Horrible FSBO Mistakes... Greg's list of 26 Examples from A-Z
As a buyer's agent I have been retained a few times to present my clients' offer to a seller. It never works. It is incredibly difficult to negotiate with the seller directly, having to explain forms and trying to diplomatically explain why their house is not worth what they want to sell it for. Greg has a pretty comprehensive list of what sellers are up against when they try to sell their home without hiring an experienced, professional real estate agent.
After reading Greg's post, if you are still determined to do it, get the book How to Sell Your Home in 5 Days.
We all meet people who believe doing it yourself is always better than paying someone. In some cases, it's true. Many of the people I've come across say they've had great success in selling their home in rural areas or high in the mountains where everyone knows each other. To market their home they need nothing more than a conversation at the local coffee shop. Maybe they live on a busy road in an area that burns of high demand. For those people I can sort of understand why they initially would want to be their own representative. I still don't agree with it, but whatever.
Here are some problems many FSBO's run into when attempting to be their own agent.
1. You have a very high probability of selling your home to a buyer who has their own agent. That's almost a fact, especially in my market. This means you are expected to use documents that the agent is used to using. You can't draft up your own papers or rely on the local title company "to handle everything." It's entirely possible that FSBO and a Buyers agent could work in harmony, so long as the homeowner isn't being overly defensive and difficult just for the sake of being so. Many FSBO's attempt to over compensate by pretending to be a "know-it-all." The been there done that mentality will only create friction and delay. Agents prefer a smooth and positive transaction. We aren't lawyers trying to cut each others throat and argue a case.
2. You cannot expect to have great success if you expect buyers agents and everyone else to show your property on YOUR SCHEDULE. Your home will get skipped! There are over 50,000 homes available on the Houston MLS. Inventory is high and agents and buyers are not interested in playing around with showing a FSBO property after supper and after they get home from work. This will almost always cause you a lost sale. At the very least, retain the services of a discount broker who can put a lock box on the door. Just make sure they are using a showing service to help facilitate showings.
3. FSBO's tend to know the market from their own set of eyes. Since they do not want the services of an "overpaid and unnecessary Realtor" they will rely on Zillow and even HAR for comparable sales. The problem is that Texas is a NON-DISCLOSURE state. This means comparable sales are not delivered to Zillow and even HAR.com doesn't promote actual sales prices. Instead, they show you the LOAN AMOUNTS. The only TRUE way to get a value is through a MEMBER OF THE MLS. This includes Realtors and APPRAISERS who can give you this vital information. Do it right the first time!
4. FSBO's almost always over list their home and typically under sale it. Those are statistical facts. Over listing your home, padding it and assuming certain upgrades are worthy are one of the BIGGEST mistakes a FSBO makes. Remember, 80% of pricing is PRICE.
5. FSBO'S think they understand marketing. Here are a few examples of what FSBO's typically try to do:
A) They call every Real Estate office in the area to promote their property.
B) They promote their listing in newspapers, ads, bulletins and even magazines.
C) They put a sign out front with faded ink and flyers that miss critical information or they provide TOO MUCH information.
D) They hold their own open house.
E) They do not list their home on the web. If they do, it's on FSBO.com or some other website that almost NEVER gets buyer agent traffic or even BUYER traffic. This false sense of web advertising is very common.
F) They give flyers to their neighbors.
G) They think they can find their own buyer with no agents involved. (happens about as often as you see Haily's comet."
H) They think they can save $ by not using an agent.
I) They think Realtors under list properties for a quick sale. The only way a seller could say this is if they actually understood the market from an MLS perspective. And sellers aren't members of the MLS unless they're a licensed Appraiser or Realtor.
J) They assume if they list in March, they'll sell in June - 99% of the time.
K) They list their home at odd prices like $123,479.00. They don't understand MLS pricing strategies.
L) They assume furniture, appliances and water softener systems increase appraised value.
M) They forget that the home MUST APPRAISE, regardless if a buyer wants to pay 20% above the comps.
N) They stay home during showings and bother everyone.
O) They interrogate buyers and sometimes think they can demand the buyer use their local bank for approval.
P) They think listing agents put the home on the MLS then go to sleep until an offer comes in.
Q) They think calling buyers agents after the home has shown is a form of aggressive marketing.
R) They assume the title company can do EVERYTHING.
S) They don't understand how to negotiate repairs. And they believe home warranties are unnecessary.
T) They refuse to PAY ANY CLOSING COSTS! THIS IS NOT THEIR RESPONSIBILITY! They will, however; come down 5 grand off the price. They don't understand that it's a wash!
U) They use a divorce lawyer to represent them throughout the process instead of a REAL ESTATE ATTORNEY.
V) They don't understand what Functional Obsolescence is and how it DOES pertain to their home.
W) They think what properties are LISTED FOR is what their own home must be worth.
X) They think if they paid X than that's what they should at least sell for. They don't want to "give their home away."
Y) They don't understand loan time lines, problems, issues and requirements. VA loans, FHA 203k and Conventional are all different and they all require expertise in working. Who pay's what is important.
Z) This is reserved for any fellow Realtor who'd like to add something. I could do this all day! :-)
94% of 20-44 year olds use the Internet to browse for their first home. Your home as to be strategically exposed and syndicated across the world wide web. The process of loans, how deals close and what to expect changes constantly. The hurdles have gotten taller and more difficult.
If you think paying X for a Realtor is expensive, try not using one.
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The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.
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