How to Sell a Home – List With a Realtor or For Sale by Owner (FSBO)

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There are a variety of factors that motivate home owners to sell their home without the assistance of a Realtor. Primarily it is to save the real estate commission or the concern that there is not enough equity to cover the cost of selling and mitigate the expense of the new residence. If the later is the issue there may be no alternative but to go it alone. On the other hand realtors are quick to point out that statistics indicate that homes listed with a Realtor will sell at a considerably higher price than the “for sale by owner”. Considering the market exposure the Realtor can provide it would seem logical to assume there is validity to this claim but there are certainly exceptions.

There is another irritating but compelling rhetoric that Realtors frequently allude to when soliciting a listing from a home seller. “The three most expensive non elective events that most people are potentially faced with are doctors, lawyers and housing. Would you perform you own surgery or defend yourself in court? Why wouldn’t you need a professional to sell your home”? This is possibly a valid analogy but does not necessarily encompass the factors that motivate the seller to take on the task personally.

There are services available that provide the guidance, forms, signs and legal advice at a reasonable price to technically get the job done. There are even on line listing services that may provide some exposure and augment media advertising. If the owner has a “hot” property that shows well, is exceptionally maintained and is in a “hot” neighborhood there is a good chance for a favorable outcome in the effort to sell without a realtor.

As they say “the devil is in the details” and that is where the Realtor has a great advantage. A well located property properly “staged”, properly priced and well exposed to the buying public will sell quickly in most markets. Staging means that it has been brought to market condition and that there are no blatant eye sores. Staging, pricing and particularly exposure are the “big three” when it comes to a timely sale and the absence of any one of the three can create a deficiency that is hard to overcome. Homes that sit on the market for months on end become “shop worn” and usually sell for a greatly reduced price than they would if the seller subscribed to an objective approach from a professional. In addition, the FSBO has been making mortgage payments during the months it has been floundering on the market.

The real estate company listing the property will normally bring a full basket to the first picnic. They know that the best way to avoid an expired listing and significant expense is through a quick sale. Exposure is the key and owners can’t compete with the realtor’s resources. The listing is promoted to all of the agents in the company’s office and multiple listing services expose the listing to hundreds or even thousands of agents and their clients. Open houses accompanied by media advertising on weekends are very effective. Statistics indicate that a high percentage of sales are to buyers who live within a close proximity to the listed property because of the reduced disruption of life style factors. Open houses can bring them in.

When there several competing properties on the market in the same neighborhood the “for sale by owner” is additionally handicapped. Most buyers do not relish the prospect of negotiating with the owner so the exposure generated by the competing listings does not necessarily mean more exposure for the FSBO. The agents showing those properties may route their clients away from the FSBO when possible and will frequently invent a reason for the buyer to avoid that property. Unless the community has exceptional attributes, there are only so many potential buyers for that community at any given time. Those who sell first have a distinct advantage.

Furthermore, it is difficult for the homeowner to evaluate the competition and the market in general. Gaining access to the competing properties on the market and recent comparable sales is cumbersome at best and there are frequently factors that are not readily apparent. An example is the comparable property that sold for a great price but the contract required the seller to pay 6% of the buyers closing cost. This is not an infrequent occurrence in today’s marketplace.

In summary, this article does not make a very good case for the prospective FSBO but those who are selling an exceptional property in a desirable community might give it a try. It may not damage the realtor’s effort when finally listed but don’t let the ego interfere if it doesn’t go well in the first thirty days. For those who must save the real estate commission, consider interviewing three high producing realtors and presenting the problem to them for a solution. Realtors and their companies spend a considerable amount of money marketing their listings so if they will not accept the listing at or above the sales price required to make the transaction work one must assume that there is no other choice but become a FSBO or make other plans. If they all concur on a listing scenario that will solve the problem and everything else is equal, pick the one who is the most knowledgeable about the recent history of the community but make sure the agent is committed to aggressive marketing. One should consider that it is frequently the real estate agent that rejects the overpriced listing that is the wisest and most professional.

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Source by Michael B Roche

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