This post is adapted from an email that John sent to a prospective client this afternoon who is considering selling their home For Sale By Owner and also looking to buy another home. As I read it I thought it would make a great blog post. It is a seller's market and inventory is low in most areas and price ranges in our area, but not in all areas, not in all price ranges and not for all homes. However, in these types of markets it is common to see people think that they can do it on their own and save commission despite the fact that there are statistics that show that often times FSBO homes take longer to sell and sell for less than if listed with a REALTOR®.
We appreciate your candor regarding the scenario that you are looking at doing. Making an offer contingent in this type of market and especially during the busier sales season of the year will generally negatively impact a seller’s perceived value of your offer. There may be other ways to achieve your goal with the help of a good mortgage loan officer, but if you do have to sell your home first there are ways we are able to structure it to make your offer as strong as possible. I am going to be honest though, making a contingent offer on a home that is going to be sold FSBO is not going to look that strong. Agents generally want to know about the home, know who is going to list it, know the marketing plan, the area and the price in which it will be listed in order to allow them to best advise their client on if taking a contingent offer is worth their time.
Regarding how we handle listings and what we can do for you if you choose to list with us instead of For Sale By Owner: We have a very specific process for listing that works very well. We offer a full service listing approach. We use as much technology as possible to market our clients' homes. When a seller hires us we go through the process as noted in our sales & marketing procedures that I will go over with you. The market analysis paired with a working knowledge of market trends specific to your type of house is a key piece of the foundation to effectively listing a property. Upon signing all the listing paperwork we use pre-MLS marketing while we are waiting for completion of professional photos and 3D tours. Pre-MLS marketing is completed in an effort to create a buildup in initial activity that makes the first few days on market even more effective than the traditional first few days on MLS. We include professional photos, YouTube virtual tours, and 3D Matterport virtual tours where folks can virtually walk through your house with the proper VR equipment. If they do not have VR equipment available to them they can virtually walk through your house interactively in a style similar to Google Street view but in higher definition on their connected device. An additional feature that we include is a floor plan that maps the house out for a potential buyer. Overlaying these 3 types of media helps a buyer get a good feel for your house. These tools are very helpful to out of area buyers trying to figure out if they should make the trip to town to view your house.
Our website also allows us to do reverse prospecting. We have thousands of buyers using our website and we are able to plug in the criteria of your house and pull a “best fits” list of all the folks that are searching for a house with your home’s specific characteristics. Many of these prospects are working with another agent but we like them to use our website as they help us build an active database with contact info to best promote our listing clients. We also syndicate your listing to hundreds of websites locally, regionally, nationally, and internationally. Our goal is to get your house in front of anyone that may be looking for a house like yours.
Throughout the listing we follow up with buyer's agents to get specific feedback on our clients' homes and forward that to you so you know how buyers and agents are responding to your house. We have a couple additional tools that help us to track online activity for your house that you receive weekly. Beyond just how many online viewings we are getting one of these tools allows us to compare time that buyers are spending with your house online compared to other comparable houses. We closed on a house last week that was on market for nearly 4 weeks before getting an offer. That length of time would generally suggest in a market like ours that the house is overpriced; however we were able to see that our online activity was suggesting the opposite and within a couple days we received a full price offer. Information is a powerful tool that helps us to have the most accurate bead on the market which helps our clients recover the greatest amount in the most efficient amount of time.
I have included a couple examples of recent listings to give you a feel for the use of some of the tools noted above. Click Here to View Listing #1 Click Here to View Listing #2. On both of these houses the owner is benefiting from the pre MLS marketing approach with a busy first few days on market. The benefit to numerous showings in the first few days on market and even overlapping showings is that serious buyers know what the market is like, and waiting to view a new listing while another buyer is looking reinforces the need to submit a quality offer in a timely manner. The Snohomish house is selling for above initial list price and more than $15k above the 2 most recent comparable properties in the subdivision that were listed and sold just down the street. The Driftwood house has also received a higher rate of showings than would normally be anticipated in a traditional listing approach and multiple offers within 3 days of coming on market and is pending as of this afternoon.
Many folks that choose to go FSBO do have luck selling their houses in an appreciating/hot market. It is easier to get a house under contract during a “seller’s” market, but higher demand created by greater exposure can often benefit a Seller financially in the sale of a house or at least get “cleaner” offers. In addition, most FSBO's do end up having to pay commission is some fashion or another, as many buyers are working with a buyer's agent and those agents may have an agreement with their clients on how they are paid if the buyer purchases a FSBO house. That FSBO seller will pay this commission or the buyer will, but will likely adjust their offer price to offset and cover the compensation. This cuts into the anticipated savings of eliminating paying commissions and only the buyer has representation.
I guess the question is: Will you really net more going FSBO considering the narrower scope and smaller net cast by going that route? You might. You also might not. The follow up question to that: Is that possible increase to your net worth the work, worry and lack of personal representation? If it isn’t and you see the value in our services and representation we would be glad to help. If you decide selling FSBO is the route you would like to go no problem at all.
Have a great weekend,
Associate Broker, GRI