5 Reasons Why FSBO is the Way to Go
Property owners are increasingly going the way of FSBO to sell their homes. FSBO or For Sale By Owner is the process of selling property without the need of a real estate agent. For years, home owners thought you had to go through a real estate agent to sell your property.
They had the experience and the expertise to make the process more convenient. Most of all, real estate agents have a network of qualified buyers. As a guideline, if your property hasn’t been sold within 4 months, its perceived value will decline in the market.
But all of these advantages come at a price. Real estate agents will charge you a commission fee for their services. The commission fee will vary from 2% to 3% depending on the location of your property.
On top of this, there are out- of- pocket expenses. The real estate agent will require you to fund marketing activities. You will have to foot the bill for print ads in local and national publications, flyers and costs for Internet- based advertising. These out- of- pocket expenses are recurring. Every month your property remains on the market, you will continue to fund these ad placements.
Overall, you might end up losing 6% off your final selling price once all the costs have been factored in. For a property valued at $600,000 that’s a loss of $36,000. Is $36,000 a loss you are willing to assume in exchange for the convenience of using the services of a real estate agent? Or are you willing to give FSBO a go?
If you take into stock everything that a real estate agent will do for you to sell your own property, you should ask yourself the following questions:
- Are these activities I can do myself?
- Would I have the time to run these activities?
- Can I pull FSBO successfully and move my property in the market within 4 months?
The answer to all your questions is “Yes”. With FSBO, you can do everything a real estate does and more!
Here are 5 reasons why FSBO is the way to go:
1. Harness the Power of the Internet
Where do you think the real estate agent will list your property? That’s right real estate agents list 80% of their properties in online listing services. The rest which have specific pricing or those categorized as premium properties are offered to targeted buyers.
There are many online listing services you can consider to post your property and they offer flexible subscription packages. These online listing services have somewhat diminished the advantage of real estate agents’ networks because thousands of interested buyers visit these sites.
2. More Control on the Marketing Budget
In addition to online listing services, you should also undertake traditional marketing activities to increase the chances of your property being sold.
But now you have more control over your marketing budget. Why should you spend $1,200 for an ad in a national publication, when you can spend only $35 for a local publication?
A national publication will expose your property to a larger audience but will it guarantee a sale? No. Keep in mind that most people go online to search for information.
3. Go to FSBO sites
The growing popularity of FSBO has led to the proliferation of sites servicing the needs of owners who want to sell their homes privately.
These FSBO sites offer different subscription packages. There are free versions where you will be tasked to do all the updates yourself. It is strongly advised to keep content; both text and images updated to generate new interest.
Thousands of interested property buyers and investors also go to FSBO sites because it is easier to negotiate pricing directly with home owners. Real estate agents will always factor in their commissions in the sale of the property and may not be as flexible when it comes to pricing.
4. Give Your Property the Attention it Deserves
How sure are you that the real estate agent is giving 100% effort in moving your property in the market? Perhaps the real estate agent really does want to sell your property; it’s just not his or her top priority.
Real estate agents manage hundreds even thousands of clients. They continue to receive calls and inquiries on property listing. An exclusivity agreement is one- sided. It means you cannot allow another agent to try and sell your property. Everything courses through your primary real estate agent.
For a real estate agent, this is just business. If your property is located in a slow- moving city such as Tasmania and the agent has clients in Melbourne, Sydney and Brisbane, where do you think the agent’s focus would be?
With FSBO, you can give your property the attention it deserves. You can schedule its “Open House”, auction and site visits at your convenience.
5. Real Estate Agents are not Lawyers
In real estate, contracts are important to protect the interests of the buyer and the seller. Before you even meet with prospective buyers, you must have contracts ready because in a sale time is valuable.
If a buyer shows genuine interest, he or she would request to a copy of your contract. Having contracts available will fast track the sales process. But real estate agents are not lawyers. They cannot make contracts. They will go to a lawyer to have these made.
More so, real estate agents cannot provide you expert advice on legal matters regarding the sale of the property.
You can have your own lawyer draft the contracts to cover the sale of the property. To save money, have your lawyer on board on a retainer basis for the duration of the sale.
So what is it that a real estate agent can do that you can’t? Time should not be an issue if you could schedule the site visits properly. You can simply include your preference in the marketing copy.
Inform interested parties that you need at least 2 days notice before any site visits. This will give you time to set up your house and fix your schedule to accommodate clients.
Another way is to set visitation schedules. This creates the impression your home is generating a large volume of interest that visits have to be organized. But what it readily accomplishes is setting time to accommodate prospective clients.
By going FSBO, you will be able to sell your home at the price you want and within a time frame that meets your interest.