Using a Realtor to Sell Your Home VS For Sale By Owner

In the real estate industry we call home owners that market their property for sale on their own FSBO’s or For Sale by Owners. The obvious main goal of a FSBO is to save money on real estate commissions. In the past few years we have seen more For Sale By Owners, especially in the lower price points and in the neighbourhoods outside of city cores. There are a few reasons for this increase including an opening up of the MLS system, perception of a Realtor’s role and the market conditions.

Recently the MLS ( Multiple Listing Service) was opened up to the public, meaning a FSBO could list their property on the MLS (still through a Realtor and Brokerage) but could manage the selling process on their own without offering a co-operating broker a commission for finding a buyer. The reality is, Realtors will work with a buyer client for months, sometimes years so naturally a Realtor would like to be paid for their efforts. For this reason, Realtors may not work with you and bring their qualified buyers to your home. FSBO’s also tend to overprice their property, but a Realtor knows the true value and will introduce their client only to properly priced properties.

Realtors are often placed in the same category as a used car salesperson – perception has it that Realtors are rolling in the dough for very little effort. Over the past few years the real estate market has been booming making a Realtors job look easy with properties listed on the MLS selling hours or days after being put up for sale. What people do not realize is that there is a lot that goes on behind the scenes when selling a property and a lot of liability as well. It’s a full time job and people do not realize this: a Realtor’s job includes setting the price, marketing the property, manage appointments, negotiate the contract and ensure a smooth closing. We are talking about huge amounts of money when buying or selling a home and in most cases this is the largest purchase someone will make in their lifetime. Working with a Realtor as a buyer is a free service so there is really no benefit to the buyer not to as the buyer is protected by their own Realtor. As Realtors we live and breathe real estate so for us selling or buying a property is second nature: we know the questions to ask and what to look for.

The nice thing about working with a Realtor is that the seller doesn’t pay for the service unless the property sells. In the case of a FSBO, each time they engage a lawyer for assistance, they are charged an hourly rate regardless of whether the home sells or not. In the end, there are FSBO that sell their property on their own but about 80% of FSBO’s do end up listing and selling with a Realtor.

For Sale By Owner and the Web

Unless you have been living under a rock, you know the Internet has radically changed society. In real estate, this has led to a massive surge in for sale by owner properties on the web.

For Sale By Owner and the Web

In the past, choosing to go the path of “For Sale By Owner” could turn out to be incredibly difficult and overbearing. Realtors dominated the market because they had proprietary access to the multiple listing service, known as MLS, and you had to be listed in it if you wanted your property to be seen. Thankfully, the Internet has made selling a home yourself incredibly easy in a variety of ways.

If we flash back 10 years to the pre-internet days, we would find a real estate market that looks foreign to what we have today. In that market, the number one method for selling your home was to list it in the multiple listing service controlled by real estate agents. This, of course, allowed them to get their hooks into you and squeeze out a commission regardless of the quality of service they provided. If we flash forward to the present day, we find a new landscape.

A 2005 study of homebuyers across the United States revealed a fact that most realtors are loath to admit to, but know exists. Over 70 percent of homebuyers shop for potential properties on the internet. Yes, seven out of every 10 are hopping online and finding the property of their dreams. Why? The reason is very simple. Would you rather drive all over town looking at homes that don’t really match what you are after and blowing your valuable time or would you prefer to sit at your computer and click through properties with pictures? Unless you really love driving, the answer is obvious.

In our modern society, time is the most valuable asset. Listing your property on the internet is a huge time saver because it is all point and click. If you are selling, you can upload descriptions and pictures for buyers to view. If you are buying, you can see pictures of both the inside and outside of potential properties while relaxing at your desk. Either way, it beats sitting in traffic while driving all over town.

