Realtor Vs FSBO – An Unbiased Comparison

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I'm sure you've heard many arguments when or not a Realtor is better at selling your home than you are. Every Realtor, without fail, will tell you that they can sell your home faster and for more money than you can. They will even have statistics to prove their point. On the flip-side, almost every "For Sale By Owner" site on the web will tell you the opposite. So who do you believe when both parties are self-serving?

Being a Realtor with a working team and also the CEO of a For Sale By Owner website, I will attempt to take an unbiased approach to this argument and cover the pros and cons of each place. There are 4 points that a Realtor will base their arguments on and so I think it is only fair to address each of these points.

4 Points Or "Arguments" A Realtor Will Make

1. A Realtor can price your home more accurately.
2. A Realtor can negotiate the deal better than you can.
3. A Realtor can sell your home for more money.
4. A Realtor can sell your home faster.

So let's ask each question and talk about the real answers. For the sake of this discussion, let's first assume that the Realtor we are talking about here is an experienced agent that sells more than 12 homes per year. Why is that important? Because over 80 percent of Realtors sell 3 or fewer homes per year and can not really make any of the arguments listed above. How can they? The agents that only sell 3 homes per year have to relearn the business on almost every deal. This is true across the industry. There are too many "part-timers" for these arguments to be a blank statement for every Realtor.

CAN A REALTOR PRICE YOUR HOME MORE ACCURATELY THAN YOU CAN?
Up until a few years ago, the answer was most definitely "Yes" but that has recently changed. Let's compare.

Realtor
It is true that, on average, Realtors price homes more accurately than a FSBO seller will. Realtors have resources available to them to see all of the recent sales in any given neighborhood. They can also see all of the available homes currently on the market. By analyzing this data, they can make a fairly accurate prediction of what a home should sell for and even how quickly it should sell.

Seller – For Sale By Owner
Most sellers price their home based on what they "think" their home should be worth. Their pricing is based on very little accurate data other than what other homes are currently priced at that are still on the market. No Realtor would ever … or sooner, should never base a price on what is for sale but rather what has sold. With today's technology and the resources on the web, a seller can spend as little as $ 16.95 and get the same information that a Realtor uses. Now for the tricky part … forget any notice that your home is better than any other seller's home. Use this report and base your price on hard data and you can price your home as accurately as a Realtor.

Winner – It's a Tie … if FSBO sellers use the data available to them and take an unbiased approach in pricing their property.

CAN A REALTOR NEGOTIATE A BETTER DEAL THAN YOU CAN?
There is more to negotiating than just the price. With that being said, let's compare.

Realtor
There is no substitute for experience when it comes to negotiations. As I said before, there is more to negotiations that just price, there are repairs, time-frames and many other small details that become part of the negotiation. A Realtor has the ability to step back emotionally and really look at the deal in an unbiased way. They should be able to analyze the proposed price and use their data to support the selling price. Through experience, they can recognize which repairs make sense to accept, which ones can be settled with money and which repairs should be thrown out with supporting arguments as to why.

Seller – For Sale By Owner
It's hard to compete with experience when you are negotiating a contract. It's like playing cards. You get better the more you play. You learn when to hold fast, when to bluff and when to fold. This does not mean that you can not do it though. Here is where you have to weigh your options carefully. If you sell on your own and get the raw end of the deal on repairs or even lose a few thousand dollars on price because you did not have the data to support your argument, how much did you save by not using a Realtor? The average home seller saves $ 15,000 in commission when selling as For Sale By Owner. So if a Realtor could have saved you that $ 3,000 in the selling price and kept you from making that $ 2,000 in repairs, you are still ahead $ 10,000.

Winner – Realtor … but is stronger negotiation worth 6%?

CAN A REALTOR SELL YOUR HOME FOR MORE MONEY?
According to NAR (National Association of Realtors), "Sellers who use a real estate professional make 16 percent more on the sale of their home than do sellers who go it alone". Is this true? Let's compare and see.

Realtor
We talked about accurate pricing earlier. Accurate pricing in the beginning is key to getting the most money for your home in the end. Realtors have the data available to them to accurately price a home in the beginning. It should be a safe assumption that, on average, Realtors can in fact sell your home for more.

Seller – For Sale By Owner
As I mentioned earlier, FSBO sellers now have the same data available to them to price their home accurately. Accurate pricing is key to getting the most money for your home. It has been proven that if you price your home even 10% above true market value, you will only reach 30% of the potential buyers for your home. The longer your home sets on the market, the more inclined buyers will be to get aggressive with their negotiating in the belief that you are getting desperate. If you price 15% below market value, you will reach 90% of potential buyers but once again, buyers will think you are desperate to sell quickly and become more aggressive in negotiating on the price even lower.

