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| "For Sale by Owner" - It's a Growing Trend That's Here to Stay |
By:
Deane Alban |
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The internet has changed the way we buy and sell almost everything, usually eliminating the middle man in the process. We can buy almost everything we need online.
Many services we once relied on professionals for, we now do ourselves, too. We no longer call our local travel agent to book us a vacation, we plan a trip ourselves on a travel site. We do our own income tax returns using online programs and submit them online to the IRS, bypassing the accountant. We do research online instead of visiting our local library. I can rent an ebook online without stepping foot in my local library. And these industries have had to adjust to the times.
Real estate agents used to be an essential "match maker" who brought buyers and sellers together. They were the necessary middle man. Now buyers and sellers can easily find each other without an agent. Using the internet, they can find each other on the MLS, online classified sites, FSBO listing sites, and even social media sites such as Facebook and YouTube. According to the National Association of Realtors (NAR), 87% of people looking to buy a house begin their search on the internet. This is huge!
Statistics support that more and more people are moving away from using real estate agents, and selling "for sale by owner", also referred to as FSBO. The NAR found that 23% of home buyers didn't use a real estate agent to make their purchase. The most popular "for sale by owner" site gets 740,000 visits per month.
Real estate agents provide other services, of course, besides listing your house. They should also help you determine asking price, market your house, provide you with a contract and disclosures, and negotiate offers.
As a real estate investor, I have bought and sold many, many houses and here is my experience with each of these services and how you can do them yourself.
1. Asking price - Real estate agents can do their research and give you a suggested price range but not the absolute perfect price. It is still ultimately the seller's responsibility to decide on the price. If you are selling "for sale by owner", you can purchase a home valuation and get the same information for about $30 online. Or you can have an appraisal for around $350. This is the gold standard of pricing options. DO NOT under any circumstances rely on those free "guesstimate" sites. I've compared them with houses I knew the value of, either having just sold or had appraised, and they have been off by as much as 40%!
2. Market Your House - Real estate agent marketing involves putting your house on the MLS, and sometimes in the newspaper or on Craigslist. You can easily and inexpensively do this yourself for $300 to $400. I find one of the best resources for marketing your house is to work with a mortgage broker who can give you promotional materials for loan programs to attract buyers.
3. Contracts and Disclosures - You can get all of these from a real estate attorney or online. You should be contacting one about handling your closing, anyway. Don't fall for the "buy disclosures online" scam. You can find your state's required disclosures online and download them for free!
4. Negotiate and Review Offers - When a buyer decides to make an offer on your house, he has to call his agent, who has to call your agent, who has to call you. Once you've decided on your counter offer, you have to call your agent back, who calls the buyer's agent, who calls the buyer. And round it goes. This can take days to reach everyone and agree on one point. And don't forget, price isn't the only term to be agreed upon. You and the buyer need to agree on the following: earnest money deposit, down payment, contingencies, splitting of closing costs, other property to be included, and date of possession. Sometimes it gets downright crazy. I'd much rather talk to the potential buyer directly. I've never felt I've had an agent actually "negotiate" for me at all. They are actually required to present to the buyer's agent what the seller has told them to.
Although selling FSBO isn't for everyone, with all the tools and information now available, I feel it is something that most people should consider. Particularly since one out of three FSBO sellers sell to someone they already know. Why not at least try for a few weeks. You may be one of the lucky ones!
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Deane Alban is an experienced real estate investor and author of "The Truth About FSBO - Complete Selling System". "The Truth About FSBO" gives homeowners a step-by-step system to sell for sale by owner the RIGHT way. Visit http://www.TruthAboutFSBO.com to receive an eye-opening free report, "Revealed: The REAL Reasons Houses Don't Sell" which will save you time, money, and frustration when selling your house. |
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