Friday, October 20, 2006

FSBO’s – Where are They Now?

Last year, 13% of all homes sold went the For Sale By Owner (FSBO) route, according to the National Association of Realtor’s 2005 Profile of Home Buyers and Sellers ($FILE/2005HBSonlineHighlights.pdf) That figure will show a drastic decline when the 2006 figures are published. FSBO’s work great when we are in a seller’s market – but that was so last year.

Most FSBO’s go that route because they wish to save on the commission (nowadays I require a 7% commission). But I must admit that my marketing, as a realtor®, has also had to be altered. I have to offer a lot more to my clients. But that is for another story.

Studies have shown that you can get more in less time utilizing a Realtor®. A recent NAR Profile of Home Buyers & Sellers study showed that a realtor® can get 16% more for a typical For Sale By Owner home. Everything else being equal & you just do the math, why would anyone want to go the FSBO route, if you figure that they will average at least 9% (16 – 7) more utilizing a realtor®? I just don’t understand the logic; but then again, I think that too many people do not look at the whole picture & just one little aspect of it. So, who’s kidding whom?

Last year, you could put a sign in your yard & your home would sell within a reasonable amount of time. Nowadays, you need a proven marketing plan. And, utilizing a discount realtor®, who will typically just charge you a fee for putting your home in the local MLS (Multiple Listing Service) is not considered a ‘proven marketing plan’, nor should you expect your home to sell too quickly.

Presently in the Greater Orlando area, there are over 16K homes for sale and that’s just in two counties – Orange & Seminole. How can someone think that by just putting a sign in their yard that they are going to garner the attention necessary to sell their home with that much competition? And that does not even include a lot of the homes offered by new home builders that are not listed in the MLS.

A good marketing plan has many different aspects to it & includes advertising in different media. Even a realtor® who just puts a sign in the yard & places the listing in the MLS is not doing enough. You need to show Price & Value to sell a home these days. It’s not difficult, but you have to prove it & not just once. Because for a home to sell, it must first be sold to the selling realtor® before it can be sold to the buyer.

Leaving this all aside, there are still many reasons not to go the FSBO route.

Pricing your property to sell involves more than just comparing it with other houses that have recently sold. The uniqueness of each property and its own values are based on location, condition, financing, amenities and other market factors.¨

Advertising can be very expensive, especially if you continue for a sustained period of time. Additionally, your Realtor can market your home utilizing avenues that are not available to you; including, but not limited to, the Multiple Listing Service.

When prospects inquire about your property and you are tempted to enter into a purchase agreement, how can you protect yourself from non-productive involvement? A Realtor should pre-qualify prospects bringing you Qualified Buyers.

Are you willing to admit Strangers to your home? Accepting unescorted strangers can play havoc with your family life. A Realtor using an Electronic Lockbox can identify the realtor who brought prospects into your home and when.

Selling your home can be a time-consuming assignment. You are literally married to the property and the inconvenience can be overwhelming. You have stay close to the property or you may miss the one buyer you’re seeking.

Financing is very frequently the key to a successful housing transaction. Buyers without the right advice and information may not see their way clear to buy your home. Your Realtor is able to help your buyer structure the right financing to meet his objective and yours.

How do you solve prospect problems? Your best buyer may well be someone who already owns a home, and whose decision to buy another property is premised on selling their present one. Your Realtor can sometimes arrange interim financing or a guaranteed sales agreement executed on the existing property.

It is difficult to Negotiate your own position. A Realtor should be prepared to counsel both yourself and the potential buyer, so the differences can be bridged and a transaction successfully consummated.

Once you’ve agreed to sell, there’s the matter of clearing title, obtaining financing, arranging insurance, working with lawyers and other agencies. You can avoid costly mistakes by relying on professionals who control and safeguard your housing investment. Use a Realtor®.

No comments: