4 Reasons why FSBOs end up hiring a Realtor.
I am a Realtor. I sell real estate. I can certainly understand a home seller’s reasons for wanting to save a commission expense. We all like to save money.
While commission rates are negotiable, in NW Wisconsin you are likely to pay 6-7% commission on the sale of your property. On a $200,000 home a 6% commission is $12,000. That’s a chunk of change.
Selling a for sale by owner (FSBO) is not a simple task and that is why most home owners hire a Realtor to get the job done. Nationally the success rate of a FSBO is very low. More than 80% of all FSBOs end up hiring a Realtor after unsuccessfully trying to sell on their own.
There are many reasons why selling For Sale by Owner (FSBO) is a difficult task to pull off.
#1 – The wrong listing price
Whether selling FSBO or with a Realtor, pricing is the first and most critical factor. If your home is not priced correctly you are not likely to sell for the highest possible price. More than 75% of marketing a home is about the price. Overpricing a home makes it almost impossible to sell.
Choosing the right price involves thorough research of similar properties that have recently sold in the local area and using the data to correctly set the selling price. The data may not be easy to find in more rural geographic areas.
Sometimes owners may have made recent improvements to their home, and therefore feel justified in setting a higher price. Unfortunately, most home improvement projects do not have a high return. Even improvements like replacing a roof or a septic system will not have much of a payback on the investment.
#2 – Lack of online exposure
Many for sale by owners only put up a handmade “for sale by owner” sign in the front lawn and expect that to do the job.
Others think that including their listing in one of the for sale by owner online sites like Isoldmyhome.com, forsalebyowner.com, or buyowner.com is going to bring lots of buyers.
Unfortunately that’s not the case. The for sale by owner real estate websites do not generate much buyer traffic in comparison to the sites that web savvy Realtors use to market listings.
Google a local search with real estate keywords a buyer would typically use as an online search, and you’ll see the results. Using my local town as an example, a buyer would use keywords like Gordon Wisconsin homes for sale or Gordon WI real estate. The top search results are sites that show listings by Realtors and Real Estate agents individual websites. You can check out your own town or city.
A web savvy Realtor will also use social media to market a home. Facebook, Twitter, YouTube, Google+, blogs, and other social media help drive traffic to a listing. For sale by owners generally do not have the expertise to market with social media.
#3 – Buyers want your commission savings
One very important consideration that most people who try to sell on their own don’t realize is that buyers understand you are not paying a Realtor to sell the home. These buyers tend to be bargain hunters and since the seller is not paying a commission will feel justified in offering less for the home.
Lots of for sale by owners end up receiving low ball offers. Even if the home is priced right, the seller can end up with a lower number on the bottom line.
#4 – Buyer qualifications and showing the home
One important detail that for sale by owners may forget is that buyers can view a home at just about any time of day or day of the week. A buyer will likely lose patience if the seller cannot accommodate their schedule. The seller will need to find the time to let a buyer have access to the home which can be a challenge if the seller is working full time or does not live on the property. It’s difficult to sell if the buyer can’t get in and see it. A Realtor’s job can make that part of the selling process easy.
Sellers also need to be aware of how to qualify potential buyers. If the buyer cannot get financing, there is no point in showing the home. A Realtor’s job is to make sure a buyer has the ability to purchase. Most buyers looking at homes today are pre-approved.
Sellers may not be aware of the closing costs associated with the selling side and procedures to bring a sale to the closing table. A Realtor will have the experience to handle the closing procedures, and to smooth out any bumps during the final closing procedures.