Property ManagementHow to Arm yourself: FSBO Numbers Too High for Comfort
The tight market in many areas is giving amateurs the impression that they can market and sell their homes more effectively and more cheaply than they can through a REALTOR.
Although the National Association of REALTORS says the number of people marketing their own homes is about the same as usual, 13%, the trend is still there. One thing clouding the figures could be the proliferation of discount brokers which in effect collect a fee for putting the seller"s home on the MLS, but the seller is basically on their own to sell the home.
If you are working a "FSBO," either to get them to list with you or in marketing a FSBO home to a buyer, reprint this and save copies for when you need ammunition.
The following editorial is reprinted with permission from Joe Klock:
SELLING YOUR HOME: A fullcourse approach to selling
Whether it"s Ed McMahon"s smiling offer of multimillions for doing nothing
or the latest generation of pyramid clubs, the American public seems
everwilling to pursue the something for nothing dream.
Home sellers are no exception. A few have begun to experiment with
bargain basement brokerage schemes, ranging from selling their own homes to
employing the fragmented services of "FSBO (for sale by owner) helpers," often
just purveyors of advertising and yard signs.
Can a home be sold without the help of a competent, full-service Realtor? Of
course it can.
Does it make economic sense to do it that way? Seldom, if ever, and I
saw no hard evidence to the contrary during my more than 40 active years in
residential brokerage.
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 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 cash offer of a
speculator.)
TO GET TOP PRICE
Realizing that the highest obtainable price is possible only if you can expose the property to the best market, in terms of size and quality, and 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 reasonably sure that
the best offer received is the best price obtainable.
Consider the facts: Although a Realtor may spend thousands of dollars each
month on classified 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 percent will be
attracted by your single yard sign and occasional ad?
So much, too, for the marginal marketers who will sell you a sign, help you
write ads and circulate a few prospects.
REACH A WIDE MARKET
Want the best price? Challenge the whole market, not just a small slice.
How to reach the other 80 percent? That"s where the quality of the market
comes in.
In a full-service real estate firm, about 30 percent of its buyers are
brought to the table by associates of cooperating brokers.
It is axiomatic that the best qualified buyers are availing themselves of
the 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 bricks and mortar?
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-your-selfers.
FINDING QUALIFIED BUYERS
Just as challenging a larger market must produce a higher price, so only
reaching the highest quality market can uncover that one best buyer for your
home.
Your ability to reach fully half of the available market (signs, ads and
cobrokers) depends on a range of services that you can"t provide for
yourself and can"t expect to obtain for free.
The other half of those buyers become owners through the activities of the
Realtor firm and its associates, including repeat business, personal and
out of town referrals, corporate transferee services and, above all, perpetual
prospecting.
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 home buyer in an arena where dozens, if not hundreds, of
homes, sellers and agents are vying for the same prospects.
AMATEURS vs. PROFESSIONALS
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.
The bottom line is this: 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 quality and
quality, coupled with proficient marketing services, can put that highest obtainable
price in your pocket or purse.
This editorial was written by Realtor Joseph P. Klock, CRB, CRS who retired as president of Coldwell Banker/S.Florida in 1986. He served nationally as Dean of Coldwell Banker University. Klock, who has been active in real estate for 43 years, is past president of the Real Estate Brokerage Managers Council, Realtors National Marketing Institute and a member of the Education Committee, National Association of Realtors. Joe has logged over two million miles on the lecture circuit
and has written numerous articles and audio-visual products on real estate marketing. He may be reached at (305) 451-0079 or joeklock@aol.com or at his web site: http://www.joeklock.com .