Listing Your Home Versus for Sale by Owner

Everyone is entitled to selling their home on their own. That's the beauty of this great nation we live in. On the surface of it, selling your home For Sale By Owner or FSBO (pronounced Fiz-bo) as the real estate agents like to say, seems like an attractive idea. After all, by saving the 5-6% worth of commissions that is typically paid out to a listing company you'll certainly increase the bottom dollar figure. Not to mention you know your house better than anyone so it's easy to show your home and sell prospective buyers on it. Though it seems like the more attractive thing to do, it doesn't always mean it's the smart thing to do.

Commissions.
For Sale By Owners are typically ego driven individuals that think they are the best at everything they do and must be in control at every point. There is no exception here. The number one reason why homeowners decide to sell FSBO instead of listing their property is to save on commissions. Most, however, decide to pay 3% in the event that a buyers agent sells the home to a prospective buyer. For example, if an agent with a buyer sells a For Sale By Owner at a price of $200,000, then the homeowner only has to fork out $6000 in commissions as opposed to the $12,000 if they were to list. They were smart to save $6000, right? Well, not so much. In my local real estate market here it takes on FSBOs on average eight more months to sell than properties that are listed with a real estate company. So if your monthly mortgage payment is $1500 and you're paying an additional eight months then you're forking out $12,000 worth of payments. When your property finally sells you've paid out $18,000. (3% commission + 8 mortgage payments at a cost of $1500 per month.) If you listed your property then you would've paid out $12,000, so you've actually lost money making the decision to go For Sale By Owner. Those are the cold, hard numbers and it's a reality that most uninformed homeowners don't want to face.

Use common sense.
If you're a homeowner looking to sell in the near future, then take this advice: Real estate agents are better at selling homes than you are. They do it for a living. If they don't sell homes they don't put food on their table so do you think they have the motivation to work hard? I think so. For some reason, I have talked with so many homeowners in the past that have said they could do just as adequate of a job at selling their home as I could. In fact, the profession of real estate agents is one that is unlike any other. It's the one profession that is not needed, and homeowners are free to not use our services. However, our profession has survived hundreds of years and there is still a high demand to use real estate agents. Why is that? Because we are the ones responsible for the appreciation on your home, the money you put in your pocket, and for getting the thing sold. Let's use a sports example. If you were to bet money on a baseball player that practices every single day and specializes in the sport or someone that has never really played but wants to bat this one time, who would you think is more likely to hit the homerun? Ding Ding Ding. You got it.

Advertise. Advertise. Advertise.
Let me start off with a story here. Last year, when the real estate market in Wilmington, NC was booming, I got the paperwork signed to enter a condo as a listing. Before I turned it in, I decided to send out a mass e-mail to over 200 agents in my company and let them know I was about to enter a condo on the market. In ten minutes I received three phone calls, and one of those agents actually submitted a full price offer within two hours. Needless to say, the sellers I represented were happy. So how did that happen? Every agent is working with, on average, five prospective buyers at any time. By sending a mass e-mail to all agents, I was automatically opening the door to 1000 prospective clients. Real estate agents have the kind of reach. There are over 2000 agents in my local real estate board, and by putting it in the computer system for everyone to see I've opened the door to 10,000 prospective clients. I advertise in local showcase magazines. I send out postcards with featured property listings. I even cold call neighborhoods that surround my listing just to let them know about the house in case they have friends or family that want to move into the area. I have an aggressive Internet campaign. I've registered with several search engines including Yahoo.com and MSN.com. Realistically, a For Sale By Owner could never have this much power in selling their home and they could never expect for their tiny directional signs or ad in the local newspaper to do the trick.

Relocation
This is one you're probably not expecting. In areas where there is a high demand to live there, most people relocating with jobs or families start their search on the Internet. Realistically, they are more likely to go to a Century 21 or Coldwell Banker site to start their search. ForSaleByOwner.com is mostly searched by real estate agents looking for listing appointment leads.

Protection
I can't stress this enough. Protection is a tremendous reason to list with a real estate agency, and for a variety of different ways. Real estate agents require pre-approval letters from mortgage brokers by all buyers before they submit an offer. When your home is being shown by a different agent, the lockbox system keeps a database with every individual that has been in your house. No more worrying about meeting a stranger in the middle of the night to show your house when you're all alone. Real estate agencies are a great way of making sure all practices are perfectly legal and ethical, whether it's holding all deposited earnest monies or making sure a buyer lives up to the contract they signed. Selling your home is one of the biggest investments you'll ever make, so be sure to have someone handle it that knows the process well.

Get rid of the emotion.
By having a third party involved, it allows the person that is not emotionally attached to the dwelling to conduct business on your behalf. We are licensed, and trained negotiators that make a living getting deals worked out and on paper. It takes the element of stress right out of the process and allows you to go on with your life without getting bogged down by handling phone calls, setting up appointments, or worrying about advertising the property. We do all of that for you.

Those are just a few reasons for you to consider listing your property versus going For Sale By Owner. Good luck with the home selling and remember…be smart!