Updated: a day ago
Selling your home For Sale By Owner (FSBO as it’s referred to in the Real Estate world) makes a lot of sense for homeowners on the surface. It’s an opportunity to save on the commission you’d normally pay a Realtor® to sell your home. It’s the number one reason someone sells their home For Sale By Owner, to save on the commission. By saving on the commission, the data shows you’re losing on the net:
You Net More Money When You Use A Realtor®, Numbers Don’t Lie:
For Sale By Owner (FSBO) Statistics
It’s interesting why the founder of Craigslist, Craig Newmark, openly says he loves his Realtor®, right? Unless of course his Realtor® was netting him more money than he could by himself. Did you know the Founder of ForSaleByOwner.com used a Realtor® to NET MORE MONEY?
Colby Sambrotto, the Founder of ForSaleByOwner.Com, attempted to sell his home For Sale By Owner. At a list price of 2 million dollars, and after 180 days of no success, Colby decided to list it with Realtor®, Jesse Buckler. Jesse sold the home for $150,000 more than the original list price (an increase of 7.5% on the initial listing price).
Let’s connect the dots…. The same person who is making a living from people trying to sell their home by themselves is NETTING MORE MONEY when using a Realtor®.
89% of For Sale By Owner’s will eventually list with a Realtor®
The reason a high percentage of FSBO’s eventually list with a Realtor® is the same reason why a high percentage of Realtors® don’t last long in the business.
It’s not as easy as it looks.
If 89% of For Sale By Owner’s eventually list with a Realtor®, and the average For Sale By Owner sale is $46,000 less than an agent assisted sale, are you still going to spend marketing dollars, time, and effort trying to sell your home yourself? If so, there’s a number of other reasons for you to consider letting a professional Realtor® handle the sale of your home. The 3-4% you’re potentially saving by not hiring a listing agent could be lost when it comes time to negotiate with a buyers agent… or worse, an investor who’s deal hunting.
Over 88% of Buyers are using a Realtor®.
9 out of every 10 ready, willing and able buyers, are working with a Realtor. In this case, you’re going to have to pay a buyers agent’s commission or you're missing out on a large pool of buyers..
That commission you’re going to pay, is to someone who is going to use their experience to negotiate AGAINST you. They will use their experience to negotiate another 3-5% off your list price. If you don’t give in to their negotiations the Realtor® may take their clients elsewhere.
When working with a listing agent, they are a professional in negotiations and will work to defend your sales price and preferred terms. So are you really saving on the commission?
One day before closing and all of a sudden the home has a long list of problems?
This is a nightmare.
Almost every day I talk with For Sale By Owner’s and the one’s I speak with are often frustrated because their home was ‘under contract.’ When you sell For Sale By Owner and your home is ‘under contract’ what does that really mean?
Often times an investor may wait til the last day before he tells you EVERYTHING he found wrong with your home and why the initial offer is no longer good. They now want an additional $25,000 off their initial offer because of the ‘problems.’ You politely say ‘NO WAY’ and you’re left feeling frustrated. You also have no idea that the ‘under contract’ was never ‘in contract’ it was actually an experienced investor looking for a deal.
Have you heard of the companies that buy houses fast, for cash, no matter the condition? They tend to PREY on For Sale By Owner’s and can’t wait to get to the closing table because that’s when your home is either for sale or it isn’t… it was never actually ‘under contract.’
Let’s say it wasn’t an investor shopping for a deal, and there are a long list of problems… who has all the resources and experience to handle problems like these in such a short period of time? A Realtor® will facilitate quick identification of issues and their resolution to 'save' the deal.
Other Dangers when you sell For Sale By Owner:
The dangers of selling your home For Sale By Owner go far beyond losing equity, they place homeowners at risk of unaccompanied strangers, thieves, and potentially worse. You are giving access to your home, to just anyone.
Often times Real Estate transactions end up in legal battles, costing you attorney fees that you wouldn’t have paid had you worked with a licensed professional. It’s not because the 11 percent of FSBOs who actually make it to the closing table aren’t intelligent people... they just haven’t been through all the experiences a professional Realtor® has.