Choosing the Best "For Sale by Owner" Listing Service For Your Needs

Choosing to list a home independently rather than using a realtor can save thousands of dollars. However, failure to properly advertise a home that is listed as “For Sale by Owner,” or FSBO, can cause the home to remain on the market and not sell. FSBO homes are actively competing with homes listed by real estate agents who spend a great deal of money and time actively marketing their more popular listings. As a result these listings are prominently displayed and highly visible to potential buyers. FSBO homes can be effectively sold when effectively advertised and displayed.

Since many sellers choosing to list their home FSBO have little to no advertising experience, many websites have been created to guide homeowners through the “For Sale by Owner” process. These sites do cost money, however the expense is generally thousands less than a seller would pay to list their home through an agent.

When selecting an FSBO site it is important to carefully evaluate several important factors to insure that the money spent will actually help to sell the home. While choosing to list a home FSBO can save thousands of dollars, the money will only be saved if the home sells. Therefore, it is important to wisely consider and select the best FSBO site for your needs, even if this means spending a little more.

Prominence Matters

There are many websites available to help owners showcase their “For Sale by Owner” homes. Some are well known and highly trafficked, other companies offer much less exposure due to the fact that they are not well-known or popular sites. Selling a home is simple mathematics. When more potential buyers see a listing, more will visit for a showing. More showings will result in the possibility of more offers. Offers lead to the eventual selling of the home. It makes sense then that having many people view the home listing is critical to eventually selling the home. Choosing a well-known company with a popular site is very important.

MLS Listing Number

Obtaining an MLS listing number will insure that your home will be accessible to potential buyers and real estate agents as they perform searches. Failure to obtain an MLS listing number will result in much less visibility for your home. While an MLS number can be obtained on your own, it is wise to remember that the best FSBO sites generally include them in all of their packages. Before selecting an FSBO service, be sure that they will be able to provide this critical home selling tool.

Customer Service

Many FSBO sellers encounter questions and frustration as they attempt to market their home. The many tasks required to effectively sell a home can be daunting. This is especially true for customers with limited technological expertise. It is important to have additional help available should questions or problems arise during the selling process. Examine potential FSBO service’s customer service policies and availability. Be sure to select a company that has a policy that will coordinate with your needs and schedule.

Professional Website and Materials

It is unwise to select any FSBO service without first thoroughly examining their website and promotional materials. A professional looking website, free from grammar and spelling errors, indicates the company’s ability to effectively market your home. Find a service with an attractive website. If they include promotional materials in your package like signs and flyers, be sure that these also look professional. You are paying for every element included in a package and it is critical that these elements will be able to be used to attract potential buyers. Unprofessional materials and websites may actually repel the customers that you are trying to attract.

Extras

Many different FSBO services offer a variety of packages to meet individualized needs. Each package carries different benefits and can include a variety of valuable extras. These can include signs and flyers for marketing purposes, professional photography of the home to use in creating the listing, or guarantees which offer money-back if the home is unable to sell. These extras can be valuable tools and should be considered as various companies are weighed.

Cost

Since you are choosing to sell your home FSBO, cost savings are likely an important consideration. However, it is important to consider value in addition to cost. Determine the reasons behind each company’s pricing method. Some may be more expensive but worth the additional value, while others may cost less and in turn provide much less. Weigh cost and services provided to select a company that will provide the best value.

It is impossible to compare FSBO listing services by price alone. Website prominence and visibility play an important factor in determining package pricing. More prominent companies generally charge more than their lesser known competitors, for good reason. You are paying for every aspect of an FSBO listing service and website prominence is a key factor.

Making your Decision

While choosing to list a home “For Sale by Owner” can save thousands of dollars, success is dependent on effective marketing and advertising. FSBO services can provide an effective and useful marketing element when selected wisely. A good FSBO service is worth an investment because it can help to make sure that your home actually sells.

By selecting a reputable company with a prominent website, you will be able to showcase your home to many potential buyers. Since every service is different, it is important to select the best service to increase the likelihood of selling the home. An ineffective FSBO service is a waste of money and time.