It was thought that the internet would help many more people sell their home on their own. But, just the opposite has happen. Research conducted by The National Association of Realtor’s found that For Sale By Owners (FSBOs) was 10% in 2011. That is down from 14% in 2003 and 2004.
Half of all FSBO sales are transfers or other situations where the sellers were familiar with the buyers. FSBOs were only 6% of all sales in 2011 when the seller and buyer did not know each other.
There are key reasons that sellers turn to a Realtor to help sell their homes. Here are some:
- Price the home right for the market
Unless you have access to homes that are similar in the area that have sold in the last 3 to 6 months, it will be tough to price your home to the market. The home may need to sell at a certain price to pay off the mortgage and provide a profit. But, that isn’t necessarily the way the price is set. If your home is overpriced, it will set on the market for ever. If it is under priced, it will sell quickly, but not provide as much profit as could have been earned.
- The decline of print advertising as a major lead generator
In the past, newspaper ads would produce a fair number of calls on FSBOs. Today, a three-line ad in the local newspaper has little chance of competing with the wide array of information online, including video, color photos, 360-degree virtual tours, and a wealth of community and lifestyle data.
- Buyers seek rich content
Individual real estate companies, Realtor.com, and other national on line real estate websites provide the ability to reach all homes that are listed, no matter what agency listed the property. Buyers find it more efficient to search these sites then to look for single homes for sale.
- Instant gratification
Buyers will only view a home for 15-30 seconds on line. If an owner doesn’t have a way of capturing the buyers contact information, they will lose them. Then, if the buyer does contact the seller, if the seller doesn’t get back with them immediately, the buyer will move one. Realtors know this well and make themselves available for any contact that comes forward. Most people selling a home on their own have other things to do, like their job.
- Buyers want the savings
When buyers do seek out FSBOs, they do it because they are expecting them to sell for less than market value. Buyers even take 6-10% off the asking price at first approach. In the end, homes sell for up to 20 percent off market.
- The needle-in-the-haystack effect
Try searching for FSBOs on line and up will come real estate companies and individual Realtors. To provide their clients with the best opportunity to sell homes at top dollar, these companies spend millions in designing their websites and managing their online presence. When buyers search, their sites are on top.
Sellers can also post on the national real estate websites and for sale by owner sites. But, again, it is the same issue as above. Unless you are available from 7 in the morning till 8 or 9 at night, you will miss opportunities.
Then there is Craig’s list. The ad needs to be posted regularly to stay on top. Since Craig’s only allows the same ad to be post every three days, for two of the three days the home is not on top. A Realtor will make sure the posting stays on top. Additionally, many people are very aware of the scams on Craig’s and have trust issues when contacting a private seller.
- Potential buyers are reluctant to share information
When a potential buyer approaches a Realtor to get help finding a home, the Realtor needs a lot of information to help them find the home of their dreams. This includes plenty of financial information to help qualify them for the home the buyer is looking for. People will be reluctant to share this information with a stranger that is not licensed or insured.
- Availability for showings
As above, being available 24/7 to meet with buyers is a problem. Even if a lock box is on the door to let people in, can they be trusted. Are they really a buyer or someone that just wants in the home? When an agent lets people in your home, the agent is there with them.
- Understanding the Sales Process
Realtors are familiar with the process of selling a home. They are accustom to working with purchase agreements, counter offers, negotiations, home inspections, title companies and closings. Beside all the legal issues, there are agency policies, state and federal laws as well as issues that arise out of individual situations to satisfy. If you work with a Realtor, you may want to consult a lawyer for many of the issues, but when you don’t have a Realtor, you will absolutely need a lawyer. It will insure that something isn’t going to come up before the closing, during the closing or in some cases, a year or two later that will wreck havoc on the finances of the seller.
- Inspection
After the home is “sold” there are contingencies. One is the inspection the buyer may require before providing a final approval. There isn't a home that is perfect and the inspection will highlight all the imperfections in the home. The buyer will return with a list of things that need to be fixed or will request money off of the sale price to proceed. Realtors know about inspections and what may warrant repair or a price reduction. Also, depending on a number of other factors, it may be best to pass on the sale and keep the house on the market.
- Appraisal
The home may sell for the price asked and be the best price on the market. But, unless the lender for the buyer thinks that it is worth what it sold for, it will be tough getting an approval on the mortgage. Realtors will make sure the house is priced right from the beginning, that the buyer is qualified and have the knowledge combined with experience to help, in many cases, get around the approval process.
In the end, a working with a Realtor is well worth the commission.
