...the person who BUYS your home. Here's what I mean... Let's break it down into dollars and cents.
In my area, the average home sells for around $650,000.
The average classified ad in the local paper cost $30. The average classified ad in the larger regional paper cost $40. The "Buy Owner" Service Cost $3995 or more. The average household income in my area is approximately $100,000. (epodunk.com).
Now lets break it down... When you list with a Realtor, the average negotiated sales price off of list price is approximately 3.5% in my area. The seller grosses $627,250 (off a list price of $650,000). Then the commission (at 6%) makes the gross to the seller $589,615. After that, there is normal expenses that you will have to pay such as mortgage payoff, taxes, title, etc.... These expenses you will have to incur no matter HOW you sell... So, the realtor has grossed you $589,615.
You may be saying to yourself... THAT IS Ridiculous! That's over $60,000 off the asking price!!!!
Now let's take a look and see what happens when you attempt to sell by yourself. Here are your tools...
1. The Newspaper
2. The Internet
3. Limited Services Companies such as "Buy Owner"
4. Open Houses
5. Word of Mouth
6. (Possibly) Co-op with a Realtor Buyer's agent
Okay, the National Association of Realtors statistics (2003) state that the average For Sale By Owner sells for 17% LESS than the average home sold with a Realtor. Your $650,000 just got reduced to approximately $539,500!
Now, the average market time for a home to sell in my area is approximately 6 months. If you were to only place 1 classified ad per week in our two main newspapers that $70 x 24 weeks = $1680
You just pocketed $537,820.
Now as I said, the average family earns $100,000 in my area (or $50/hour). If you were to hold only 1 open house for 3 hours every week for 6 months the OPPORTUNITY costs are ($50x3hoursx24weeks) $3600.
Finally, a lot of people want to list their home with a service like "BUY OWNER". In my area, BUY OWNER will charge you $3995 to put your house on their website with some pictures. That's it....oh, you also get a sign. Take another $3995 off of your bottom line... $533,825 now.
What about the extra time it takes to tell other people your home is for sale? Placing ads on Free sites like craigslist? Handing out flyers... and how much do they cost apiece... ALL THIS AND YOUR HOME STILL ISN'T SOLD!!!!
Hmmm.... $589,615 vs $533,825 it seems that the "expensive" Realtor just saved you $55,790 and all of your valuable time and aggravation. PLUS you don't have to pay this Realtor a DIME unless your home sells...
Which sales technique is really more expensive?
Oh, by the way, that buyer who buys your home for sale gets to pick up the poorly negotiated sales price as INSTANT equity.
Until Next time...
Bryce Fuller is a professional Realtor with RE/MAX North in Northbrook, IL. He can be reached via email at Bryce@TheFullerForce.com or on the web at http://www.thefullerforce.com/. His real estate concentration is in Northbrook, Illinois, Glenview, Illinois, and Deerfield, Illinois. All of these communities are on the West Side of the North Shore of Chicago. He has over 5 years of experience selling single family homes, condos, townhomes, townhouses, condominiums, and investment real estate in this and the surrounding areas. If you or someone you know is looking for a professional realtor to buy or sell residential real estate, please contact Bryce today. He works on a team with his wife Lori Fuller, and his Mother, Connie Fuller. They are affectionately known as "The Fuller Force" at RE/MAX North. Visit "The Fuller Force" on the web today at http://www.thefullerforce.com/.
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Bryce - I can agree with that. FSBO people are looking to save money. Well, the type of buyers that are looking to buy directly from a seller are either broke and looking for a deal, or rich and looking for a steal.