At some point during the decision to sell your home, there will be the thought to maybe sell your house on your own as a For Sale By Owner or FSBO. This is where a home seller bypasses a real estate agent and tries to sell their house without the experience and representation of a real estate agent.
So, is it possible to sell your house on your own? The answer is yes it is possible to sell your house as a for sale by owner.
The #1 reason a home seller decides to sell their home on their own, is to save money on the real estate commission. Common sense dictates this may end up netting you more money, but it certainly can be more complicated than that. Paying less in real estate commission does not always translate into the seller netting more money. It can be deceiving
A For Sale by Owner has many tasks to perform. Starting with preparing your home properly…… pricing the home to sell…. managing the paperwork and keeping it legal.
As a FSBO, there will certainly be many hurdles to overcome to get your house sold, that are just a regular part of a real estate agents day. But in my eyes the largest hurdle a for sale by owner to sell their home is that of…. exposure.
The FSBO starts the home selling process with a distinct disadvantage of being able to expose their home to the largest pool of buyers. It goes with out saying the more showings you get the more chance you have of receiving an offer.
What most for sale by owners use to market their homes? The street sign, word of mouth, newspaper ads and Craigslist have traditionally been the marketing avenues of many for sale by owners.
Let’s touch briefly on how home buyers find homes. It really all starts with the internet for today’s home buyers. So where do home buyers look on the internet?
Homebuyers search for homes for sale on an agent’s website connected to the Massachusetts Multiple Listing Service or a national aggregate like Zillow or REALTOR.com. Approximately 90-95% of the homes that are publicly for sale will make it to these sites.
So where would a home buyer go? They would go where they can find the greatest amount of homes for sale quickly. Not Craigslist, not newspaper ads, etc…
Today’s home buyer is making the decision whether to see a home or not based on the real estate photography and description on the internet. How will a home buyer find your home?
Solution: List your home as a FSBO on Zillow. It will get some additional exposure.
The Massachusetts Multiple Listing service has over 20,000 member agents that cover the majority of Massachusetts. As of today there are currently 32,178 homes on the market. That is a huge pool of inventory.
A regions MLS is a database of homes that most real estate agents use to aid their home buyers in finding the perfect home. It is one stop, uniform across the board and like I said, the majority of homes that are publicly marketed are in this database.
As a For Sale By Owner, you are at a serious disadvantage by not being in the multiple listing service. Your local MLS will expose your home to almost 100% of the buyers who would consider your home as an option.
The MLS is one of the best tools for a listing agent to expose your home to local real estate agents and buyers.
Solution: Consider using an entry-only listing service. An entry only service is a limited service for $300 to $500 allowing a FSBO to be listed in the MLS by a member agent. You will also have to offer compensation to an agent showing your home, but you would still be saving money on the real estate commission.
Many home buyers want to use the services of a buyer’s agent when buying a home. Your goal might be to save money on the real estate commission. But a listing agent usually agrees to split the listing commission with the buyer’s agent or facilitator to get a house sold.
Maybe you are willing to pay a buyers agent, maybe you are not, but going the For Sale By Owner route makes it very complicated for a home buyer to use the services of a buyers agent and might deter them from viewing your home.
Solution: Offer compensation to a buyer’s agent that is working with a buyer that wants to buy your home.
Over the years I have been brought in on FSBO deals gone bad to clean up a mess created by the buyer and seller. I can tell you there is usually a “type” of buyer seeking out a For Sale By Owner. They fall into a couple of categories:
Solution: Open up to the real estate community with listing in the MLS as an entry only. Offer compensation to an agent that brings a buyer. This will open up your home to a much larger buying pool of buyers that are ready willing and able to pay full market value. While offering compensation to a buyer’s agent eats into your net, you are still saving on the overall real estate commission.
So as an agent that has also sold many FSBO properties either directly or thru the MLS, you need to show your property at normal hours and try to be accomodating of other’s schedules!
I called a FSBO in the MLS one Thursday afternoon for an 11 am showing on a Saturday.
First I had to leave a message. They called me back over 24 hours later and said they were too busy to show over the weekend but I could stop by with my buyers at 10:30 that night??!! This is a common problem with FSBO, they fail to recognize you need to try and accommodate buyer’s schedules.
When you get a potential buyer, try to accommodate their schedule as best as you can. For many homes listed with a real estate agent, I can schedule a showing within a few hours and gain access to the home thru a lockbox. It is simple, it is easy and almost instantaneous.
Trust me. If a buyer makes a couple of attempts to see your home and it is never convenient…. they lose interest and are gone!
Solution: Try to accommodate a buyer’s schedule as best as you can. You have to show it to sell it. Buyers want scheduling to work around their schedule, be easy and convenient.
Obviously, the first course of action is getting up a sign that says FSBO with your phone number. That great, especially if you are on a busy street.
But where is this lacking? As a real estate agent that services Tewksbury MA and many of the surrounding communities, I can give you an overview of where the buyers come from. Most often buyers are coming from somewhere south/southeast.
Between my service area and Boston. How will someone know about your home for sale in say Tewksbury if they live in Malden or Arlington and they never have a need to drive by your house?
Solution: Find creative ways to expose your home to a larger segment of the buying population utilizing the internet. Targeted Facebook Ads by a certain area are relatively inexpensive and could reach your potential buyer. Have a landing page with photos and information on your home for potential buyers to see.
Whether you are a real estate agent listing a home or a For Sale by Owner, the key to getting the most amount of money for a home is exposure! Exposure to the largest potential buyers for your home.
You need to be where the home buyers are, which is the internet.
Your top listing agents have a marketing plan in place and spend thousands of dollars every month on marketing the homes in their inventory, primarily thru the internet and other means. As a FSBO you need to try and compete for that large pool of home buyers that don’t even know your home exists for sale.
Listing agents spend money on marketing, so should you.
Finding the right person to fall in love with your home is what it is all about. It is a bit of a numbers game. If you decide to try selling your home on your own, put a plan in place of how your home is marketed to the most amount of prospective home buyers.
So yes, you may save on a real estate commission when you sell your home on your own but you will earn every penny you save. And, to receive absolute top dollar for your home it often requires a very well-crafted plan from A to Z and even require you to spend 100’s if not $1000’s of dollars to bring in that buyer.
Other For Sale By Owner Resources:
What is the Largest Hurdle for a FSBO (for sale by owner) to Sell Their Home? is provided by Kevin Vitali of EXIT Group One Real Estate of Tewksbury MA. If you would like to sell your home give me a call at 978-360-0422 and let’s get the process started.
Real Estate Services in the following areas: Northeast Massachusetts, Merrimack Valley, North Shore and Metrowest. Including the following communities and the surrounding area- Amesbury, Andover, Billerica, Burlington, Chelmsford, Dracut, Groveland, Haverhill, Lowell, Melrose, Merrimac, Methuen, Middleton, North Andover, North Reading, Reading, Stoneham, Tewksbury, Tyngsborough, Wakefield, Wilmington, Westford