WANT TO KNOW THE SMARTEST FSBO AROUND ?? It's that new home builder that is killing the market for resale home sellers, resale listing brokers and the hard working agents who want to help home owners sell that overpriced listing. It's a good idea to include ALL recent sales in CMAs including recent sales, FSBOs and new home sales. But, WAIT A MINUTE. Aren't new homes also FSBOs? Overlook them at your peril. They are, in some areas, the toughest competition a listing agent has.
This article was inspired by Brian Brady's article today about BUILDERS.
What? You never thought of builders as FSBOs?? Well, think about it. Most have their own sales staff who may or may NOT be actively licensed real estate salespersons or brokers. Most have their homes in the MLS listed as Exclusive Agency listings which gives them the right to sell the properties themselves and not pay a high listing fee to the licensee that entered them in the MLS. Most have their own contract.
NEW HOME BUILDERS ARE THE ULTIMATE FSBOs.
So, when an agent has a lead or referral to be interviewed by a prospective home seller, are the new home sales included in the CMA that agents love to give away?? Not always and that is a huge mistake. Have you visited a new home model lately?? Have you seen the price reductions over the past year?? Have you followed the incentives offered by new home builders?? Have you seen those builders that are offering 4%, 5% and higher co-ops to agents who introduce a buyer?? Oh, and what about the $10,000 or $25,000 BONUS offered on top of the 4% co-op?
Prices for new home sales have been slashed in my market by anywhere from 10% to 20% on average from a year ago. Yet, resale homes sit and sit and wait for buyers to make offers or simply hold out for prices that are not anywhere near competiting with the new home builders in the area.
FSBO builders don't care about equity. They care about profit. Standing inventory is a cash drain on builder's credit lines. Most builders have to start making interest payments when construction is completed. Every month that they carry a home reduces the profit from that property. You dont hear that kind of talk from home owner occupany sellers. What we hear is "I want" from my home. Or, "But, Joe down the street sold his home for more than that last year". All of which simply means that the home owner occupant does not understand the market and surely doesn't understand the competition.
FSBO SOLD HOMES ARE NOT ALWAYS IN THE MLS
Many builders have an arrangement with local brokers/agents to enter their homes in the MLS. These builder listings offer co-ops to buyer's agents, but there is often little remuneration to the listing borker or agent. These listing are often entered in the MLS in return for contingency sale listings. Lots of new home buyers have homes to sell and this is good business for a listing agent. But, they don't always do the follow up with SOLD information to keep the MLS accurate. The listings expire, are withdrawn or, even if the listing is entered in the SOLD category, not all of the details of the contract are revealed such as closing help, financing incentives, etc. So, an agent using a builder SOLD as a comperable may not be getting the complete picture. That handicaps the agent when they are recommending price ranges for prospective listing clients.
GET TO KNOW YOUR COMPETITION - Visit those new home FSBO sellers and understand how they compete with resale listings in the area. It could save you from overpricing a home or accepting an over priced listing.
AN OVER PRICED LISTING WILL EAT YOU ALIVE
FSBO, NEW HOME FOR SALE BY OWNER BUILDER
Comments(3)