FOR SALE BY OWNER (FSBO), Things to Consider

Selling

So you want to sell your home.  The market is hot in your area and you think you can do it on your own and be part of the FSBO crowd.  I applaud your initiative but before you make that leap, there are some things you should consider.

          ♦ FSBO’s represented 7% of the 2017 Florida Market; 91% of all homes sold were through Licensed Agents or Brokers.

         ♦ Local market analysis and industry knowledge are critical to pricing your home correctly and FSBOs sold for about 24% LESS than REALTOR® assisted homes.

         ♦ FSBOs average time on the market before being sold is around 12 weeks; REALTOR® assisted homes sold within 3 weeks on average with a significant amount selling in less than a week!

         ♦ Market visibility is critical; you can't sell it if no one knows about it and advertising can be costly; do you know how to get your home on the local MLS?

         ♦ There are up to 20 or more documents required by law to sell your house; they can be complicated and time consuming to fill out correctly.

         ♦ Showing your house requires a lot of time, effort and personal commitment; properly staging a home for viewing is key to making a great first impression!

         ♦ Real Estate Agents are less inclined to show clients FSBOs further limiting buyer visibility.

 Lots of things to consider but let me touch on a few key items from the above list.

Competitive Pricing. What’s your home worth?  Is it listed too high or too low?  Where do you find this info? Once you find the info, how do you determine how to use it? If you do a search on this you will probably find something written up on how this is done.  If you want to do it the easy way, hire an appraiser.  An appraiser is trained to do this but if you go down this path, make sure that they are licensed and certified.  If you don’t want to shell out the money for an appraiser then you will need to understand your local market so you can find comparable homes with which to determine your homes value.  This can involve a lot of work and usually involves scouring through local county records to see what houses have sold for and when. 

You could try to use Zillow which shows you the prices of properties when you zoom in but be aware that the price is considered what they term a “Zestimate®” and may not be accurate depending on when the last market analysis was done for that area. If you look up what exactly a Zestimate® you will find it on Zillow and they state, “The Zestimate® home valuation is Zillow's estimated market value, computed using a proprietary formula. It is not an appraisal. It is a starting point in determining a home's value. The Zestimate is calculated from public and user-submitted data, taking into account special features, location, and market conditions.”1

Getting your home priced correctly will result in a speedy sale or long drawn out affair if it is too high. On the flipside, if it sells quickly, you have to then ask, could I have gotten more? Was I priced too low?  There is a lot to consider when pricing your home and it is not nearly as simple as many believe it to be.

Market Visibility. As stated above, you can’t sell what know one knows about.  Can you get your property on Zillow?  Yes, Zillow is very DIY friendly when it comes to listing a house and, it’s free. Additionally, Trulia.com is partnered with Zillow so you can list it with them as well.  What about Realtor.com?  Yes, you can list it with them as well however, they are not free and, you will have to provide a buyer’s agent commission. This actually ties in to the very last bullet of the list above but I’ll touch on that a bit later.

This brings me to a discussion on the Real Estate Industries lifeblood, the Multiple Listing Service or MLS.  Every home sold through a real estate broker is put into the local system which in turn ties into a plethora of tools for agents and brokers to use to help increase home visibility and allows for market research.  If you are serious about selling your home then you want to get it into the local MLS. So how do you do this with a FSBO?  Historically, you usually didn’t.  I say “usually” because there were ways to get FSBO’s into the MLS but it was in cooperation with a broker.  Times have changed and there are now companies that will list your home in the local MLS for a flat fee, all you have to do is search for them.  Additionally, there is still the option of cutting a deal with a local broker who may also charge a flat fee, commission or both.  The bottom line however is that getting your home into an MLS will still cost you money, time and effort if you are doing it on your own.

Showing your Home. This brings me to the last point I want to cover, showing your house or getting it shown.  One word, “Staging.” Let’s say that you are doing an open house or have someone that is interested in your home and has set up a time to see it. If you haven’t prepared the home to show well then the results will be less than desirable.  Staging is simply setting up your home so that it presents well and gives a positive first impression. If you are unfamiliar with this, I recommend you do a search on it.  Remember, what you want when someone walks in the door is for them to say, “WOW!” This ratchets up the interest and will result in looker’s becoming buyers.

It is a lot of effort and, if you are living in the house, it requires that you keep things tidy so that you can quickly prepare the place at a moments notice when you get a call that someone wishes to see the home.  This brings us to the point I touched on in the market visibility section about agent commissions and ties in to the last bullet of the list. Even a well staged home may not get you a lot of traffic if there is no incentive for agents to show your home.

Agents don’t get paid a salary or hourly wage, they make money via commission on the sale of a home.  You can have a home that is wonderfully marketed, and beautifully staged but if you are not offering any commission to a buyer’s agent, it will probably not get shown.  Even if a buyer’s agent does show your home, he or she will need to get paid if their buyer wants to purchase it so that money will need to come out of somewhere.  In these cases, the agent will probably contact you first to see if you are willing to cooperate with them on a commission.  If you tell them no, they will walk away and take their buyer with them.

 That’s a lot of info and it is important to consider these things if your plan on doing a FSBO.  So what about using a REALTOR® instead of doing a FSBO, what are the advantages?  Well, let’s take a look.

     ♠ REALTORS® have a vast network reaching thousands of agents, brokers and buyers.

    ♠ REALTORS® provide accurate home values based on comprehensive market analysis to help you get the right price for your home.

    ♠ REALTORS® Provide widespread exposure and visibility through MLS, Social Media and other advertising methods at no extra cost to the seller.

    ♠ REALTORS® know the local market and will highlight the features and amenities that buyers are looking for.

    ♠ REALTORS® sell homes for more money and up to 75% faster!

    ♠ REALTORS® take the stress out of showings and open houses, they do it for you!

    ♠ REALTORS® are your advocates from start to finish and will fight to get you the best deal!

I think the most important thing to remember is the very last bullet, REALTORS® are your advocate, in order for them to do well, YOU must do well!  A good REALTOR® will work their hardest to get you the best deal possible as their success is directly proportional to yours.  What this really means is they do all the work for you!  That’s their job.  If they don’t, you probably need to find someone else. Sure, you will still have to do a few things but they are minimal compared to if you do it yourself and they are always their to field any questions or concerns you may have. 

So if you are looking to sell your home, do your research.  If you are up to it, have the time and resources then maybe a FSBO is the right path for you. On the other hand, if your time is precious and you don’t want to worry about everything that goes into selling a home, find a professional REALTOR® to work with. 

I will leave you with one last thought when considering a REALTOR®, sit down and talk to them. Not all agents are created equal and just because someone sells a lot of houses doesn’t mean they are the right agent for you.  Take your time to speak to several agents and find the one that you feel is best suited for your needs, you will be glad you did. 

1.  Zillow Corporation, “Zestimate ( Pronounced  ZEST-ti-met ).” Zestimate, July 25, 2018, https://www.zillow.com/zestimate/