SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats
The SWOT Analysis is a strategic planning and decision making tool you can use to evaluate your Strengths, Weaknesses, Opportunities, and Threats involved in the project of selling your house yourself. In this example, I will use the table to illustrate some of the issues the FSBO should consider about selling their home themselves. Every SWOT Analysis is subjective by nature, as no two people are identical. We all have our own abilities we bring to the task at hand. Use this table only as a guide to analyzing your own abilities.
More information can be found at http://en.wikipedia.org/wiki/SWOT_analysis.
Desired Goal: To sell your house for the highest amount possible while avoiding hiring a full-service real estate agent and paying commission.
| STRENGTHS - Seller knows condition of house
- May have successfully sold FSBO during 2003-2005 seller’s market
- May have modern business skills: negotiation, financial expertise, marketing, project management, risk management, consulting
- May be Internet savvy & use online tools extensively
- May have a friend or relative in business
- May own other properties and is familiar with real estate transactions as a consumer
- May have real estate license or be an attorney and is prepared to disclose and assume the additional legal liability required of those licensees
- All pre-sale inspections and disclosures are completed
- House is in “ready to show” state
| WEAKNESSES - May have “seller’s market mentality” in current buyer’s market
- Urgent need to sell due to job change, debt or no real need to sell at all
- New point of sale regulatory disclosure and compliance requirements not fully known
- May not qualify buyer financials properly
- May not be able to show house during hours needed by potential buyers
- May be unfamiliar with home staging to sell house faster for higher price in current buyer’s market
- Property may sell or appraise for less than the current mortgage debt
- May not properly apply existing business expertise to real estate transaction
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| OPPORTUNITIES - Hopes to save on real estate commission fee
- Use of commoditized (passive) Internet services to sell home
- Internet technology can be specifically targeted to move the transaction forward
- Seller may have high equity available for purchase of next property and investment
- Seller can perform extended agent screening process to find the best advocate with modern business skills for the 2007 buyer’s market
- Pay for cost of sales & consumer debt from escrow proceeds
| THREATS - Bargain hunters looking for deals
- Buyers offer automatic 6% discount from any asking price
- Infomercial investors & fraudsters
- Thieves and burglars
- Market prices currently in decline
- Little home value appreciation
- “Old School” agents not adapted to current market or technology
- “High Volume” agents with minimal contact and assembly-line processes
- Potential for long term damage of relationships with friends & family in real estate business
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Paul Caloca
Realtor, EcoBroker
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