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Recipe for FSBO Success

By
Real Estate Broker/Owner with Wendy Smith Real Estate

For Sale By Owner

Statistically 79% of home sellers will enlist the services of a Real Estate professional to sell their home.  

The other 21% typically include builders, rehabbers, speculators, attorneys and those that have experience selling real estate.

This 21% also includes those sellers who just don't want to pay any real estate commission.

 

3 Critical Steps for the Do-It-Yourselfer:

 

Step One.  Price, Price, Price!

Any seller absolutely must know the market value of his or her property.  It is standard for the listing agent to provide a Comparable Market Analysis (CMA) to sellers as part of a full service listing.

Market Value is determined by analyzing recent comparable sales of similar properties, and making appropriate adjustments to find the value of the subject property.  This approach is called the "market approach" and is the method used by most real estate professionals. 

tip: Financial needs of the seller are not a factor determining Fair Market Value (FMV).

Reasons to avoid over-pricing or under-pricing are fairly obvious, no need to take up space here.

FSBO sellers may consider paying for an appraisal to learn the FMV of their property.  The cost of an appraisal varies for different areas but expect to pay no less than $300 or so.  Various Internet sites will provide valuations but fail to have the advantage of previewing your home - Internet sites simply cannot account for upgrades, deficiencies, etc.

 

Step Two.  Marketing

Placing a FOR SALE sign in your yard along with an ad on craigslist just isn't going to cut it.  

An estimated 90% of all home buyers begin their search for a new home online.  

That's huge.  An internet presence of your home is critical.  More about this in a moment...

 

Step Three.  Don't get greedy.  

This step could have been called Know Your Limitations.  There are two parties to every real state transaction:  seller and buyer.  Typically when a property is listed, the seller pays the commission which is split between the listing agent (who represents the seller) and the selling agent (who represents the buyer).   

Save Commission

 

The driving factor for most, if not all, FSBO sellers 
is to "save the commission".

 

Tip:  It is a ginormous mistake to assume most buyers buy homes without a Realtor.  Buyers shop for homes without a Realtor and buyers may call you direct, but more times than not, it is simply because they want information about the house immediately and believe it or not, some buyers actually don't want to bother their agents with every yard sign they see but in the end,

buyers rely on their agents for much more than simply finding a house.  

Most likely your buyer will need to obtain a loan to complete the purchase of the home.  99% of sellers have little or no idea how to help a buyer find and get approved for a purchase loan.  

FSBO sellers who are comfortable doing the "listing" side of selling their home -marketing, screening buyers, staging, showing, negotiating, dealing with home inspection issues, and all the other seller-related tasks may save the 3% commission typically paid to the listing agent but, 

Do not underestimate the value of Buyer Agents!

It is in the best interest of any seller to cooperate with buyers agents...and that doesn't mean adding their commission to your asking price.   It is so important that it bears repeating:  Do not underestimate the value of buyers agents.  Don't be greedy to "save" the full commission, just do the job of a listing agent, let the buyers agent do their job.  Even the best listing agents rely on buyers agents to sell their inventory.  It's just the way it works.

 

Step One.   Pricing is critical - with or without an agent - the property must be priced right.

Step Three.  Know your limitations.  Buyers agents are your friends, they play a vital role.

Now, back to Step Two.  Marketing.  A very powerful tool for any seller is the Multiple Listing Service (MLS).  Properties listed in MLS gain exposure to 1000s of websites including all the biggies such as Realtor.com, Zillow, Trulia, Yahoo, MSN and thousands (yes, thousands) more.  

A Limited Service or Flat Fee listing may be the perfect solution for the do-it-yourself seller or FSBO.   Wikipedia definition of Flat Fee MLS.

Many real estate brokers offer non-traditional listing agreements.  Some offer ala carte fee-based services or "add-ons" to Flat Fee or Limited Service agreements.

Tip:  It is highly recommended to enlist the services of a local Flat Fee Broker
rather than the cheapest provider found on the Internet.

Wendy Smith Real Estate is now offering these services to in Florida to Pinellas, Pasco and Hillsborough counties.  We believe For Sale By Owner is not a viable option for all sellers but for those sellers experienced enough to sell their own property - we offer Limited Service Listing agreements and Flat Fee MLS.

PS - Flat Fee or Limited Service Listings is not suitable for short sales - visit Wendy Smith Short Sales for more info.

 

Posted by

Counting Blessings & Serving My Community,

Wendy Smith

 

 

Comments (1)

Debb Janes
Nature As Neighbors - Camas, WA
Put My Love of Nature At Work for You

I am always amazed how folks assume they can sell a home on their own. NOT. Have a good weekend, Wendy. 

Jun 13, 2014 06:59 AM