Meir Aloni For Sale By Owner (FSBO)

1. Do you really know what your property is worth in today's market? Will you price it too high and discourage potential buyers or too low and lose part of your equity?

Real estate prices are never fixed. The same home can be worth thousands more or less within the same month in volatile markets. What the homeowner paid originally for the home is not relevant to the list price, only what the current market will bear. The original price is only important to determine the equity position, if the homeowner can in fact afford to sell the home.

Nobody, even the most bargain hunting buyer wants to work with an unreasonable seller and the quickest tip-off that a seller is unreasonable is pricing the home too high. The opposite can happen, too. Sometimes for a quick sale, or because the home was purchased so long ago that today's prices seem extravagant, a homeowner will price a home too low. A good agent can evaluate the seller's position and find other ways to create the conditions for a quick sale besides leaving equity on the table.

2. Can you show other houses as comparables?

Do you have a comparable analysis of the area? Even if you have printed comparables, the information isn't enough. There is always pertinent information missing from CMA's. Having a comparable analysis of homes in the area isn't enough. The buyer will want to see other homes in the area in order to properly evaluate your home. If you aren't paying an agent commission, who is going to show the homes to the buyer? And if the buyer has an agent showing them homes, how do you know how yours is comparing?

3. Are you available to prospects on a full time basis until the house is sold?

Most homeowners work at another profession and find it impossible to show the home except on weekends or after dark. Many buyers can't or won't have the patience to wait to see a home - they are too afraid someone else will come in and write a contract. They want to look at homes they can view and write contracts on without waiting.

And where does the homeowner obtain potential buyers? Can you prospect for homebuyers during the day? If you are going to sell your home you will need to. Only 50% of buyers use the newspaper to buy a home - how can you be sure your buyer saw your ad? Over 82% of buyers use a Realtor. Can you network with real estate agents to find a buyer for your home? You will have to cold call every Realtor in your area to tell them about your home, a time consuming task unless you are an agent and have the home listed. That is the purpose of the MLS - it is the Realtor's message board on what homes are for sale.

Can you leave work to show a home to a potential buyer? Are you available to stop what you are doing to take calls about your property? Will your boss understand that you have another full-time job - selling your home? If the answer to these questions is no, you need an agent who does work full-time on your behalf to market your home and bring it to closing.

Do you want to host an open house every weekend until your home is sold? 39% of homebuyers attend open houses.

You will want to put a sign in the yard because 38% of buyers look at homes with yard signs.

And what about online services? Few online companies carry FSBO listings - but 18% of home buyers look for homes on the Internet. Where do they go? Where they can look at an abundance of homes - Realtor.com and other sites with hundreds of thousands of listings plus search criteria to make finding a home easy. Do you have that at your disposal?

4. Can you answer objections and criticism without getting emotionally involved and upset?

The chances of finding a buyer with the same tastes and appreciation for your home as you have are slim to none. You can bet that the first words out of a buyer's mouth is what they would change if the house were theirs. That wood-paneling in the den that you think is so handsome may strike a Gen-X home buyer as dark and outdated-looking. Flooring, paint colors and decorative accents you have chosen may provoke titters. Your dog is your best friend, but can you be objective about the way the carpet may smell because of his accidents, fur, and muddy paws? And willing to do something about it? What about those numerous small repairs you always meant to do? The buyer will find the cabinet door that sticks, the rattling lock, the missing window screen and the broken tile in the bathroom quicker than you can say Jack Rabbit.

And the buyer will draw every one of these items to your attention, criticizing and discounting the home you love before your very eyes. Can you keep smiling?

The Realtor can absorb a lot of the electrical charge between a buyer and a seller. The seller will always see his/her home in its most favorable, and even unrealistic, light. A buyer typically will judge flaws more harshly than a seller, leaving plenty of room for a gap to widen in negotiations. The seller wants the most money for the home, and the buyer wants the most home for the money. A Realtor can get the two to meet in the middle.

5. Can you call a prospect back without placing yourself in a poor bargaining position?

Do you know what to say, what not to say, and what questions to ask? How do you know this is a qualified buyer and not someone who simply wants to gain entry to your home? How much should you reveal? Do you know how to qualify a buyer? How to negotiate?

6. Are you familiar with all the financing possibilities to guarantee the sale? Do you have the sources of financing?

In a perfect world, the buyer will come to table with cash in hand for the house. But the reality is that the buyer will require some kind of financing. Do you know where to send them? Do you know whether to send them to a direct lender or a mortgage broker and why? What kind of credit do they have? Can they afford the home? How can you prevent tying up your home in a contract with someone who can't afford the home, wasting precious marketing time and perhaps losing the interest of other more qualified buyers?

7. Do you really have time to handle all the details?

The seller must handle repairs, the presentation of the home, paperwork, negotiations, other interested buyers, plus shopping for a home and moving preparations all at the same time.

