For Sale By Owner; It's not easy, is it?

By
Real Estate Broker/Owner with Jesse Clifton & Associates, REALTORS® AREC License #15292
Tonight while going to check on listing, I passed the home of an unrepresented Fairbanks homeowner. It was a new construction project the sellers either built to resell or were forced to sell due to circumstances. I've watched as this particular 'builder' spent the better part of a year and a half working to finish this house. What caught my eye tonight though was a very large handwritten sign with the words "I will pay all closing costs for veterans" written across it in big block letters. My first thought was to wonder if the seller was paying closing costs, closing costs and prepaids, closing costs, prepaids and reserves, or closing costs, prepaids, reserves and the veterans funding fee. Then I wondered if the seller knew the difference, but that's for another blog.

Fairbanks Homes

I haven't been in this particular house but I know all about it. The seller has been very diligent in posting the property to every known free listing site left on planet earth, or so it seems. There have been newspaper ads; line ads and large, expensive diaplay ads with pretty graphics but still it sits there. The sellers are frustrated with a home that won't sell and I'm sure are getting to where any offer would look good. At this point most agents could tell you what's wrong with the house without knowing anything else.

It's the price, silly.

Mr. & Mrs. Homeowner, I applaud your effort to sell your home yourself. Whatever your reasons for going it alone I wish you the best. I do have a few pieces of advice I would like to offer you though; free of charge. You have been given the tools to understand the market. God gave them to you when you were born. They're your ears. Listen to the market, because it's speaking to you loud and clear. As a mater of fact, when you nailed that gigantic neon green poster board sign to the tree on the corner of your property it began screaming, but you're not listening.

If you wish to jump into the real estate game and walk a mile in my shoes, there are a few things you really need to take care of.

1) Correct the price. You might want $335,000, but you're not going to get it. If your asking price doesn't mirror market value as established by a licensed appraiser, then nothing else you do will matter. If the price is wrong those saplings in your front yard will be shade trees before the house sells.

2) Understand that failing to have the home inspected during construction has reduced the number of people who can buy your home. Without your holding a General Contractors license with a Residential Endorsement and the PUR 101 and 102's complete; respectively the energy rating and building inspections, Alaska Housing Finance Corporation will not go near your home. In today's tight money market, the rate subsidy's from Alaska Housing make them a dominant player.

3) Create curb appeal. It's second, in my opinion, only to price. If the price is wrong and it shows poorly from the street, you're in double trouble. Buyers will barely slow down as they cruise down the street to the next house. Clean up the scrap building materials that are still lying all around on the "job site" after almost two years. Get the boat off the 'front yard.' While you're at it, get a front yard.

Fairbanks Homes 4) Make sure the inside of your home does not look like the outside. If you do get a buyer through the front door, they're not going to be able to see and appreciate the house over and though your clutter.

6) Make it available to buyers. Not everyone is willing to wait until Saturday afternoon or until you get home at 7:30PM to see your home. There are too many others on the market and yours is just not that special. Buyers will forget it ever existed by Saturday.

7) Hire an attorney. You'll need one to protect your interests when (or if) an offer comes in. While you can navigate a real estate transaction without a Realtor, it would be foolish to forgo both an experienced Realtor and an attorney.

Mr. & Mrs. homeowner, I offer this advice solely to help you get your home sold. The longer buyers ride by your "I'll give you the farm if you'll buy this house" sign, the longer they will think the entire market is on life support and that's far from the truth. Prepare it for the market or put one of those pretty azure blue gazing balls where the For Sale sign is now; it would make a much better lawn ornament.


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Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Jesse - You can take this however you like, but it is definitely a compliment - your writing style is one of the most similar to my own that I have found on ActiveRain.  Very well done post, my friend.  Sounds like some education was in order here.

May 21, 2008 05:20 PM #1
Rainer
41,053
Frank Jewett
tech4REpros - San Jose, CA

"At this point most agents could tell you what's wrong with the house without knowing anything else. It's the price, silly."

I only wish agents had the courage to share that simple wisdom with their clients instead of FSBOs.

Looking at high inventory in most major markets, clearly courage (honesty, integrity, common sense) is in short supply these days.  At least C.A.R. has finally switched from "There is no bubble" to "Be realistic with your clients", though it remains to be seen if that suggestion will be applied.

May 21, 2008 05:28 PM #2
Rainmaker
262,892
Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Hi Jesse!

Great post - I would like to copy verbatim and hand it to a seller/contractor that built a house in our old established neighborhood! No yard to speak of, incongruous architecture, and a price that might just beat the moonshot back in 1969ish!  If only we could have sellers understand that they are not doing themselves or their property justice trying to sell the homes themselves.  It reminds me of the commercial where the guy is operating on himself via his physician who is on the phone!  Thanks for a thorough observation on the downfalls of FSBO's!

May 21, 2008 05:36 PM #3
Rainer
33,124
John Ford
Security National Properties - Eureka, CA

fantastic! I couldnt have said it better myself!

May 21, 2008 05:48 PM #4
Rainmaker
210,358
Audrey June-Forshey
RE/MAX Realty Services - Darnestown, MD
GRI, Gaithersburg, MD

Isn't it funny how much over the market most FSBOs are?  They don't have someone to council them on reality.  I think it is funny how they are willing to pay everything for everyone else, but not a commission?  Don't get that?

May 22, 2008 12:57 AM #5
Rainmaker
413,435
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

Fantastic post, Jesse!  You nailed from the opening paragraph by pointing out the differences in closing costs, prepaids, etc.  Most sellers have no idea what each of those items are and how the verbiage in a contract can affect their bottom line.  Great job.

May 22, 2008 02:55 AM #6
Rainer
104,204
Rosario Lewis
DDR Realty - Newburgh, NY
GRI, SRES - DDR Realty - Orange County, NY

You have written a lot of good advice here for this FSBO. Have you talked to him in person yet?

May 22, 2008 12:33 PM #7
Rainer
138,335
Melody Botting
Broker Associate PenFed Realty - San Antonio, TX
You Deserve The Best

Some people think they sooooooo smart they can go it on their own.  In this case I would suspect one of the spouses worked or works for a builder.  Good luck with all that!

May 24, 2008 03:44 PM #8
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