Thursday, August 17, 2006
For Sale By Owner-FSBO
Only 53% of all FSBO's decided to sell their own property to save the real estate commission. Before you decide to sell your own property, educate yourself on what you will have to do for the savings.
Last year, 13 percent of all sellers chose the FSBO (“For Sale By Owner”) route, according to National Association of Realtors 2005 Profile of Home Buyers and Sellers. This is down from about 18 percent eight years ago. But more telling than the decline in FSBOs is the fact that more than a third of all FSBOs sold their homes to someone they knew prior to the transaction. This means that only 8 percent of all home sales are arm's-length FSBO transactions.
This ever-decreasing band of risk-takers, ventures into the land of pricing, marketing, screening, scheduling, showing and paperwork, with the goal of saving some money. It's often an experience they find less than rewarding.
Only half of last year’s FSBOs say they plan to go it alone again, so expect to see these numbers go down even further in the years ahead.
Several factors appear to account for the decline in for-sale-by-owners: the increasing complexity of the transaction process, with more disclosures and legal requirement than ever before; the amount of time required to market and show property; and security concerns about the motivation of strangers dealing directly with owners and walking through their homes.
The most difficult tasks for FSBO's:
* Understanding and completing the paperwork.
* Knowing how to prepare the home for sale. (presentation/repairs)
* Getting the price right. (especially in a buyers market)
* Selling within the planned timeframe.
* Marketing the property.
* Having time to show the property.
* Helping buyer obtain financing.
Tips to note should you decide to go it alone:
* Only show the home by appointment. (open house is a security issue)
* Know what other comparable property is selling for. (don't give away your savings)
* Only show to a qualified buyer. (a letter of credit from their bank)
* Get rid of any extra "stuff" and clean it. (first impression is very important)
Before I became a real estate agent, I tried to sell my home on my own. We did open houses and had a lot of traffic who were not qualified buyers. Sometimes I thought they were looking at my personal property to see what they could steal later! I spent money to be on the MLS, have a attorney draft up a purchase agreement, and time and effort to market (fliers, signs, newspaper ad) the home. It did not sell in my timeframe so I pulled it off the market. I knew my bottom line that I wanted from the proceeds, so I contacted a real estate agent and we worked the numbers. In 3 days I received 2 offers, one above my asking price!
Should you still decide to go it alone, I wish you good luck.
Last year, 13 percent of all sellers chose the FSBO (“For Sale By Owner”) route, according to National Association of Realtors 2005 Profile of Home Buyers and Sellers. This is down from about 18 percent eight years ago. But more telling than the decline in FSBOs is the fact that more than a third of all FSBOs sold their homes to someone they knew prior to the transaction. This means that only 8 percent of all home sales are arm's-length FSBO transactions.
This ever-decreasing band of risk-takers, ventures into the land of pricing, marketing, screening, scheduling, showing and paperwork, with the goal of saving some money. It's often an experience they find less than rewarding.
Only half of last year’s FSBOs say they plan to go it alone again, so expect to see these numbers go down even further in the years ahead.
Several factors appear to account for the decline in for-sale-by-owners: the increasing complexity of the transaction process, with more disclosures and legal requirement than ever before; the amount of time required to market and show property; and security concerns about the motivation of strangers dealing directly with owners and walking through their homes.
The most difficult tasks for FSBO's:
* Understanding and completing the paperwork.
* Knowing how to prepare the home for sale. (presentation/repairs)
* Getting the price right. (especially in a buyers market)
* Selling within the planned timeframe.
* Marketing the property.
* Having time to show the property.
* Helping buyer obtain financing.
Tips to note should you decide to go it alone:
* Only show the home by appointment. (open house is a security issue)
* Know what other comparable property is selling for. (don't give away your savings)
* Only show to a qualified buyer. (a letter of credit from their bank)
* Get rid of any extra "stuff" and clean it. (first impression is very important)
Before I became a real estate agent, I tried to sell my home on my own. We did open houses and had a lot of traffic who were not qualified buyers. Sometimes I thought they were looking at my personal property to see what they could steal later! I spent money to be on the MLS, have a attorney draft up a purchase agreement, and time and effort to market (fliers, signs, newspaper ad) the home. It did not sell in my timeframe so I pulled it off the market. I knew my bottom line that I wanted from the proceeds, so I contacted a real estate agent and we worked the numbers. In 3 days I received 2 offers, one above my asking price!
Should you still decide to go it alone, I wish you good luck.