Selling a home involves a great deal of preparation and evaluation and that is just to arrive at a marketing plan. Sometimes this can involve making repairs on the home, staging the home, preparing for an open house, and even choosing the right moment to place the home on the market. Then you must handle advertising to attract the buyer. What works - what doesn't work?

The seller must become expert in real estate contracts and their legal responsibilities. Do you know your liabilities? Are you familiar with disclosure? Are you confident that you know enough about the real estate transaction to follow through without professional advice?

Then when a buyer is interested, the seller may have to show the home multiple times before a contract is signed. In the meanwhile, numerous discussions will ensue which change the negotiations constantly. Do you know how to move a sale along when it is stalled in negotiations? Do you know when to walk away?

Since the buyer and seller are presumably saving money on a Realtor's commission, the seller will have to perform the Realtor's job and provide the services a Realtor would provide for both the buyer and seller. Is that what you want to do?

Travis says, "It is tougher than you think to do it yourself."

And as the final point, Travis quotes an industry survey that houses sold by agents bring an average of 91/2% more than similar owner sold homes, more than paying for the commission and with a little left over.

Travis states the obvious - owners who use an agent net more money, more time and more piece of mind.

Written by Blanche Evans
October 14, 1998

   Whether it's piddling away money on the lottery or chasing rainbows in the latest revival of pyramid clubs, the American public seems ever willing to pursue the something-for-almost-nothing dream.
   Home sellers are no exception. A small, but noteworthy, number of them continue to opt for the "FSBO" (for sale by owner) route in marketing their homes.
   Basic question: Can a home be sold without the help of a competent, full-service Realtor? Honest answer: Of course it can, but does it make economic sense to do it that way?
   Seldom, indeed - and I saw no hard evidence to the contrary during more than 50 years in the residential brokerage field.
   Before you dismiss my opinion as merely the self-serving view of an industry loyalist, please read on; if you're ever going to sell a home, you'll be glad you did.
   I'm (safely) assuming that, as a seller, you will be interested in realizing the highest price obtainable. (If the proceeds don't matter, any old marketing plan will do, including an absolute auction or accepting the first cash offer of a speculator.)
   Realizing that the highest obtainable price is possible only - repeat, only - if you can expose the property to the best market, in terms of size and quality, and if you have the proficiency to identify, satisfy and obtain a commitment from the best-qualified buyer.
   Let's first examine quantity. Unless your home comes to the attention of the largest possible pool of potential buyers, you can't be even marginally sure that the best offer you received represents the best price obtainable.
   Consider the facts: Although a Realtor may spend thousands of dollars each month on advertising and may have hundreds of yard signs dotting the landscape, only about 20 percent of actual buyers will be attracted by these media.
   So much for doing it yourself: How many of that 20% will be attracted by your single yard sign and occasional ad?
   So much, too, for the fringe marketers who will sell you a sign, help you write ads and tell you how to generate a few prospects.
   If you want to realize that "best price obtainable," you must challenge the whole market, not just a small slice of it.
   How to reach the other 80%? That's where the quality of the market comes in.
In a full-service real estate firm; about 30% of its buyers are brought to the table by cooperating brokers.
   It is axiomatic that the best-qualified buyers are availing themselves of the (usually) free services offered by real estate professionals. Why should they track down ads and signs when a competent practitioner will sift through the available inventory and match their dreams with reality?
   The professionals who attract those best buyers play for pay - and the good ones are worth every one of the six figures in their incomes.
   The only motive, then, that could possibly lure buyers to a for-sale-by-owner home would be the hope of saving the same commission that the FSBO is trying to save - a bit of logic that seems to escape many do-it-yourselfers.

   Thus, both the optimum quantity and quality of your potential pool of buyers will be available only through the help of competent professionals, who also supply the third necessary ingredient - proficiency.
   It takes skill, experience and objectivity to find, qualify, service and sell a prospective homebuyer in an arena where dozens, if not hundreds, of homes, sellers and agents are vying for the same prospects.
   It is naive to hope that rank amateurs or cut-rate counselors could effectively compete with full-time experts whose economic lives depend on delivering satisfactory service to buyers and sellers on a daily basis.
   There's no law against being your own doctor or lawyer, or hiring a partially qualified person in either profession, but it is foolish to do so.
   A bargain, either in goods or services, is measured not so much by what you pay as what you get in return.
   In real estate, if you pay less, you settle for inferior marketing. If you settle for inferior marketing, the cost in net proceeds will far exceed the commission dollars you thought you were saving.
   Only exposing your home to the best market, in terms of quantity and quality, coupled with proficient marketing services, can put that highest obtainable price in your pocket or purse.
   Bottom line: One way or another, when a home is sold, someone ALWAYS pays a commission!

Joe Klock, Sr., CRB, CRS is a syndicated columnist and freelance writer in Key Largo, Florida. For more "Klockwork," visit www.joeklock.com.

The KlockWorks, Inc., 606 Island Drive, Key Largo, FL 33037-4808
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