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You Can Sell Your Own Home

Each year fewer than 20% of home sold are ‘For Sale by Owner’ or “FSBO” listings. Without the benefit of a broker, these homeowners completed the sale of their homes — many to friends, family or neigbhors and some within their limted timeframe. They distributed marketing materials and bought advertising, scheduled showing appointments, screened and qualified prospects, manned open houses, fielded offers, negotiated purchase contracts, and coordinated the closing process with the buyer, the buyer’s lender, the buyer’s agent, and the escrow officer.

While homeowners are capable of investing the time and money necessary to market and sell their own home, why aren’t more home sellers doing so? Many FSBO web sites have promised hassle-free sales and the opportunity to save thousands of dollars in commissions, yet more sellers are using professional services than ever before. More than 7 in 10 buyers and sellers choose professional assistance when buying or selling their home instead of going it alone, and statistics show that many FSBOs eventually list their homes through a broker.

FSBO Internet Marketing Opportunities

The Internet promised to free homeowners and buyers from broker services by providing consumer alternatives, but recent statistics indicate that the trend towards hiring professional service providers continues. In 1997, 18% of homeowners sold their homes without a real estate professional. By 2003, during one of the strongest seller’s markets in US history, the percentage of successful FSBO closings had actually declined to 14%. By 2006, the number of successful FSBO sales was down to 12%. If you tally sales to friends, family, or neighbors, that number is significantly reduced.

With stories about home selling’s simplicity and saving commissions garnering a big share of the Internet spotlight, the truth is that there are many more reasons to hire a broker. Consider the legal requirements, the sales documents, the security issues, the time and money invested, and you’ll soon determine that working with a real estate professional makes good economic sense. The Internet contains a great deal of information, but it’s the experience of a Realtor® that transforms information into knowledge that works for you.

The Biggest Home Market in Texas

When you hire a Realtor® you access to the most efficient and essential home marketing system there is —- the Houston Association of Realtors® Multiple Listing Service (HARMLS). During 2004, over 72,000 property sales closed worth more than $12 billion through the HARMLS. The HARMLS plugs your home into the Realtor® network exposing your home to buyers across the country through participating web sites, like Realtor.Com, SterlingResidential.Com, and HAR.Com.

As Internet usage grew, many FSBO web sites were created to compete with the MLS, but these web sites were difficult to find and contained a limited inventory of homes. Homebuyers found the number of competing FSBO web sites confusing and inefficient. Never able to compete with the size and efficiency of long-established MLS systems, many FSBO sites joined their local MLS, giving their sellers much needed market exposure. But MLS market exposure completes only part of the home selling process. Realtors® are marketing professionals working in a cooperative effort to buy and sell residential housing. MLS marketing is essential, but it’s the cooperative Realtor® network that sells your house.

Adjust Your Selling Plan to Market Conditions

Residential home sales is a process requiring monitoring and adjustment —- it’s as much art as science. Managing the process requires timely feedback that you don’t get when you go it alone. The Realtor® network provides feedback early in the process, making it possible to monitor and adjust your home’s position in the marketplace. When you’re plugged into the Realtor® network, you’re getting up-to-date market information allowing you to make critical improvements to your selling plan.

And that feedback is crucial to selling success. Most homesellers have a limited amount of time to market and sell their home, and you don’t want to waste valuable time waiting for market information. It’s kind of like fishing. When there’s no action you’ve got to adjust your technique – change bait, move your line, change the depth. You’ve got to keep scanning for the right opportunity and make your move. Attracting buyers is much the same; you’ve got to be plugged into the market conditions, making the necessary adjustments to sell your house on time and at the right price.

Commission Savings Are Often Unrealized

The most popular reason for FSBO selling is the potential for saved commissions, and the Internet is full of stories about thousands of dollars saved in broker fees. It’s important to note that the perceived fee savings are typically offset by lower offer prices. Lower offers are the norm for FSBO listings, as buyers and their agents adjust their offers for the anticipated amount of broker fee savings.

Why are the offers lower? The answer lies within the MLS sales comparables. MLS sales are completed by brokers, and comparable sales include broker commissions as part of a home’s sale price. Once it’s understood that you’re not paying a broker fee, informed buyers and agents will reduce the market value of your home accordingly, lowering the offers you will receive. In fact, according to the National Association of Realtors Annual Buyer and Seller Survey, the FSBO median sales price was $198,200, as compared to $230,000 received by sellers with broker representation, a difference of 16%.

Your Next Home & Planning Your Move are Priorities

Do you have the time and commitment to effectively sell your home? Often your day-to-day routine interferes with your marketing plan. When you’re not available, neither is your house, and limited access is a common problem for FSBOs. In a seller’s marketplace with limited choices, this may not present a problem as buyers are competing for available housing. In a balanced or buyer’s market, however, serious buyers will move on if your home is unavailable.

When you hire a broker, your home is available and positioned for maximum market exposure. Your home sale is the broker’s priority and your agent handles the questions, inquiries, and showings. Realtors® facilitate and manage the process so you can go about making your next house purchase and planning your move. Hiring a Realtor® means you don’t put the brakes on the process when you’re not available.

Is FSBO Marketing For You?

If FSBO marketing is for you, increase your chances for success by committing to the process, establishing a marketing plan and budget, making your home show ready, and planning your schedule around showing appointments to increase your prospects. Be available; limited showing access signals that you aren’t serious about selling. Analyze the market conditions —- a seller’s market increases your chances for success while a balanced or buyer’s market requires more aggressive pricing and exposure. Price your home right —- days on market and list price are directly related.

To help with the planning and execution of your marketing plan, you can start here with the FSBO Do-it-yourself Steps to Homeselling and the FSBO Home Pricing Tips..

For other FSBO information, check Internet sources including some good books on Amazon.Com. If you are considering listing with one of the many FSBO web sites, be sure you understand the terms of service and just how much help you’ll get in the process. And finally, contact a Realtor® early in the process to discuss your alternatives and get answers your questions.