The Question that I hear all the time is:
“Why is my FSBO house not selling as Quick as one’s that are
Listed with a Realtor”
I get this question a lot! Either from Home Owners who I have personally conducted a Listing Presentation for or Friends (future Listing Clients) who call and want the Answer to why they are having this issue.
Simply put- The #1 Reason why most FSBO homes end up listing with a Realtor or an Agency is that the home is viewed as “Overpriced” from the Buyers stand point.
Sound Weird? Well, 9 times out of 10- The FSBO Sellers list their home at the price that a Realtor came up with in their Comparative Market Assessment (CMA) -or- From the Sales comps of other Listed/Sold homes in their neighborhood.
Meaning: When dealing with the Psychology of a Buyer; Most FSBO’s forget that when they list their homes on their own, they list their homes at the Market Price compared to other Listed homes around them. What they fail to recognize is that those homes have a “Value” added to them, and that Value is the Realtors Commission; which is reflected in the home comparables. Most Appraisers will tell you, when asked, that the market price on a home that they are appraising when compared to homes in your market are induced/encompassing of that Value- The Realtor fees. The appraiser will ask when doing an appraisal on your home, if there was a Realtor involved or not. In short- Buyers are not stupid. If your home is not listed with a Realtor; The Buyers feel that they should get a better Sales price on the home since the Seller is not paying out that fee. The Buyers feel that the sellers are cutting out the important role of the Realtor so therefore requests there to be a “Discount” on the price of the FSBO home. I.E. If the comparables suggest a a sale price of $195,000 for your home, you need to adjust your sales price by the commission amount of listed homes in your area in order to have the best chance selling on your home on your own.
Outcome: Majority of FSBO (86% according to the NAR and HUD) end up listing their homes with a Real Estate Agent or Realtor. The reasons span from Marketing of the home, Getting a higher Sale Price, Sellers don’t want to conduct Open Houses anymore, but the most important #1 Reason is: Sellers get fed up with “How Long it takes for the amount of work involved to generate an actual Lead/Sale”. National Statistics of FSBO sites and clients state that most of the buyers that come through their home are NOT PRE-QUALIFIED to buy their home! In essence waisting the FSBO’s time! With Realtors- We only work with Buyers who have been through this process before we schedule any showings for them. Hence- Sellers who are have their homes listed get only pre-qualified, Ready and Able buyers coming through their homes on private showings.
Issue: When FSBO’s get to that point of wanting to list their homes after they have tried and tried to sell on their own but now have given up, what they fail to understand is that they have already done a detriment and a disservice to themselves. The house is now viewed as having issues, something is wrong with it, or my favorite- One of the people who they showed their home to, who is now working with a Realtor, is only willing to pay the sellers what they had previously listed their home For Sale as a FSBO.
In closing- If you are a FSBO looking to sell your home, your sales price has to be adjusted for not paying the Realtor fees in order for the Buyers to see that they too, are receiving a discount. I am one who will tell you that if you can sell on your own then do it but make the corrections needed to facilitate the sale. The FSBO client acting as a buyer would not go to a Second Hand Car Lot, Second hand Furniture store, or Clothing store and expect to pay full MSRP that the High End Big Box stores charge because you acting as the buyer, Expects the Discount! This is the Buyers mentality in a nut shell.
Hope this helps shed some light on this very popular questions when regarding FSBO’s and Sales Prices.
Derrick Ogert | Broker-Owner | Trego Realty | Office: 319.432.7122 | Direct: 319-431-2578 | Derrick@TregoRealty.com | www.TregoRealty.com Licensed Real Estate Broker in Iowa
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