Why FSBO fails
For Sale By Owner (FSBO) is popular in America and the UK and
where up to 30% of properties are sold without the use of real
estate agents. The trend is on the increase in Australia where
it is also known as private sale.
Many homeowners however try the FSBO route to sell their home
with no success. Eventually these owners turn to their local
real estate agent to sell their property. Real estate agents
know this to be the case, which is why so many try to contact
owners who are selling their own home.
The difference between a successful and unsuccessful private
sale comes down to the attitude of the owner. Too many owners
are greedy or have unrealistic expectations of the amount of
work that will be involved in selling their own home.
Professional valuation Valuing a property for sale is one
of the hardest parts of the sale process. At
www.smartvendor.com.au we recommend that owners obtain a
professional valuation of their property.
A valuation from a professional property valuer is different
from a valuation that a real estate agent may give you. Often
the real estate agents value will be inflated to try and get the
owner to list with the agent. Once the owner is locked into a
contract of three months or more the agent will work hard to
lower the owner's expectations and persuade them to accept a
lower price. This is a process known as conditioning.
A professional valuer has no reason to inflate the value of your
property as they are paid a set fee irrespective of the
property's value. Professional property valuers are also legally
accountable for the valuation that they give you.
If owners are greedy and ask more than their property is worth
their home will stay on the market unsold for months. In falling
markets such as the current Australian real estate market
overvaluing a property can cost the homeowner thousands of
dollars. All the time a property sits on the market not selling
due to its over-inflated asking price the true price of the
property is falling.
It is often the case that buyers are better informed than
sellers when it comes to property values. Buyers may see many
properties a week and will be undertaking formal or informal
market analysis by comparing the properties that they see
against each other. We encourage owners to get out and visit
other properties to see how their home compares to others that
are for sale.
Lack of marketing Too many owners think that all they
need to do is place one online advert or place a for sale sign
in the front yard and buyers will be knocking on the door
offering the full asking price.
Whilst it is true that some properties do sell in this way for
most homeowners a combination of marketing techniques will be
required.
The Internet is an amazingly powerful tool when it comes to real
estate. Homeowners are able to post a description of their
property complete with pictures on the web for potentially
millions of buyers to see. Buyers are able to search for
properties any time of the day or night and make a shortlist of
properties that they are interested without even leaving the
house.
But not all buyers find homes this way, many drive around
neighbourhoods that they are interested in searching out "For
Sale" boards, others find properties through flyers posted at
local stores.
If a homeowner wants to achieve the best price in the shortest
amount of time then they must advertise to as many buyers as
possible.
Real estate agents do not use only one medium to advertise
client's properties; FSBO homeowners would do well to learn from
their example. Homeowners selling their own home should think
about how much advertising they could buy for the amount of
commission that they are saving. Spending just 10% of the saved
commission would massively increase the chances of selling their
property.
Poorly presented homes Having got a potential buyer to
view the property many sales are lost due to the poor
presentation of the home.
Buyers often lack imagination when it comes to seeing a
property's potential. Sellers need to make it easy for buyers to
appreciate the good aspects of the home. A good spring clean, a
fresh coat of paint and basic maintenance can make a home much
more appealing.
It may be time consuming preparing the property for sale and
showing interested buyers around but owner must be prepared to
invest some time and effort if they want to sell their home for
the best price.
FSBO can be a great way for owners to sell their property. The
savings in agent commission are significant and many owners
report that the whole process is less stressful than selling
through an agent as there are no conditioning pressures.
Selling your own home does involve a certain amount of effort
preparing the property for sale and dealing with buyers. If an
owner is not prepared to put in some effort and to advertise to
as many potential buyers as possible then they may be better off
listing with a real estate agent.