Realtors® can foresee issues before they occur which in return prevents any legal troubles, home inspection problems, negotiating table concerns, as well as strategies that will ultimately give you the best chance of closing for a higher net.
Realtors® Know Other Realtors®
The other day a Realtor® friend of mine listed a former FSBO (For Sale By Owner), and the home was sold BEFORE it hit the MLS. Now everyone thinks “Wow, if it’s that easy, how come the For Sale By Owner didn’t execute the deal himself?”
It makes sense right? How easy that Realtor® made the sale look, is naturally going to make people think he didn’t earn the commission.
My friend simply reached out to another Realtor® who’s niche market was in that specific type of property, and invited him and his client to take a look. A simple relationship that had been built on networking with other Realtors® caused the home to sell. Often times a Realtor® will post their listing on social media, and because of their network of Realtors® it reaches the ‘right’ audience who in turn shares that information with the buyers they are working with.
So how did a Realtor® close the deal so quickly when the For Sale By Owner had already invested marketing dollars into the home?
Knowing the specific type of buyer, as well as the Realtors® who work with those specific type of buyers played a crucial role in the execution of this real estate sale. Asking a Buyer’s agent, who’s already working with specific types of Buyers, to come and take a look at the property is something that comes with experience, network, and relationships within the Real Estate community.
REALTORS® Transact in Real Estate Deals, Networks, and Relationships, Every Day
When you do something every day you become a master of the things you do. Realtors® become masters of Real Estate marketing, sales, transactions, terms and conditions, and other things that don’t hold a tangible dollar value, though they play a crucial role in the sale.
What do you do for work? Do you think a Realtor® could do it as well as you do?
My Uncle is a heart surgeon and I wouldn’t ever try to give myself heart surgery, so why not trust the professionals to protect your equity, the same way a doctor protects your health?
A great Realtor® should work diligently to maximize their sellers return on their real estate investment.
Sales Strategies and Reverse Prospecting in Real Estate
Without giving away all of my selling techniques in one post, here is the best one that no FSBO can use. It’s called Reverse Prospecting.
Reverse prospecting is the act of prospecting buyers agents within the MLS who are working with ready, willing and able buyers, that are searching for a property with your criteria. This is a strategy that is not available to anyone except a listing agent. They identify who is shopping for their listing and can reach out to them to connect.
Knowing the specific type of buyer, as well as the Realtors® who work with those specific type of buyers play a crucial role in the execution of many real estate sale.
Asking a Buyer’s agent, who’s already working with specific types of Buyers, to come and take a look at the property before it hit the MLS is something that comes with experience, network, and relationships within the Real Estate community.
Marketing Homes For Sale
Who knows better how to market a home for sale than someone who's been doing it almost every day, and is constantly surrounded by the best marketing approaches in the industry?
One of the biggest mistakes sellers make, especially for sale by owners is taking photos with the camera on their phone. That type of photography doesn't sell homes, this type of photography does.
The first thing I tell my clients to do is to google their address. After listing with me, I ask them about a week later to google their address again. At this point, the first page of Google is loaded with great marketing content for their address. Video presentations, contextual posts, pictures, and information that any home buyer wants to see
A great Realtor® is going to proactively prospect buyers for you by leveraging the Realtor® network through reverse prospecting as well as use every marketing and sales technique they have developed over their careers. They will be with you every step of the way fighting to protect your equity.
The Right Mindset in a Real Estate Transaction
Selling your home is about having the right mindset. It’s about being confident in your numbers, your marketing, your follow-up, and confident that you have dotted every i and crossed every t before you reach the closing table.
A Real Estate transaction is not rocket science, it’s a roller coaster ride, with tons of moving parts as well as uphill and downhill battles. If you aren’t careful, the roller coaster will take you for a ride you didn’t sign up for
Those are 10 Reasons why Selling your Home With a Realtor® Will Net You More Money:
We are in this business to help people in Real Estate Transactions here in the St. Louis area. If you want to sell For Sale By Owner just Click the Chat feature and Sarah will send you some of the forms you will need. All we ask is that if you are in the market for a Realtor® you give me the opportunity to interview for the job, whether it's buying or selling real estate.
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