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.

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.