11 Reasons Why FSBO Sellers Should Hire a Real Estate Agent

Author: Shawn Penoyer

FSBO or sell with an agent for more money

11 Reasons Why FSBO Sellers Should Hire a Real Estate Agent

Why FSBO Sellers Should Hire a Real Estate Agent? While selling your home by yourself, without getting a seller’s agent involved, may seem like a great way to save money on a commission fee, the fact is that most potential FSBO sellers end up regretting the decision. If you’re considering going FSBO, or you’re already listing your home that way and things aren’t exactly working out as planned, then keep reading. Using recent National Association of Realtors statistics, here are a few reasons you may want to reconsider.

1) FSBO Market Share is Shrinking

According to the most current data from the National Association of Realtors (NAR), FSBO sales accounted for only 9% of all home sales in 2013*. Not too impressive, is it? Well, it gets even worse when you take into account that FSBO sales seem to have been steadily declining over the past decade from a 2004 peak of just 14%*.

2) The Price Isn’t Right

While “location, location, location” might be the home buyer’s mantra, as a home seller, that’s one variable you really can’t change. Instead, the key factor to selling your home in a reasonable amount of time is pricing it correctly, which isn’t nearly as easy to do as you might think. Sure, you can go online and see what nearby homes have sold for, but are you really comparing apples to apples here? An experienced Realtor will be able to perform a detailed market analysis which not only takes into account your home’s condition and any improvements you might have made, but can generate an up-to-the-minute temperature reading of just how hot (or not) your local market really is.

3) Yard Signs and Newspaper Ads Just Won’t Cut It

Believe it or not, many FSBO home sellers still believe that all they have to do is throw up a “For Sale” sign in the yard and the world will beat a path to their doors. Sorry, but today’s tech-savvy buyers (See reason #4) prefer to house-hunt in more methodical ways than simply driving around the neighborhood. And yet, according to the NAR, this is still the top FSBO marketing method, as 36% of would-be sellers rely on yard signs*. The key word here is “would-be”, since only 10% of all buyers actually find their homes via yard signs**( Statistics are even more dismal for sellers who choose print media, since only 1% of buyers find homes through newspaper ads.

4) Craigslist Can Be Creepy

Okay, so you’re internet-savvy, you know all about Craigslist and similar online, free classified listings. That’s fantastic, since NAR’s 2014 housing market profile shows that 92% of all home buyers use the internet to help them in their search***. But (and it’s a really big but) – these online classifieds are also seen as a happy hunting grounds for scammers, criminals, and dangerous people you really do NOT want to be admitting to your home. Realtors don’t have to resort to dubious bargain-basement listings, but can instead list your home on highly-qualified sites such as Zillow or Realtor.com. (See reason #6 for more on what resources Realtors have available.)

5) Your FB Friends Just Aren’t In the Market

Marketing via social media, what could be more up-to-the-minute? Sure, you may have hundreds of Facebook friends and Twitter followers, so that’s a potentially sizable audience if you decide to advertise your home that way. Think about it, though – how many of them actually live in your area? And of these, how many are actually looking for a new home? If you do manage to sell your home that way, you’ll be one of the lucky few.

6) Realtors Have All the Right Tools

91% of all Realtors make use of social media sites as a marketing tool. Just about everyone browsing their page is interested in buying a home in the local area. What’s more, Realtors are actively engaged in driving traffic to their own websites and they also have the capacity to list homes on the Multiple Listing Service (MLS). In order to list a home on the MLS, an FSBO seller will have to pay an outside agency several hundred dollars, as well as having to cover the cost of the buyer’s agent fee. At present, NAR data shows that only 7% of FSBO homes are listed on an MLS website.

7) They Can’t Buy It If They Can’t See It

One thing you might not be taking into account as a potential DIY home seller is just how available you’ll need to be in order to show your home. Are you really going to be able to call in sick or cancel your plans every time someone wants to look at your home? Potential buyers aren’t going to want to work around your convenience. A professional Realtor, however, doesn’t need to take a day off work in order to show your home, since this IS his/her job.

8) You Don’t Want To Waste Your Time With Bargain Hunters

If you’re acting as your own sales agent, how do you decide who’s a legitimate buyer and who’s just going to be wasting your time? Seller’s agents have the necessary tools to determine whether a buyer is pre-qualified with a home loan sufficient to cover the cost of your listing. What’s more, FSBO homes are more likely to appeal to the type of buyer who’s out for a rock-bottom bargain-basement deal and may even go so far as to want you to give them a cut of the commission you’re saving by foregoing a Realtor’s services.

9) You’re Drowning in Paperwork

In case you’re not already getting the picture, selling a home is pretty hard work! Not only do you have to find and vet potential buyers, but once you’ve found that buyer, then the real headaches begin. Every detail must be attended to in order to make the sale go through…and what’s more, if you neglect something crucial like a mandatory disclosure or inspection report, you may find yourself facing not just the loss of the sale, but also potentially serious legal repercussions. There is some paperwork to go through even if you work with an agent, but that’s still a lot easier than doing it all yourself.

10) Hiring a Selling Agent Needn’t Cost You a Penny

What? How can this be? Don’t all seller’s agents work on commission? Well, yes, they do. But real estate agents themselves bear many of the costs you might otherwise have to pick up, like marketing your home and screening buyers. A savvy sales agent can also build the cost of his/her commission right into your home’s asking price, so you won’t feel a thing. Here are some tips on choosing an agent.

11) In Fact, You Might Even Make Money With A Realtor

And the survey says…bottom line, the average FSBO home last year sold for $208,700 while the average agent-assisted home sale was $235,000. This means that an agent-assisted home sale can net you an 11% larger profit. Assuming you paid a 5% agent commission on a $235,000 home, or $11,750, you would still come out $14,550 ahead! Looks like a win for everybody.

If you’re willing to put up with all the headaches of listing, selling, and closing on a home, and you don’t mind settling for what may well be a lower price, then an FSBO sale may be for you. If, on the other hand, this all sounds like too much work for too little payoff, you’re in good company. It seems that, according to a Massachusetts Real Estate News article, over 80% of all FSBO sellers eventually wind up choosing to sell their homes by using an agent instead (and this number applies nationwide, not just in Massachusetts). If you’d like to skip the headache and proceed straight to the happy ending, Shawn Penoyer with Keller Williams is here to help. Connect with a top performing agent, and compare multiple proposals today.

Jun 07 No Comments

Selling Your Home ‘By Owner’: What’s Really Happening?

Author: Shawn Penoyer

Categories: Atlanta Real Estate,For Sellers,FSBO's

FSBO is “down,” but is it really?
The 2016 Profile of Home Buyers and Sellers by the National Association of Realtors found that for sale by owner sales are at an all-time low, at only eight percent, versus the all-time
The 2016 Profile of Home Buyers and Sellers by the National Association of Realtors^® (NAR) found that for sale by owner (FSBO) sales are at an all-time low, at only eight percent, versus the all-time high set back in 1981 at 21 percent.
Considering it’s easier and less expensive to market a home today versus the pre-web era, how is it possible that FSBO sales have been declining since the advent of the internet? This runs contrary to trends experienced in other vertical markets, such as investing, travel and tax preparation, which have all experienced significant do-it-yourself growth bolstered by web services. How is it possible the real estate market has defied such trends?
A deeper look at the data in NAR’s report reveals that while there has been a decline in true FSBO, self-directed real estate has actually increased over the past 15 years — it’s just a matter of semantics that need to be analyzed to see this trend.
If a home seller uses any realtor service, even something as minimal as just having an agent upload their listing to the MLS to advertise their home sale, NAR actually includes them in a comprehensive pool of sellers (89 percent) engaged in “agent-assisted” sales. This oversimplification of the “agent-assisted” category blurs the lines and doesn’t accurately represent the volume of sellers moving away from traditional real estate brokerages and their higher commission rates.
Another recent survey (conducted by Redfin in August 2016) tells a different story. It found that 25 percent of people who sold a home in the past year did so without the help of a full-service agent, with 15 percent of sellers using a limited service agent and about 10 percent listing without an agent’s help, slightly higher than NAR’s findings of eight percent. Those who would have formerly been inclined to conduct a FSBO transaction have traded up to the better option available today and are paying a nominal fee to advertise their properties on the MLS. So, if you sum up the percentage of FSBO and quasi-FSBO (aka “limited service”), the self-directed segment has actually increased almost 20 percent since the ’80s. This makes sense when you consider the growth of more self-directed behavior in other industries due to the efficiency and options that online services offer.
Due to important antitrust legislation surrounding NAR and the MLS, which has brought about the rise of web-based real estate service models, self-directed sellers have more options today than they did in the early ’80s.
During the mid-2000s, the Department of Justice ruled that NAR must make the MLS and all of its data accessible to any brokerage service and its customers. Subsequently, self-directed consumers inclined to FSBO-type behavior started flocking to alternative internet-based “minimal” and “limited” service brokerage models and their more attractive selling options. These sellers still self-manage their sale and consider themselves conducting a FSBO-type transaction.
Future sellers should carefully consider the experience of the growing share of sellers today using self-directed methods. There is major opportunity for today’s savvy seller to retain much of their profit through tech-enabled innovation in the real estate industry, and it’s important to understand the evolution of FSBO and what has changed.
Here are a few considerations for home sellers looking to take control of their home sale.
Analyzing savings: The bulk of savings for FSBO-oriented sellers will come from savings on seller’s agent commissions. According to the U.S. Census Bureau, the average home in 2015 was valued at over $350,000. Sellers choosing to handle most of the process on their own — and therefore paying just a buyer’s agent fee to get their home listed on the MLS — have the potential to save up to 2.5 to three percent on commissions. Based on the above value this would amount to $8,750 to $10,500, usually less a transaction fee. Some online brokerages offer a full-service package in which the seller works with a professional agent but pays a lower seller’s agent commission than the traditional model. In that case, the seller will net less overall savings, but this option might be worth it for first-time sellers or those too time-constrained to manage the process on their own.
Determining the list price: There are a lot of variables that come into play when determining the list price of a home including local inventory, interest rates, average market price for comparable homes, appraisal value and the sellers’ personal and financial objectives. Many online real estate services will offer valuation tools and allow sellers to research comps to determine the right asking price.
Considering sweat equity: Managing a home sale requires a time commitment. Depending on what parts of the process sellers want to take on, they should expect to spend time on the front end determining the list price, preparing the home for showing and hosting open houses and on the back end negotiating the sale and seeing the financial transaction through to completion. Many online real estate services offer solutions to assist with some or all of these steps.
Here’s the takeaway. The first FSBO platforms were meant to simply eliminate the middleman — and some home sellers struggled as a result because they didn’t have access to an agent network to market their listings or professional support when needed. Today, the FSBO model has evolved and will continue to do so, further disrupting the industry to the benefit of consumers.

Source: Selling Your Home ‘By Owner’: What’s Really Happening?

May 25 No Comments

Selling Your Home Yourself Could Cost You

Author: Shawn Penoyer

Categories: For Sellers,FSBO's

Selling Your Home Yourself Could Cost You BIG TIME!

Are you really thinking of selling your home yourself? In this extremely hot real estate market, some homeowners might consider selling their homes on their own which is known as a For Sale by Owner (FSBO). They rationalize that they don’t need a real estate agent and believe that they can save the fee for the services a real estate agent offers.

However, a study by Collateral Analytics reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many casesbelow the average differential represented by the prevailing commission rate.”(emphasis added)

Why would FSBOs net less money than if they had used an agent?

The study makes several suggestions:

“There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
“Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
“Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

Conclusions from the study:

FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
The data suggests the average price was near 6% lower for FSBO sales of similar properties.

Bottom Line

As Dave Ramsey, America’s trusted voice on money, explains:

“Research has shown that, between mistakes, lack of negotiating skills, pricing errors and general exposure on the market, you’ll cost yourself more than the real estate commission…You’ll come out slightly better and with a lot less hassle if you use a top-shelf agent.”

Feb 13 No Comments

Top 10 Websites to List your House for Sale

Author: Shawn Penoyer

Categories: For Sellers,FSBO's,Selling Property

Top 10 Websites to List your House for Sale

Are you an Atlanta Homeowner and thinking about listing your house for sale? Well if you are, I am sure you are considering your options, as any smart Seller would be. While you might want to give this a shot, you do need a lot of tools at your disposal to accomplish this, including photography (uhh, great photos are a MUST), availability to show your home, and listing it on the internet or even the MLS if you can. Although a good agent can syndicate your listing to hundreds of websites much easier, I want to help you with a list of the top 10 Websites to List your house for sale!

To get started, here is a list of the top 10 websites that I would recommend you start:

1. Homefinder.com

This is a common site as most people visit the site to look for vacant apartments or for the purpose of buying a home. It said to be the best site to sale a house as it is designed with both the desktop and mobile platform. This means that with an internet connection, anyone can visit the site. This site also has a mortgage calculator and has a GPS inbuilt system that makes it easy for your buyers to know the exact location of the house on sale.

Dec 26 No Comments

Top 5 Reasons You Should Not For Sale By Owner

Author: Shawn Penoyer

Categories: For Sellers,FSBO's

Top 5 Reasons You Should Not For Sale By Owner | Simplifying The Market

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 94% of buyers search online for a home. That is in comparison to only 17% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

51% on the internet
34% from a Real Estate Agent
9% from a yard sign
1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

The buyer who wants the best deal possible
The buyer’s agent who solely represents the best interest of the buyer
The buyer’s attorney (in some parts of the country)
The home inspection companies, which work for the buyer and will almost always find some problems with the house
The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons that the percentage of people FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.

Studies have shown that the typical house sold by the homeowner sells for $185,000, while the typical house sold by an agent sells for $245,000. This doesn’t mean that an agent can get $60,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, let’s get together and discuss the options available in your market today.

Source: Keeping Current Matters

Nov 28 No Comments

5 Reasons to Hire a Real Estate Professional When Buying & Selling!

Author: Shawn Penoyer

Categories: First Time Home Buyers,For Buyers,For Sellers,FSBO's,Move-Up Buyers

5 Reasons to Hire a Real Estate Professional When Buying & Selling! | Simplifying The Market

Whether you are buying or selling a home, it can be quite an adventurous journey; you need an experienced Real Estate Professional to lead you to your ultimate goal. In this world of instant gratification and internet searches, many sellers think that they can For Sale by Owner or FSBO.

The 5 Reasons You NEED a Real Estate Professional in your corner haven’t changed, but rather have been strengthened, due to the projections of higher mortgage interest rates & home prices as the market continues to pick up steam.

1. What do you do with all this paperwork?

Each state has different regulations regarding the contracts required for a successful sale, and these regulations are constantly changing. A true Real Estate Professional is an expert in their market and can guide you through the stacks of paperwork necessary to make your dream a reality.

2. Ok, so you found your dream house, now what?

According to the Orlando Regional REALTOR Association, there are over 230 possible actions that need to take place during every successful real estate transaction. Don’t you want someone who has been there before, someone who knows what these actions are, to make sure that you acquire your dream?

3. Are you a good negotiator?

So maybe you’re not convinced that you need an agent to sell your home. However, after looking at the list of parties that you need to be prepared to negotiate with, you’ll realize the value in selecting a Real Estate Professional. From the buyer (who wants the best deal possible), to the home inspection companies, to the appraiser, there are at least 11 different people that you will have to be knowledgeable with and answer to, during the process.

4. What is the home you’re buying/selling really worth?

It is important for your home to be priced correctly from the start to attract the right buyers and shorten the time that it’s on the market. You need someone who is not emotionally connected to your home to give you the truth as to your home’s value. According to the National Association of REALTORS, “the typical FSBO home sold for $185,000 compared to $245,000 among agent-assisted home sales.”

Get the most out of your transaction by hiring a professional.

5. Do you know what’s really going on in the market?

There is so much information out there on the news and the internet about home sales, prices, and mortgage rates; how do you know what’s going on specifically in your area? Who do you turn to in order to competitively price your home correctly at the beginning of the selling process? How do you know what to offer on your dream home without paying too much, or offending the seller with a lowball offer?

Dave Ramsey, the financial guru, advises:

“When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman.”

Hiring an agent who has their finger on the pulse of the market will make your buying or selling experience an educated one. You need someone who is going to tell you the truth, not just what they think you want to hear.

Bottom Line

You wouldn’t replace the engine in your car without a trusted mechanic. Why would you make one of the most important financial decisions of your life without hiring a Real Estate Professional?

Source: Keeping Current Matters

Oct 03 No Comments

Think You Should FSBO? 5 Reasons to Think Again!

Author: Shawn Penoyer

Categories: For Sellers,FSBO's

Think You Should FSBO? 5 Reasons to Think Again! | Simplifying The Market

In today’s market, with home prices rising and a lack of inventory, some homeowners may consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.

Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent studies have shown that 88% of buyers search online for a home. That is in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. Do you?

2. Results Come from the Internet

Where did buyers find the home they actually purchased?

44% on the internet
33% from a Real Estate Agent
9% from a yard sign
1% from newspapers

The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

The buyer who wants the best deal possible
The buyer’s agent who solely represents the best interest of the buyer
The buyer’s attorney (in some parts of the country)
The home inspection companies, which work for the buyer and will almost always find some problems with the house
The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Studies have shown that the typical house sold by the homeowner sells for $210,000, while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.

Bottom Line

Before you decide to take on the challenges of selling your house on your own, sit with a real estate professional in your marketplace and see what they have to offer.

Source: Keeping Current Matters