How To Sell Your Home Without A Broker.

Selling In a Buyer’s Market When Buyers Aren’t Buying

Housing sales of existing homes are off by as much as 40 percent right now, and new construction sales are off by more than 50 percent. It’s definitely a buyer’s market, but buyers aren’t buying. Lower interest rates, which typically keep buyers happy, aren’t enticing more buyers to the market. There’s also plenty of conflicting information about FSBO real estate listings  and whether they are up or down, yet more FSBO Web sites are going up on the Internet.

 

Which approach should you take: should you hire a real estate agent or should you create a FSBO listing for your home? If you have to sell your home now, conditions aren’t particularly favorable with either approach, but you can still sell your property and save money at the same time.

 

Most homeowners want to believe that their home equity continued to increase in value in the last few years, even when the value of other investments may have dropped. This isn’t always the case. Market forces may have eroded your equity substantially, leaving your house worth less than you think. In some cases, your home value may have stagnated, and depending upon when you bought, your home may be worth less now than the balance due on your mortgage.

 

If you’re selling, your first priority will be to get an accurate assessment of your home’s value. Even if you had your home assessed as little as a year ago, that valuation may no longer be accurate. Your home’s value is determined by a liquid combination of factors that are unique to your home, your neighborhood and to the broader area in which you live.

 

Knowing what your home is worth will help you price your home to sell and prepare you for the reality of this market. Currently, the best sales strategy is not to hold out for top dollar, but rather, to preserve as much of your equity as possible. More sellers are considering the FSBO sale than ever before, simply to preserve the equity they have. The FSBO selling approach is solid. Independent studies show that homeowners don’t derive enough benefit from using real estate agents to justify the high commission costs that agents charge.

 

FSBO selling isn’t free. You’ll still have closing costs and other expenses associated with the sale of your home. FSBO selling will enable you to set a price for your home that is in tune with today’s market, and conserve your equity by reducing the overall cost of selling your home. When you sell FSBO, you eliminate what is typically the largest expense associated with a home sale: the real estate agent’s commission.

 

The sales price of your home is a major factor in finding a buyer in today’s market. Knowing what your home is worth and what it can sell for listed FSBO or with a real estate agent will help you decide how well you can afford the loss of equity with a traditional real estate listing. If taking a loss isn’t in your budget, consider an FSBO listing first.

Three Circumstances Where FSBO Selling Makes Sense

Selling a home right now is challenging, to put it mildly.  In your neighborhood, you’re likely to have seen a few homeowners waiting patiently for a buyer. You’ve also seen a few homes whose owners will have gone through two, three or even four real estate agents. You’ve also seen some homes start out as FSBO real estate and move to traditional listings, while other traditional listings convert to FSBO homes.

 

If sellers who are using a professional, full-time real estate agent can’t sell the homes they’ve listed, why even consider FSBO? Someday, each of the homes on the market right now in your neighborhood will sell. If you need to preserve the capital in your home, an FSBO sale may be the ideal solution to a number of value-based concerns. 

 

The explanation of why a particular home sits on the market is unique to the homeowner’s situation. For each home it will be different. The sale price of the home is often a big culprit, especially in markets where the home value has actually dropped. Owners sometimes don’t want to accept the fact that their home has lost value. These owners are focused on how much money they will lose when the home sells. If you, as a FSBO seller, are realistic about your price – meaning, that you understand that property values in your neighborhood may have slowed, stopped or reversed, and that is reflected in your price, you’ll sell your home as long as you expose it to the market.

 

Sometimes, the current owner’s equity is small because he or she hasn’t owned the home for very long, and the cost of selling the home will erase what little equity has accumulated. If you’ve owned your home for only a short period of time – less than five years – you will only have a small amount of equity in your home.  The go-go real estate market you bought in is gone. The growth in your equity will have been flat, or perhaps even negative in some markets. That fact alone is precisely why you can’t afford the “luxury” of hiring a real estate agent. Under these conditions, selling your home conventionally is going to take money out of your pocket.

 

Sometimes an owner is trying to cover the cost of repairs and upgrades that are out of line with comparable homes in the market. FSBO sales are ideal for this situation. If your renovations have made your home the most expensive in the neighborhood, you’ll benefit from an FSBO sale. 

