Take The FIZZ Out Of The FSBO
Debunking Myths About For Sale By Owner
Properties
By George L. Rosario of Coldwell Banker
Kueber
Why do home owners decide to sell their own properties? Some
will say it is because they've heard bad things about real estate agents, and
others will say that they are sure they can do a better job than any agent, or
any other reason. The truth is that most sellers who go the FSBO route do it
because in their minds, they can do the same job as a Realtor and save
themselves the 6% commission a Realtor would charge them. It is all about
saving themselves a few percentage points on the sale of their home.
Is it impossible for them to make it? Of course not. I've
heard of a few successful FSBO's in my years in real estate. Notice I said I've
heard of them. I've been in the business since 1990 and I am starting to think
that I will have better luck meeting Big Foot before I ever meet one of these
successful FSBO's.
I have on the other hand met some very unsuccessful,
desperate FSBO's and heard enough first hand horror stories to fill up a
journal. NAR (the National Association of Realtors) reports that 86% of For
Sale By Owner’s hire a Realtor within 7 weeks of putting their house on the
market. This means that most FSBO's spend almost two months trying to sell
their home on their own, only to end up listing with a licensed Realtor. The
latest public records show that only 9 out of every 100 sellers will sell their
home through the FSBO forum. Out of those 9, an average of 8 will get far less
than what a licensed Realtor could have gotten them.
Why do FSBO's end up with less money? Well, because the only
people that go show a FSBO's house is a buyer’s agent (a licensed real estate
agent who is an expert negotiator on the part of the buyer). When buyer’s
agents approach a seller’s agent, also known as a listing agent such as I am, they
know they are facing an expert negotiator that is there to work for the benefit
of the seller. Think about this as a court case. In a court case scenario, the
buyer’s agent is the prosecutor; the FSBO is a defendant who foolishly decides
to defend himself; I am the defense attorney who is hired by the defendant that
knows the importance of having an experienced negotiator on his side.
The National Association of Realtors latest statistics show
that most home owners will not go past more than 3-4 real estate transaction in
their entire lives. An average Realtor goes through an average of 15-18
transactions per year. I average 28 completed transactions per year. Wouldn't
it make sense for all home sellers to hire someone who averages 28 completed
transactions per year to negotiate on their behalf?
There is this trend among sellers to allow websites such
as ForSaleByOwner, Zillow and Trulia to mislead them into listing
their own home on their sites under the FSBO section. These sites convince
sellers that they will save money if they sell their own home without the
expert services of a licensed agent. What they won’t tell sellers is the fact
that statistics show houses sold by Realtors sell for 42% more than houses sold
under the FSBO title. That means that the seller is sold on the idea of saving the
6% commission they would pay a Realtor, but are not informed that they are
literally trading that 6% savings for an additional 42% cost. That’s like trading
6 oranges for 42 oranges. The person giving away the 6 oranges has obviously
given away far less than the person giving away 42 oranges.
So what are the benefits of hiring a Realtor?
Realtors have access to tools that most For Sale By Owner’s don’t
have. We have access to the local Multiple Listing Service (MLS). We have
several webpages to advertise your home. We have access to pre-appraisal tools
like Geo Data Direct, Realtor.com, Property Shark, and many other Realtor
exclusive tools.
The most common method by which homes are sold is the MLS.
Realtors will advertise your property on the MLS so that all other local
Realtors (hundreds if not thousands) have instant access to details about your
home. These Realtors then forward the information to their buyers and seek out
the best qualified buyers to show your property to.
Geo Data Direct helps Coldwell Banker Realtors put together a
detailed property value comparable, helping us position your home for best
possible results in the market. This tool gives us the ability to see everything
that has sold and at what price, as well as access to tax info and other
pertinent information to the sale of your home.
Tools like Realtor.com, Homes.com, Property Shark and other
Realtor exclusive sites allow the public limited access to them, but reserve
full access for Licensed Realtors. The limited access given to home owners can become costly, and often prove to be too time consuming for owners to use to the full potential. While home owners use these tools before and after work, or during their free time, Realtors focus a large bulk of their day to putting these tools to work for them and for their clients.
I hear FSBO's tell me they can just as easily put out “Open
House” and “For Sale” signs on their properties and spend far less on those
marketing tools than they would spend if they were to pay a Realtor a commission
to do so. Well, let’s look at this one carefully.
When you are shopping for a car, you know that if you go to
a Licensed Dealer, particularly a Certified Pre-Owned car dealer, you will pay
more for your car than if you go directly to the guy who puts a 99 cent for
sale sign on the windshield. So why would anyone go to a car dealership.
Simple! The buyer expects a higher quality product from a dealer than from a
private seller. The Licensed Dealer’s product is more money, but it is more
trusted and it is therefore more desirable to the buyer.
The same is true with a sofa you purchase from a certified
furniture showroom as opposed to the sofa sold at a yard or garage sale. The
buyer sees the store bought sofa as being cleaner, more trustworthy and more
reliable than the sofa that a private owner is getting rid of on his own.
Buyers who see a For Sale By Owner sign in front of a house
go in expecting to pay a lot less. Many buyers will take the owner’s asking
price and deduct 6% before they even make an offer. They do this because they
figure since the owner is selling it on his own, he doesn't have the expense of
paying a Realtor’s commission, so why should the buyer pay that extra amount.
When a buyer meets a Realtor selling a house, the buyer
understands that the owner has hired a professional on his behalf, and the
buyer perceives that home as being a higher end product and will be more
willing to bargain up than down. The bottom line is that the FSBO sign in front
of the house may get more offers, but it will always get much lower offers than
what a For Sale By Agent sign will get. When you go with the world's most recognized real estate brand, Coldwell Banker, you increase your property's visibility to all of New York, the entire United States, and 49 other countries throughout the world.
I won’t even go into detail about the screening process
involved in selling a home. FSBO's are inviting strangers into their home
without taking the necessary steps to determine if this stranger is a serious
buyer, a tire kicker, or worse, a criminal. There are countless horror stories
of break-ins, armed robberies, attacks, thefts, rapes, and even murders of home
owners who open up their doors to strangers in the attempt to sell their house.
You don’t have to take my word for it. Research this topic online and you will
find out just how dangerous it is to tell potential criminals that you are
handling the sale of your home without consulting a professional.
The bottom line is that home owners owe it to themselves and
to the success of the sale to consult several Realtors prior to putting their
home up for sale. The right Realtor will convey a sense of security,
professionalism, experience, knowledge and ability when selling a home. The
right Realtor is a buffer, taking on the responsibilities and stresses of
selling a home, sparing the home owner of all the headaches involved with the
process.
Real Estate Salesperson
Coldwell Banker Kueber
Google "George L. Rosario"
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