National for sale by owner companies – they may not save you as much as you think!

Business

The seller of the home for sale by owner: FSBO (Fizz-Bow). One of the most requested real estate clients. Why? Because their homes are for sale and real estate agents can mail these people any number of applications without stepping on the feet of another agent. These are the home sellers who have risked potentially thousands of dollars in listing fees. They have done a bit of homework and have decided to try to save some of the capital that has increased in their homes.

As a real estate agent, I love sellers of homes for sale by owner! Does it sound a bit strange for a real estate agent to say they love sellers of homes for sale by owner? Maybe, but when the numbers are in and it’s clear that only 14% of all homes that are for sale by owner are actually sold as real for sale by owner, you’ll understand why. Because that leaves 86% of these home sellers as leads for real estate agents (like me) to try to snatch! And the number of true FSBOs has dropped from 19% in 1991 to just over 14% in 2004.

Now, as with many statistics, it depends on the numbers you are looking at. Large national landlord sales companies (FSBOs) have one set of numbers and the National Association of Realtors (NAR) has another set of numbers on homes that are actually sold by owners. Personally, I stick with the numbers provided by the NAR (which are the numbers cited above). They have been collecting and providing these numbers for much longer than the national FSBO companies. The bottom line is that owner-selling successes are declining.

One of the main problems I see with the owner-for-sale segment of the real estate market is that they have a tendency to fall in love with the idea of ​​selling their home on their own, but fail to create a good endorsement. -up plan that can be quickly implemented in case you are unsuccessful with your Sale by Owner adventure. And many of these people are militants of the traditional and mainstream real estate community! Many of them regard traditional real estate companies and agents as nothing more than charlatans and snake oil salesmen! Which may be great in a red-hot real estate market, but not so great in a changing real estate environment.

Just a year or two ago, a home salesperson could put up a “For Sale” sign in their front yard in the morning and sell their home before dinner. And many times at or above the asking price! It’s not like that. The housing market has had a great streak, but is now showing signs of exhaustion. For Sale by Owner signs now stay in the front yard for weeks and months instead of hours and days. But even in this changing market, I still recommend that home sellers at least try to sell like a true For Sale by Owner. I recommend that you give it a try for a set period of time, say, four to six weeks, and if the house doesn’t sell, give it up and move on.

And many times it is that move that drives the real FSBO into financial hot water. First, they don’t have a good backup plan that can kick in quickly when they finally give up on the FSBO dream. Second, they often end up going from extreme to extreme by listing with a reputable traditional real estate company and paying a 4% to 6% listing commission. (Just for the record, the national average listing commission is currently 5.1%.) Or they can fall into the smoke and hype of one of the big national homeowner assistance companies and still end up paying a huge flat fee and a Multiple Listing Service (MLS) listing commission on top of that. So what can a poor and uninformed FSBO do? Outsmart them, of course!

But before our FSBO hero can overcome them, he first needs to know how they work. So, now let’s take a look at the truth behind another type of for sale sign; Let’s take a look at the truth behind the for sale by owner sign.

The real FSBO is a home seller who does not pay a red penny in sales / listing commissions and does not use any type of real estate company or conventional real estate agent to sell their home. These people are totally alone! They make the sign in the yard, price their home, take all calls and deal with potential buyers, hold open houses, write and pay for each and every print ad, rate buyers, and They prepare all the paperwork and documents necessary to close the deal. These brave souls are sellers who fall into the magical 14% of successful, real homeowners whose homes actually sell.

But what about the other 86%? Well, they usually end up falling into the Nearly For Sale by Owners category: AFSBOs as I’ve called them (pronounced Affs-Bows). Instead, they choose to list their property with one of the many new and emerging real estate service companies that are challenging conventional brokerage firms by offering an a la carte menu of real estate services.

Some of the biggest names in the For Sale By Owner real estate assistance business offer many of these services on demand. These large national homeowner assistance companies are playing the same game that large traditional brand name real estate companies have been playing for decades. They are betting on that so-called “big, trustworthy, familiar name” to sell their services. And it is working! One of these great national FSBO support companies opens a new franchise office every 48 hours! They hope to reach 1,800 franchises in 2008.

The current president of this national assistance company FSBO is quoted as saying on the company headquarters website: “The winds started to turn away from the traditional way of compensating REALTORS® years ago. It’s like a gale now. And by all signs, it’s going to continue to grow strongly. ”Sounds great to me! A gale of change blowing through the stagnant waters of today’s real estate industry is just what is needed. But FSBOs can still find one. better and more cost-effective way (without sacrificing service and knowledge) to navigate equity in your homes to safer waters.

If you’ve decided to go the route of a true For Sale by Owner, that’s great! By now you know the exercise. And you can find enough information in books and on the web to help you on your quest for the FSBO dream. But if your backup plan (and as you know, everyone should have a backup plan) is to go the non-traditional route like AFSBO, you must first get over the notion of wanting, or thinking you need, a “big, familiar name” for sell your home. The idea of ​​no longer needing that “big, familiar name” applies to AFSBOs as well as to traditional and conventional home sellers. And AFSBOs should never forget the fact that these large national FSBO assistance companies know full well that 86% of their sellers will end up not as real for sale by owners, but as discounted commission / flat rate listings! And the flat fees charged by these large homeowner sales assistance companies can be huge! Some fees range from $ 2,500 to $ 4,400!

Before you sign on the dotted line with any real estate company, be it for sale by owner or traditional, get the facts. Know the real cost. Read the fine print. And beware of the upselling of services. It is the additional services that can put a FSBO in the poor house of the listing commission before they find out what has affected them. Get these companies to put it in writing. Because, if it is not in writing. It’s not going to happen!

But like a bug caught in a spider’s web, most home sellers who sign up with these great national FSBO assistance companies, out of ignorance or convenience, will continue to the next level and end up paying more than they should. to sell your house.

I know this may sound subversive, but hey, you’ve worked hard to buy your current home and the value you have is real money! Why give it away? What you need to do now is work a little harder to educate yourself on the ever-changing real estate industry and all that it currently has to offer. And the more you educate yourself, the greater your home equity that can prevent it from falling into the hands of overvalued real estate companies, be it traditional ones or FSBO assistance. A little knowledge is not always a dangerous thing, it can often save you money!

“There is nothing as expensive as ignorance.”

-Horace Mann – The Father of American Education

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