FSBO vs. the World

FSBO buyersAs a For Sale By Owner (FSBO) you are taking on the World market…

Would you like the world to find your property through wholesale markets? or through the retail market?
Retail markets get the premium buyers where you have the best chance of getting a premium price. The wholesale market, as an FSBO, will most likely land you 1 of the 5 most common buyer types listed below:

  1. First-time Home Buyers. Most First-time buyers are intimidated by people selling their own homes, because they feel those sellers have far more experience than they do. To the first-timer, purchasing a home is a bit overwhelming. Their Aunt Holly says the real estate market is going to sink again within a year, Uncle Dennis advises to keep their money in the bank in case of job loss.  Without the help of a third party to guide them through all the unfamiliar decisions involved in buying a property, they rarely make a purchase until they find a real estate expert they trust and enjoy working with. They’re afraid of FSBOs because they are not confident they are getting a fair shake.(First time Home buyers accounted for 37%  of buyers in 2011)
  2. Local House Changers. These are local people who can take their time looking for their next home, because they already own a house in the area. They’re only interested in the bargain of the decade. They know that a For-Sale-By-Owner (FSBO) isn’t paying a brokerage fee, so they automatically deduct the fee off the top when they look at the price you’ve put on your house. Their aim is to find a seller in trouble or someone who has underpriced their home through ignorance of its true market value. House Changers lowball FSBO’s; and there is no way they will let the seller make a good profit. House changers are set on saving the brokerage fee for themselves, that’s why they are not with a REALTOR either. Serious House Changers mostly work with a REALTOR®.
  3. An Investor. FSBOs attract the whole sale market, while MLS listed homes are have a more retail front. Investors love FSBO’s and most only concentrate on hunting properties with FSBOs that are under pressure to move fast or have financial problems. FSBO’s will often end up on the wrong side of a contract with an experienced investor who will almost always have a more advanced knowledge of value than an FSBO does. Investors only buy bargains. Most Investors concentrate on a niche in which they profit from transactions with FSBOs. Most Investors do not hold Real Estate License because of gray areas in ethics and fiduciary obligations, which are attached with licensing. “I’m an ethical REALTOR®. I have been protecting clients from hot air Investors for years.”
  4. Out-of-State Buyers. These are people on the move and not familiar with the area. They may need to access properties and write a purchase offer the weekend they have flown in to search. Whether they are moving here independently or using a relocation real estate company; their house hunting time is limited, and they’re balancing culture shock and a much bigger to-do list. They don’t know the true home values and where to find the communities they want to live in.  Out of State buyers are under time pressures to make efficient actions, informed decisions and all their questions answered reliably — Out of State Buyers nearly always work with the free services of a local REALTOR® to oversee their interests (access, negotiate, inspections, paperwork, due diligence items, etc.) when they are in town, and out of town. Out of State buyers use REALTORS® to find their real estate.
  5. Dreamers & the Unqualified. Dreamers run around viewing properties as a hobby, wasting an FSBO’s energy. I can assure you our REALTORS® don’t run around with unqualified buyers or dreamers. Stats show the majority of serious, qualified buyers do not run around without representation. It’s apparent in the real estate industry that REALTORS® offer you the best marketing numbers, the best buyers, and the best marketing efforts to reach the high paying buyers.

For Sale By Owner (FSBO) Statistics

  • FSBOs accounted for 9% of home sales in 2013. The typical FSBO home sold for $184,000 compared to $230,000 for agent-assisted home sales.
  • FSBO methods used to market home:
    • Yard sign: 36%
    • Friends, relatives, or neighbors: 28%
    • Online classified advertisements: 16%
    • Open house: 14%
    • For-sale-by-owner websites: 13%
    • Social networking websites (e.g. Facebook, Twitter, etc.): 7%
    • Multiple Listing Service (MLS) website: 7%
    • Print newspaper advertisement: 7%
    • Direct mail (flyers, postcards, etc.): 1%
    • Video: 1%
    • Other: 2%
    • None: Did not actively market home: 32%
  • Most difficult tasks for FSBO sellers:
    • Understanding and performing paperwork: 18%
    • Getting the right price: 13%
    • Preparing/fixing up home for sale: 12%
    • Helping buyer obtain financing: 3%
    • Attracting potential buyers: 3%
    • Selling within the planned length of time: 7%
    • Having enough time to devote to all aspects of the sale: 6%
  • The share of home sellers who sold their home without the assistance of a real estate agent was nine percent. Forty percent knew the buyer prior to home purchase.
  • The primary reason that sellers choose to sell their home without the assistance of a real estate agent to a buyer they did not know was that they did not want to pay a fee or commission (46 percent).
  • Approximately one-third of FSBO sellers took no action to market their home, and 64 percent did not offer any incentives to attract buyers.
  • The typical FSBO home sold for $184,000 compared to $230,000 among agent-assisted home sales.

The FSBO M​arket

Stay out of the convoluted FSBO-land,
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