So where does the 16% figure come from? The statistics that back this figure up, though incomplete at best, stem from past FSBO sellers using their gut feelings to price their home or simply listing in the local paper.

Winner – It's a Tie … again, only if FSBO sellers use the data available to them and take an unbiased approach in pricing their property.

CAN A REALTOR SELL YOUR HOME FASTER?
Let's hear their arguments and then compare.

Realtor
When you ask a Realtor how they can sell your home faster, their response is almost always "accurate pricing equals a faster sale" and "we offer greater marketing" or "greater exposure for your home" to drive more interested buyers. We have already answered the issue on pricing so let's move on to the "greater exposure" claim. A Realtor has one main marketing avenue. I am talking about their local MLS of course. The MLS feeds the Realtor's listings out to Realtor.com which is the largest real estate website in the world with over 5 million unique visitors per month. Only a Realtor can list a home on the MLS. They may also talk about magazine and radio ads but any honest Realtor will tell you that these are really there to advertise their brokerage and drive leads for their buyers agents. Very few Realtors submit your home to additional real estate sites, usually due to lack of know-how.

Seller – For Sale By Owner
How does a seller compete with Realtor.com? It is the largest real estate site on the planet after all. Thanks to the new technology available today, a few (not all) "for sale by owner" websites will syndicate your listing out to multiple real estate classified sites. The combined site visitor reach of these sites can be well over 12 million unique visitors per month. That's a lot more than 5 million. I am by no means discounting Realtor.com. In fact, I think it would be very smart to ensure your home is also listed on Realtor.com. So if Realtor.com and the MLS is only for Realtors, how can you list your home there? A few Realtors (very few) offer a flat-fee MLS listing. For anywhere between $ 299 and $ 499, a Realtor will list your home on the local MLS and Realtor.com. You will still be responsible for paying a buyer's agent 2% to 3% if they bring the buyer but that still saves you 3% to 4% in commissions. On a few FSBO Websites, you can get the great exposure of your local MLS and Realtor.com through a "Flat-Fee MLS plan". Plus, you can still reserve the right to sell "For Sale By Owner."

One important detail to consider here is the fact that a Realtor's service is free to buyers. Because these services are free, they would be foolish not to employ a Realtor. Realtors will NOT show a FSBO home unless they know they will get paid a commission. Plus, the MLS is the only place most Realtors conduct a home search for their clients. It would behoove you to list on the MLS if you are not seeing immediate success selling without the MLS.

Winner – Tie in regards to traffic and exposure … comparing a Realtor to FSBO without MLS exposure.

Winner – For Sale By Owner Seller … comparing a Realtor to FSBO with Flat-Fee MLS option.

VERDICT
So what does this all mean? It means that times are changing. There are enough resources available to you, the "For Sale By Owner" home seller to allow you to sell successfully, quickly and for top dollar. There are times when the need for a Realtor is real and necessary. Their expertise, experience and dedication to help ease your stress during these potentially difficult times can be worth every penny you pay. If you have the money and the ability to enlist the aide of a Realtor, then I feel confident in saying that you will not be sorry. However, if money is tight or you have the time to educate yourself on real estate, then you will be very rewarded. Good luck!

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Source by Joshua Harley

FSBO Tip – Hold Back Information

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Have you ever placed forty fliers in your "take one" box only to have all the fliers disappear within a few days? Yes, nosey neighbors took some, but they could not possibly have taken them all. Forty fliers gone and no phone calls – it's frustrating. Probably every real estate agent in the business has lamented the disappearing fliers phenomenon. This happens for one reason and one reason only. You broke a cardinal rule of marketing: never give away all of your information. Never play all of your cards, particularly without the ability to follow up.

If you give it all away, there is no reason for the house hunter to pick up the phone and call. One small adjustment can fix this problem with the potential to convert a looker into a buyer. What you need to do is withhold important information . That will spur the potential buyer to pick up the phone and call. Withholding square footage is savvy because that is something everyone needs to know. Price is irrelevant without square footage. Leaving off school district is another astute tactic. Almost everyone needs to know school district, particularly out of town buyers.

Savvy real estate agents have been holding back information for years. If you can get a potential buyer to call, you can get the conversation ball rolling and have a chance to talk up your home. A telephone conversation also gives you a chance to invite the potential buyer over for a tour. Car salesmen know that you can not buy a car if you are not on the lot. Only someone who walks through your home is a true potential buyer, so hold back information to increase that foot traffic.

