When it comes to listing someone's property, we encounter a lot of objections as to why the seller feels it's not in their best interest to do so. One of the most common objections I hear, especially in our buyer's market, is the owner wanting to FSBO their property. Here's a sample script that I've used and have had success with:
I can appreciate the idea of selling a home by owner. Your biggest objection is probably paying the commission. I like to save money too, so let me impress on you some facts from the National Association of Realtors. Just a little background on the NAR first. They poll hundreds of thousands of people every year and are known for having very accurate and non-biased polls. They found that 84% of all FSBO's eventually list with a Realtor. That's a success rate of a mere 16%. Also, on average, FSBO's get between 8 and 12% less than they would if they listed with a realtor, so even though we charge a 6% commission, according to these stats you would still earn more from your sale by around 4%. And, I'm not trying to scare you, but it is a fact that 80% of all real estate related court battles include a FSBO party. So, even if you are part of the rare 16% who successfully sell your home by yourself, you will likely make less money and have a dramatically higher chance of being involved in a law suit. If you do decide to sell on your own, it would be wise to obtain errors and omissions insurance and better yet if you were to hire a real estate attorney to handle the paperwork for you. I also want you to consider the fact that most buyers work with an agent, and buyer's agents aren't going to work for free. So unless you're willing to pay a selling commission to a buyer ‘s agent, you're basically excluding 85% of your buyers. So, for all the risks and stats do you still think it's worth it to sell on your own?
Pricing property properly, is also often an issue of contention. Sellers often want to list their home above fair market value. It's easy enough to agree to their price with the understanding that if there isn't any action within the first few weeks, a price reduction will be introduced, but then you lose a lot of the activity that is prevelent within the first couple weeks after a home hits the market. I like to say something along the following:
By listing at the price you suggest, we are not listing merely at a higher price, but at an overpriced priced. Believe me, I want to sell your home for as much as possible, but to do that, we must price it accurately. Buyers are going to be comparing your home constantly to others they've seen. We can't fool them. If we overprice your home they are going to use it as justification for putting in an offer on your neighbor's home. When we first list a property is when we see the most activity and then it will drop off and plateau after a couple weeks. When there is a high level of activity we are more likely to recieve an offer. We want to capitalize on the first couple weeks of activity by pricing it right and sticking firm to our price. Also, this can cause multiple offers, and create a bidding-war environment. I'm not guaranteeing that this will happen, but your chances of having it so are much more likely with an aggressively priced property.
It's empowering to be prepared with with scripts like these. Once you internalize them it keeps you from floundering for answers when faced with tough questions and observations. Any more ideas?
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