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.

Consider What You as a Fsbo seller Could Do With Your Equity

How much commission will you a Fsbo seller pay on the sale of your home? Three percent? Five percent?  Seven percent?  Say that you purchase your home for 100,000 and in five years, the value of your home has increased by $50,000. Your equity in the home is $50,000.  If your $150,000 home lists with a five percent commission, you’ll pay $7,500 to an agent to sell your home.

Home owners who do not choose the Fsbo way just given away 15 percent of their home equity. What could you have done with that extra $7,500?  You could have used it to make a bigger down payment on your new home. That $7,500 could have meant the difference between having and not having PMI. It might have meant that you could have afforded a nicer home in a better neighborhood. Maybe you could have made repairs or improvement to your new home. You could have used it to take a nice vacation, or pay bills, or buy a car. You could have saved it for retirement. But you gave it to a real estate agent for doing what you could have done yourself.  Is that what you really wanted to do with your $7,500? 

Before you decide to list your home with a real estate agent, do some research. Visit a Fsbo marketing website and look at the resources they provide to help you sell your home. Most can help you price your home properly for its location and expose it to the buying public.

A  true Fsbo website has no interest in taking away your equity.  A quality Fsbo website will not plan to refer you to real estate agencies, and wants you to succeed. You can sell your own home and save thousands in the process. You can sell your own home. It is worth your time to educate yourself on the options available.