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Source by Wade Young

Why You Need A STRONG Real Estate Agent

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Whether you are a homeowner who has decided to sell your house, or a potential buyer, who seeks the best situation, etc, one of the first steps you should take is to consider your true goals, and find the right real estate agent, for you! Notice, I have written, for you , because this is not, a one – size – fits – all, situation. What type of person do you seek for your agent, and which assets and attributes, do you consider most important and / or essential (for you)? Once you've made this decision, interview potential agents, and select one you consider to be STRONG , in terms of a combination of characteristics, prioritizing those you deem most essential.

1. Systems; solutions; serene: How important is the individual's emotional composition, etc, in terms of the degree of behaving in a calm, and calming manner? Will the agent clearly explain the systems he will use, and how they will help you and your situation? Do the solutions and approaches, make sense to you, and will you feel comfortable with, and confident in, the individual?

2. Trustworthy; timely: Do you feel confident in someone? How much trust do you have in them? Why do you feel that way? What is most important to you – the results themselves (only), or the path traveled? How timely will your potential agent be, to addressing your concerns, fears, needs, priorities, and questions?

3. Reasoning; responsive: Listen carefully, and decide if someone's reasoning aligns with yours, and whenever, it makes you feel comfortable and confident! How responsive is the agent, to your personal anxieties, concerns, questions, etc?

4. Options; opportunities: We all hope for an easy, stress – free experience, but it is not unusual, for some stresses, strains, obstacles and challenges, to present themselves! Can your agent think, and react on his feet, in a seamless, prepared way? Does he consider the options, and have contingency plans (also known as Plan B)? Can he recognize opportunities, and even, more important, is he capable of creating the best opportunity? Can he take lemons, and make them into lemonade?

5. Needs; nuances: Every house, and nearly every real estate situation, has certain specific, unique attributes or circumstances. Will the agent you choose, be able to best serve your needs, and recognize the best way to market for you?

6. Generate goodwill; growth: Quality agents must maintain cordial relations with others. After all, a real estate agent, often deals with others, especially, in a Multiple Listing situation. Seek someone who generates goodwill, while constantly seeking to improve, get better, and grow!

Does not it make sense to use a STRONG real estate agent? Opt for someone who will make the experience as stress – free, and successful, as possible!

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Source by Richard Brody

For Sale By Owner Signs – Why They Are a Big Mistake

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Every year, thousands of homeowners opt to avoid real estate commissions by listing their homes themselves without a Realtor®. It makes a lot of sense, why pay 6% of the sales price if you do not have to (especially in a down market like today)? There is nothing wrong with this thought process or the decision to sell for sale by owner. However, the decision to go to a hardware store and buy a cheap white and red For Sale By Owner sign with a place to write in your number with a black marker, actually is a mistake that should be avoided.

Rather than use a For Sale By Owner sign, you should do one of two things. First you can design a custom sign that does not say For Sale By Owner and looks like a real estate company sign, but with your contact information. It does not have to say Realty, Properties, Real Estate or anything like that. It just should not say For Sale By Owner, By Owner, or anything of that nature. It needs to look like a real estate broker sign even if the subdivision name or something else is in the spot where you would normally have the real estate broker name. The second option is, if you are using a flat fee listing company to gain MLS entry, use that broker's sign with your contact information on it (as long as it does not have the same type of 'for sale by owner' logos or URL's the cheap signs from the hardware store have). You will benefit from the professional look with the Realtor® logos, while still getting all the drive-by phone calls that any For Sale By Owner using a cheap sign would receive.

Almost any sign company including several real estate sign companies on the Internet can assist you in designing and printing a For Sale sign. It may have a house on it, a snow scene if you live in the mountains or just be professional-looking with stylized fonts in 2 or more colors. You should place an Equal Housing Opportunity logo on it. Make sure it is the standard size metal sign that you see in your area, such as 2 'by 3', and if possible, have it installed on a wood post or H-frame. Many major cities have sign installation companies that install and remove posts and signs for real estate agents; again this adds to the professional look and feel of the sign.

When your sign ceases to look like a cheap For Sale By Owner sign, you will cease to receive as many agents hassling you about listing your property with them. They are more likely to think you are already listed by an agent since your sign looks like a professional sign. (It is an ethical violation to approach the seller unsolicited and attempt to get a seller to cancel their listing and switch listing agents). Unrepresented buyers are less likely to realize right away that there are no agents involved and ask for a discount based on avoiding commissions. You are also less likely to be approached by scammers who attempt to prey on unrepresented sellers with various schemes like kicking back illegal payments to shill 3rd party companies. Finally, the professional -looking sign will tell prospective buyers that you are serious about selling; you did not just throw a cheap sign up on an overpriced property to see if anyone would pay your above market price.

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Source by Donald Plunkett