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Fresno Real Estate News
January 25th, 2012
Tips for Fresno For Sale By Owner
Real estate is a lot like golf. It looks easy … until you try it.
Here are the top 5 reasons why most FSBO’s never sell their home:
1. FSBO’s can’t be listed in the MLS
The #1 selling tool in real estate is the Multiple Listing Service (MLS). Over 90% of all homes for sale are on the MLS. That’s because the MLS works — over 80% of all homes are sold through the MLS. As a for sale by owner, you don’t have access to the MLS. The Fresno MLS has very strict rules and only licensed real estate brokers can list a home on the MLS. That’s not all, when a home is listed on the MLS all of the home’s information is sent out to thousands of other real estate listing sites that are automatically connected to the MLS system.
The exact opposite is true of FSBOs. As a FSBO, your home just sits there and gets only the exposure you give it, e.g., newspaper ads, yard signs, etc. Unfortunately, these forms of marketing rarely work in today’s Internet age. In fact, most of real estate web sites actually lock-out FSBO’s. It’s kind of like going to a professional baseball game. If you don’t have a ticket, they won’t let you in.
If there’s only one bit of advice you listen to today, put your home on the MLS. You’re missing out on 4 out of 5 buyers if you don’t. We offer an entry level FSBO option starting at just $299, so there’s really no excuse not to. Click here to see all of our MLS plans.
2. Realtors won’t show FSBO homes
I can’t speak for all Realtors, but the majority that I know and deal with on a day-to-day basis won’t even bother attempting to contact a FSBO owner. Why? The MLS already has 90% of all homes on the market and each one comes with a commission to entice the Realtor to bring the homeowner a buyer. Compare that to what you’re offering. A handshake and pat on the back are nice, but they won’t pay the bills.
Yes, you could offer to pay a Realtor who brings you a buyer a commission, but the problem with that is, no Realtor will ever know that. Realtors simply assume FSBO’s won’t pay a commission or they already would be on the MLS. More importantly, a Realtor’s commission on the MLS is guaranteed in writing. Verbal FSBO promises aren’t legally binding, so unless you have something in writing no Realtor will even listen.
There’s no reason why you can’t have the same Realtors who are currently ignoring you, come beating down your door to bring you a buyer for your home. I’m saying this as both a Realtor and someone who sold both of my homes as a FSBO using the MLS before I got into real estate. Without it, you’re all but sunk. Click here if your home isn’t currently on the MLS and see how affordable listing on the MLS really is.
3. FSBO’s are usually over-priced
Most of the Fresno FSBO homes I come across are overpriced. About the only ones that aren’t are foreclosures and short sales. A little unknown secret in real estate is agents don’t set the price for a home, the homeowner does. All Realtors do is make a suggested price based on what other similar homes in that neighborhood have sold for recently. FSBO sellers don’t have access to these comparable home sale statistics like Realtors, so FSBO’s usually rely on online estimates from Zillow.com, Homevalues.com, etc. The problem with these websites are they’ve never seen your home. A computer has no idea if you put in marble floors from Italy or if you just painted your home florescent green — both of which would dramatically impact the price of your home.
Once a home is placed in the MLS, the #1 thing that sells any home — whether it’s large or small, new or old, worth $75,000 or $7.5 million — is price. If you price your home slightly below market value (like foreclosures do), your home will sell almost instantly. However, if you price your home even a few $1,000 dollars above market value, it will sit. And sit. And sit. So price your home correctly and you’ll notice a BIG difference in the number of buyers you’ll have knocking at your door.
4. Buyers are nervous around FSBO owners
Have you ever been shopping at a car lot eying a nice shiny car, but then the salesman shows up and starts following you around asking if you need any help, or if there’s any questions he can answer? If you’re like me, the moment the salesman shows up, all you want to do is tell him to please leave you alone so you can just look in peace, or run to your car and drive off.
Buyers get a similar feeling when they visit FSBO homes and the actual owner is present (it’s even worse when the homeowner gives the home tour). Not only do buyers feel almost queasy inside, they tend to clam up and wait until they get outside of earshot. In the meantime, there’s a lot of smiles and friendly nods, but inside, buyers are dying to get out so they can discuss their true feelings about the home. Compare that to when buyers walk through a home with an agent where they can discuss the good and bad points about the home openly and immediately … and in peace and quiet.
I understand why FSBOs do this. You really have no other choice. You certainly don’t want to let complete strangers wonder through your home unsupervised. Realtors on the other hand can guide buyers through a home and keep on eye on them at all times, as well as openly talk about and point out the home’s strengths.
The point is, nobody wants to hurt someone else’s feelings, so buyers in FSBO homes hurry through the home and then start talking outside. They also are far less likely to open closets, look in closed rooms, check out every room, or sit down on the couch and imagine themselves living there if the seller is right there watching them. In other words, buyers never get a chance to emotionally connect to a FSBO home. And unless that happens, you have almost no chance of ever getting an offer.
5. FSBO’s often run into legal troubles
FSBO sellers usually don’t understand all that goes into a successful real estate transaction. What contract works best? How much of an escrow deposit should be required for a particular transaction? What must the seller to with the deposit once received? What title company should be used? What is a title company? When a buyer threatens to back out of the contract (which happens frequently in real estate) how does the FBSO owner keep the deal together? What disclosures and addenda must be used to protect the seller against future lawsuits? The list goes on and on and on. As a Realtor with a law degree and Ph.D., I can tell you that making sure your i’s are dotted and your t’s are crossed is worth its weight in gold. As the owner of Clovis Real Estate, I deal with contracts and legal forms everyday and trust me when I say that you don’t want to handle these documents by yourself.
There you have it, the 5 biggest reasons why a Fresno / Clovis FSBO seldom sell. If your Fresno FSBO isn’t going as well as planned, you’re not alone. The average FSBO only has 3% chance of selling their home without a Realtor. But if you use all of these 5 tips you’ll dramatically increase your odds of selling.
Let us know if you have any questions… Feel free to leave a comment and let us know if you have experienced otherwise.
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