Now, now . . .relax. The title is a perverted ploy to engage your “Access Hollywood” vortex. You know the part of your brain that various media outlets regularly attempt to intoxicate with persistent negativity and violence? What would we do if we weren’t Pitt-ed or Spear-ed on a daily basis? After all, sex, rehab, “accidental” crotch shots, and, as is for this article, insult is what triggers our attention and exploits our twisted minds. Right?
Digressions . . .
So, if you are one of the for sale by OWNERS (FSBO) out there, un-pucker your lower cheek region and listen up. It is time to make an informed decision. Seriously!!
My mission statement is “Work Everyday to Positively Improve and Impact the Lives of Others.” Therefore, this blog is dedicated to serving the average laypeople, the Joe’s and Jane’s, if you will, of a very dynamic market place; the real estate market. I have set out on a researching journey, a fact finding mission, to present to those who are or are considering selling your home without the services of a real estate professional; a Realtor®. It is my goal to offer very little commentary and present as much fact as possible, so that you, the reader, will have solid information to make an informed decision.
Reason Why Homeowners Chose to Sell on Their Own
Stat - According to the National Association of Realtors’ 2007 Profile of Home Buyers and Sellers, 70% of homeowners who did not know their buyer (not sold to a friend or family member) said the reason they are selling their home on their own is they did not want to pay a commission or fee. Understandable? Absolutely!! If I am selling a $300,000 home and am paying a 6% commission (oh by the way, real estate commissions are 100% negotiable) I am paying a real estate company $18,000. How that is divided and who takes home what amounts is for a different article but, nevertheless, it is a good chunk of change off of your bottom line. So what is the catch? Why doesn’t everybody do it?
The notion that you save money by not hiring a real estate agent is a myth and is upheld year after year by consistent and solid statistics. In 2007 only 12% of home sellers went it alone. There has to be a good reason that number is so low. Now . . . all of the data I found are based on averages. So that means, that some sellers did better and some did worse.
Stat - Historically, FSBO’s sell homes 12-20% less than real estate agents. In 2004, for instance, the average FSBO sales price was 15.4% less than the average Realtor® sales price. In 2007, according to the National Association of Realtors, FSBO’s (did not know the buyer) sold at an average price of $207,900 and Realtors®, from the same survey, sold at $240,000. That means that FSBO’s in 2006-2007 sold their homes 13% lower than those sold by a professional. So, if you hire a professional, pay the 6% commission, not lose the 13% doing it on your own, then your net gain is 7%, right?
There are a number of reasons this happens. Buyers who buy from FSBO’s seek them out to negotiate a better deal. Savvy buyers, investors in particular, know that you are saving on the commission and will exploit that for their own gain. Go to any bookstore and open a “How To” real estate investment book and you would find, in the first few chapters or so, a section on and the benefits regarding buying investment properties from FSBO’s. Also, FSBO’s tended to sell lower cost and damaged homes. Another reason is that FSBO’s are more prevalent in rural areas where home prices are lower. The main reason, though, is marketing.
How FSBO’s Market Real Estate
Golden rule of real estate marketing – The more people who know your home is available for sale, the better chance you have of selling your home quickly, with competing contracts, at top dollar.With the internet becoming a mainstream tool for buyers of real estate, web advertising is the way to go. Stat - Over 80% of buyers start their searches on the internet. Then at least 80% of your marketing budget should be web ads. Many sites like, Multiple Listing Service and realtor.com (#1 search site), are only available for real estate professionals. According to FSBO’s in 2007, internet ads were the 5th most used type of marketing (behind yard signs, newspaper ads, open houses, and people known to them) The days of putting a sign in your yard, an ad in the paper, and holding an open house are over. It’s just not that easy. Stat – Less than 2% of homes were sold in 2006 due to a combination of a sign in the yard and an open house. Around 6% of homes were sold due to a newspaper ad. Many FSBO’s spend hundreds, even thousands of dollars on these marketing pieces to no avail. There are some FSBO assistance sites out there, but, unfortunately, they don’t get you to the most visited home search sites on the web.
The bottom line is real estate professionals who evaluate and understand the market place, know and understand how to market homes that reach a higher volume of viewers. More viewers = a better chance to sell faster and for top dollar.
Most Difficult Task for FSBO Sellers
So, the saving money myth isn’t the only problem. The most difficult task, as reported by FSBO’s, is understanding and performing the paperwork. I would say that the average contract, with all of the contingencies, disclosures, addenda, loan documents and inspections, totals 80-100 pages. Additionally, federal, state and local governments have instituted several mandatory disclosures and addenda. In other words, it is required by law that sellers disclose certain pieces of information at specific times to potential buyers. Failing to do so could open you to governmental fines, lawsuits, or, in some cases, jail. A knowledgeable Realtor® understands all of these mandatory items and will help keep you out of trouble and on the right path.
Other Reasons
I could go on and on about various parts of the home selling process and how valuable a Realtor® can be, but you don’t want to read a novel and I’m getting sleepy. So here is a list of some other duties that a Realtor® does for you: