Home Seller Tips - FSBO
Information on For Sale by Owner (FSBO) home listings and why you should think twice before taking this route to sell your home.
For Sale By Owner
Some people are reluctant to employ the services of a Salt Lake City Realtor because of the fee they have to pay. They instead opt for the For Sale by Owner (FSBO) route. If you are thinking of selling your own Salt Lake City home then you may want to read on.
The main reason for people attempting to sell their own home is the 6% fee they have to pay. Now this sounds a lot when you translate this into a monetary value ($12,000 for a $200,000 home), but lets put this into perspective. A studied carried out by NAR in 2003 found that the average home price achieved by FSBO's was $145,000 while the average home price achieved when a home is sold by a realtor was $175,000. Now that is a difference in sales price of 21%. So when someone says I saved 6% by selling my home myself, are they really saving money or are they losing money by not achieving the best price.
Why do FSBO's Not Achieve the Best Price
So why do FSBO's usually underachieve when it comes to the sales price.
One reason is that they price their home too low or too high. If you price your home too high (this is the most common mistake) then people will be put off and will either not bother looking round your home or will not make an offer.If it is too low then someone will purchase the home but the owner will not gain their best price. There are several reasons people incorrectly price their home. One reason why people tend to price their home too high is that they are emotionally involved. They look at the best homes on the market and say my home is just as good as that, therefore it is worth the same. They are not in the position where they can objectively compare their home to others in order to come up with a reasonable valuation. Another reason is that they do not have access to the necessary information. They may be able to look at the MLS and say that the house down the road was for sale for x amount, but they do not know how much it sold for and they do not have the expertise to incorporate differences in price based on the relative conditions of the 2 properties. In a hot market the home may have sold for more than the asking price and so this should be reflected in your homes sale price, in a slow market the opposite may occur.
Another reason is that they do not market their home to its full potential. The typical FSBO will market their home by placing a sign outside, advertising in the local paper and relying on word of mouth. This type of marketing will at best usually reach less than 20% of potential home buyers. Now if only 20% of home buyers know about your home then you are much less likely to receive an offer, never mind achieving your homes best price. If you sell your home using Trela then I will market your home to its full potential.
If a home buyer is represented by a Realtor then the Realtor may be reluctant to show your home. This could be for 2 reasons. First of all the FSBO may not want to pay the Realtor or may offer a reduced percentage (in Utah the seller pays the buyer's Realtor's commission). The other reason is that the chances are the seller will not be familiar with the home sale process and so the Realtor representing the buyer will finish up doing twice the work.So after reading this page are you going to save 6% by not working with a realtor or are you going to gain 15% by working with one?