Having an agent-represented buyer is a double-edged sword. You are only paying half of what you would have paid in commissions but you are dealing with a professional that does this every day. You, on the other hand, are a novice and the odds are stacked against you.
This is where a REALTOR® who represents you exclusively becomes your full-time advocate. Agents go through extensive training honing their skills. The REALTOR® paperwork and laws are constantly changing and vary greatly from state to state. Most sellers don’t have the time or expertise to understand the nuances of the legalese and necessary forms.
4) Your Time and Safety: If you are trying to go it alone, you will be amazed how much time it can eat up. Can you drop everything every time the phone rings or someone wants to see your home immediately? If you have a serious buyer they will want to spend several hours looking at everything. You need to be there but not shadow them. If you get a contract, then you will have to be available for a steady stream of professionals evaluating your home, some of which can take up to four hours.
Safety is another issue that most FSBO sellers don’t take into account. Craig’s List is a great tool but you don’t know if they are serious buyers. Also, while you are allowing buyers to have their needed space, your medications or valuables could be in jeopardy.
Agents have many ways to safeguard your home and time. They are available when buyers are ready who expect an agent to be with them the whole time. Also, the local Board of REALTORS® has a system where agents who want to show your home must get an appointment approved by you, then have to log in with their phones which indicates when they entered and left.
5) Negotiations: This is where the rubber meets the road. If you are dealing with an unrepresented buyer, neither of you understand the process nor legally mandated paperwork. If you are working with a Buyer’s agent, they understand everything. You don’t. But if you have your own REALTOR® they understand all of these things and advocate for you every step of the way so you are on equal footing.
There are two sets of negotiations. The first determines the price and terms. Securing a viable contract that is to your advantage isn’t always obvious to a novice but a professional knows how to ensure you get what you want.
The second stage is after the buyer has had the chance to inspect everything. This involves the buyer utilizing the gathered information with a request for items to be repaired, replaced, or to lower the price. Again, these requests often feel like a personal assault and can be deal-killers. A Buyer’s agent is ethically bound to do everything they can for their client, which often means asking for many things. It is hard for FSBOs to determine in a short amount of time what items are necessary, optional, or fluff.
A REALTOR® knows how to negotiate just as hard on your behalf at every crossroad as the Buyer’s Agent does for their client. They know the nuances of the forms and how to get you what you want. Plus they are the buffer between you and the buyer and will be the unemotional voice of reason in all the calls and emails it takes to close the sale.
The decision is yours. Do you have the time, energy, knowledge, and skills to sell your home yourself and make the profit that you were expecting? As Linda and Michelle found out, having a REALTOR® simplified their lives and made them a great deal more money.
Peggy Crowe is a REALTOR® with Coldwell Banker King who covers Asheville and the contiguous counties. Check out her video, contact information and testimonials at http://www.cbasheville.com/agents/peggy-crowe/