 

How? You’re less likely to find a buyer who will appreciate your investment, when they can buy a home with a similar layout (minus the upgrades) in the same neighborhood for less.  If you’re realistic about your pricing and how you position your home as an FSBO property, you can turn this seeming disadvantage into an advantage and still recover much of the cost of your work. In this type of sale, your buyer will receive the value of your upgrades, and by eliminating the commissions on the sale of your home, you’ll salvage much more of your equity.

 

In these situations, FSBO sales should be considered first, and traditional real estate agencies should be looked at as a last resort.

FSBO Sellers: Who Are They?

A FSBO seller is just like any other homeowner, except they have an eye on how much it costs to sell a home. These days, there’s a big disparity between what it actually costs to sell a home and what homes get sold for.

FSBO sellers know that the actual costs of selling a home include listing fees, advertisements and marketing materials, inspections, title searches, and repairs. Missing from the list is real estate commissions. Why? Because FSBO sellers understand that paying a real estate commission on the sale of a home is unnecessary. Today’s FSBO sellers have the same powerful tools available to sell their homes that were once only limited to real estate agents.

FSBO sellers know that successful home sales are a product of pricing, location and exposure. Those are the three elements that combine to sell a home. Price your home properly for its location and get the word out that the home is for sale, and guess what? You’ll sell your home, whether you hire a real estate agent or not.

Make no mistake about it. Real estate agents are worried about FSBO real estate. When homeowners realize that they no longer need to hire a real estate company to sell their homes, agencies become very worried. They start kicking out all kinds of FUD designed to scare sellers into believing they can’t sell their homes. As homeowners see other sellers listing and selling their homes, it becomes harder to accept the real estate agent’s FUD.

Ask a local real estate agent about the sales commission rate in your area. Has it dropped in the last five years? If so, it’s not because real estate agents want to do their part to contribute to the sale of your home. It’s because they understand that the traditional real estate ship is sinking. Sellers just aren’t going to pay high commissions to find a buyer, when there’s nothing magic about that process.

A seller can find a buyer without the help of an agent. FSBO sales offer a real, viable and successful alternative to paying high real estate commissions. If you’re considering a home sale, look carefully at what FSBO real estate has to offer.

Why Your Real Estate Agent Isn’t Talking About FSBO Homes For Sale

Real estate agents love to talk about real estate, until you ask about FSBO real estate. They won’t show FSBO homes. They won’t look at FSBO real estate. They won’t talk to FSBO sellers.  They will come up with a litany of reasons you should avoid FSBO real estate at all costs. From their perspective, the unspoken reason you should avoid FSBO homes, though, is because real estate agents won’t make any money off of FSBO sales. So why should they even waste their time? After all, selling your home is not about you, and not about your home. It’s about keeping agents in business, right?

 Real estate agents want you to believe that selling a home is too hard for the average homeowner. They want you to believe that showing a home to a stranger is dangerous. They want you to believe that an FSBO home is over-priced or under-priced, depending upon whether you’re a buyer or seller. 

The truth is that FSBO real estate sales are quietly becoming more popular nationwide. In some markets, FSBO real estate firms list more homes than the local MLS does. A recent study by Northwestern University exploded some of the myths that real estate agents have been passing along to buyers and sellers for years. Despite the NAR’s best efforts to convince people that realtors get higher asking prices for listed homes, the Northwestern study showed that FSBO sellers got as much or more for their homes than conventional real estate agents did.  

  If a seller can get as much or more by selling himself, who’s leaving money on the table? And if a real estate agent tells a seller than he can get 15 percent more for a home than the seller can get by himself, how does that make the seller feel when the seller turns around to buy a new home? As a buyer, is he now getting ripped off for 15 percent of the home’s sale price?  

In today’s recessionary markets, savvy sellers are unwilling to part with a large portion of their home’s equity. They simply can’t afford expensive real estate commissions. Properly prepared and educated FSBO sellers rightly believe they can do a better job of selling their home than a real estate agent can. The growth of FSBO selling is proving that point. 

As sellers equip themselves with the proper information and tools, successful FSBO sales will become more common. Buyers and sellers are tired of being ripped off and treated badly when it comes to the largest financial transactions of their lives.  The buyer and seller have a much larger stake in the purchase or sale of a home, and it doesn’t make sense to allow a real estate agent to tack on extra premiums for performing a limited amount of work.  

In today’s market, sellers are already looking at options that will help them preserve the value in their homes. Home prices in many markets are dropping, and sellers can ill-afford to give up their home’s equity just to effect a property sale. FSBO real estate offers depressed-market sellers a viable option for preserving their capital.