The Before you FSBO You Should Know Entry

Considering that many FSBO sellers eventually list their property with a Realtor, lets take a quick look at the reasons they picked the FSBO route in the first place and why they're often converted to a Real Estate brokered listing in the long run.

Top reasons home owner's choose the FSBO path

• Selling a house seems easy
• Keep a larger share of the proceeds
• Not willing to "give" money towards real estate commissions
• Belief that agents don't add value
• Friend tells you how easy it is to sell on your own
• They have a unique property/unique location, which the seller believes will bring in the buyer

Top 6 tools the FSBO seller will use to expose their property

• Local advertising: Beach Reporter, Daily Breeze, LA Times
• Online advertising: Craigslist
• Open Houses
• 2.5% commission offered to Buyer's Agents
• FSBO signs around the neighborhood
• Word of mouth

The 5 top things that will drive you crazy as a FSBO seller

• Unqualified buyers trying to work a "deal" with you
• Onslaught of real estate agents, lenders, pest control companies, etc., trying to get your business
• Open houses bring your neighbors and "professional open house trowelers," but no buyers
• Advertising brings 100's of calls from real estate agents
• Qualified buyers approach you with offers well below market value, they expect a great price because they know you're not paying real estate commissions

The 5 top reasons sellers convert their FSBO property to a traditional listing

• No offers while a FSBO
• Had an offer that fell apart (25% of all deals fall apart; FSBO deals are 50% more likely to fall apart.)
• Tired of being focused on selling real estate and not on other aspects of life (job, relationships, etc.)
• To emotionally charged and attached to property to smartly negotiate with buyers
• want the property sold, this is the bottom line!

The 5 top things you'll hear from agents who want you to list with them

• I have a buyer, can I come over to preview the property (means: I don't have a buyer, but I want to get in front of you and pitch my services)
• I'll list your house for 3% (means: the agent is desperate or, they'll come back to you after it's listed with strategy of raising the buyer's agent commission to 2.5%, which is what it should have been to start with.)
• I'm a top producing agent (means: ask the agent to define. Many of the agents who are calling you have no deals under their belt.)
• I'll do whatever it takes to get your listing (means: see item 2)
• Can I/we come over and meet with you for 5 minutes to see your home (means: I don't have a buyer, but would still like to meet you, see your home, discuss my/our services and determine if you're cooperating with brokers.

The 5 top questions you should ask perspective agents

• Do you have any listing? where are they
• How many deals do you do per year?
• Have you ever worked with a FSBO seller? Were you able to sell their homes?
• How will you market my property (see next section)
• Why should I hire you to sell my home?

The top tools a Realtor will us to sell your home

• Property listing on the MLS (South Bay and Los Angeles)
  
• Direct marketing (phone calls, emails, post cards, mail campaigns, door knocking, etc..)
• Branded "For Sale" sign brings buyers.
• Open Houses, brokerage caravan, broker's opens, individual showings
• Staging and home preparation expertise
• Marketing to Brokers, past clients, agent's farm and their sphere of influence
• Internet marketing (Broker's website, Realtor.com, Agents website, Craigslist, Google ads, Podcasts, Videocast, Blogs, etc.)
• Professionally created property flyer, color, offset print
• Experience equals a home sold

The Top reasons you should list your home with an experienced Realtor

• Local, neighborhood and area knowledge
• Ability to interpret and understand market trends, prices and comps.
• Expertise and experience completing the forms needed to sell a home (will help keep you out of court down the road, should a problem arise.)
• Sales and marketing expertise
• Access to buyers who are relocating from out of the area
• Complete understanding of the disclosure process
• Expertise in negotiations will get more money in your pocket
• Network of professional resources including lawyers, painters, lenders, etc.
   

A few more points to consider

• Only 4% of For Sale By Owners sell themselves and the other 96% of homes are sold by real estate professionals.
• Only 1% of buyers end up buying a property through a traditional open house.
• Only 3% of buyers purchase homes advertised through classified ads.
• The FSBO’s chance of being civilly sued is 3 to 4 times higher than a broker represented/MLS listed home because they may not have the skills or knowledge to make sure that the deal is completed to the letter of the law.
• The odds of a FSBO deal falling apart is 50% higher than broker represented deals.
• Buyers that buy a FSBO property are looking for a deal and expect to pay less than the market value because they know that the seller is not paying commissions. FSBO sellers are trying to maximise their profits and typically price their homes above market value.
• Choose to work with an aggressive Realtor team who will help you keep your cost down–we know how to negotiate for a property’s best price.
• 2007 and beyond will be a buyers market, which means you’ll need the best tools to negotiate with sellers who haven’t come to terms with the “new” real estate market. Sellers will continue to overprice their homes and wonder why they have not been able to attract qualified buyers.