10 Common FSBO Mistakes
1. Concealing the property’s address
Buyers often drive by dozens of homes before coming up with a list of those they want to visit. If they can’t find your home, it may never get onto their short list.
2. Having an empty flyer box
Flyers lure buyers into your home, and help them remember its best features. They also keep buyers’ agents honest. In a slow market, some agents may be tempted to steer buyers towards their own listings—even though doing so violates the Realtor® code of ethics and some state laws. For example, an agent might discourage buyers from looking at homes listed by owners or other agents by saying that these homes have “problems” or that they’re overpriced. It’s harder for agents to do this if their clients have easy access to flyers.
3. Not getting on the Multiple Listing Service (MLS)
For a flat fee of just a few hundred dollars (with no commission for the listing agent), you can get a six-month listing on the MLS, Realtor.com®, and local MLS websites. It’s hard to imagine a more cost-effective way to market your home—Realtor.com® alone gets over 6 million visitors per month. As an added bonus, getting on the MLS will likely stop the flood of phone calls from listing agents who want your business. There’s one catch, though: to get an MLS listing you have to agree to “cooperate with” (i.e., pay a commission to) any agent or broker who finds you a buyer. But you should do this anyway. If you don't cooperate, you probably won't pocket all or even most of the commission savings. Buyers who make offers without the services of a buyer's agent usually expect a price discount.
4. Setting the cooperating broker’s commission too low
Unless your home is selling for at least $1 million, offer a 2.5 or 3% commission to buyers’ agents. Many agents are hard-pressed right now, so they’re paying close attention to commissions. As a result, homes offer higher commissions have a big edge over those that don’t.
5. Making it hard for buyers to contact you
Realtor® associations make it devilishly hard for buyers to find FSBOs and to get in touch with their owners. Realtor.com®, for example, won’t allow listings to be described as FSBOs, nor will it display a FSBO seller’s contact information on its public web pages. (Note: Though flat-fee MLS brokers are required to give their own contact information on Realtor.com® and other MLS websites, good ones will divert all buyer inquiries to sellers.)
All of this is frustrating for buyers who want to find FSBO homes on their own in order to capture the cooperating brokers’ commissions for themselves.
6. Letting a real estate agent host an open house
Allowing an agent to host your open house can entitle him or her to the cooperating agent’s commission if a visitor later makes an offer. For buyers hoping to capture the cooperating broker’s commission for themselves, having an agent at an open house can be a deal-breaker.
7. Setting the asking price too high
From 1991 to 1996, the median price of a home in California fell from $200,660 to $177,270—or by about 11.6%. Smart sellers were quick to lower their prices and many got out of the falling market early. A good rule of thumb in a slow market is to visit competing properties and price yours so that it’s one of the two or three best values in your area and price range.
8. Playing leapfrog with a desperate seller
Avoid getting lured into a price war if you’re competing with a desperate seller. If you win, you may get less for your house than it’s worth. If you lose, future buyers will likely learn of your rival’s sales price and use it when appraising your home. It’s sometimes better to let a desperate seller go first.
9. Taking your home off the market for the winter
If you wait until March to put your house on the market, you may find that prices have dropped over the winter and that your home gets lost in the surge of homes that come on the market in the spring.
10. Giving up and listing with a traditional agent
Listing agents normally charge 2.5-3% of the home’s sales price for their services. That comes to $15,000 to $18,000 for a $600,000 home. If you’re having trouble selling your home, you’ll likely get more bang for your buck if you use that money to either lower your price or boost the cooperating broker’s (buyer‘s agent’s) commission. In a slow market, buyers’ agents play a much larger role than listing agents in determining which houses sell.
How to Sell Your Home in 5 Days
There Are Ways to Speed Real Estate Transactions for Sellers Who Are Looking for a Quick Turnaround
Aug. 15, 2006 — - Real estate agents say that selling a house in today's market is all about price and adequate exposure, not to mention patience.
It takes an average of eight showings to get one bid on a house. But what if you need to sell faster than that?
Listing your home on the Internet, updating the listing frequently, and making major price reductions rather than small, incremental reductions are all techniques that sellers use to sell a home quickly.
For many sellers, however, eight showings, or even eight days, is too much time.
For this group, there are means for accelerating the process.
For those looking to sell a home in the shortest possible time, "Good Morning America" contributor Barbara Corcoran, founder of the real estate company The Corcoran Group, offers tips on how to sell a home in five days:
1) Remove your listing for five days.
Touch up your ad. When your property is listed again, it will appear new to the market.
2) Price your house at 5 percent less than the last sale in your neighborhood.
Pricing is obviously critical, and when it's too high people shy away. To make sure that the pricing is below neighborhood values, you'll need to research recent sales in your area. Web sites like Zillow.com offer prices for many addresses in the United States. Just plug in the address of neighborhood homes that have recently sold, and you'll get the sale price.
3) Offer a "One Day Only" sale.
Take the same steps you might take to announce a garage or yard sale, with the only difference being that you are marketing your home. Post 100 fliers around your town, "One Day Sale, 12 Maple St. Sunday 9-5" -- much like you would for a garage sale.
Advertise the sale on www.craiglist.org -- one ad costs $25. Placing the ad in more than one category will guarantee more viewers, so list in as many as you can to get the most exposure.
As people come through to see the home, collect sealed bids on day of sale and at 5 p.m. look through and choose a winner if the bid is appropriate.
4) Offer financial incentives
Create a reason outside of the home's amenities or the neighborhood or the sale price that makes the house attractive to buyers. For example:
- Prepay house taxes for two years
- Prepay the mortgage for two years (not just the home warranty)
- Offer to pay for closing costs
- Offer broker commission bonus
5) Consider creative incentives.
If you're really desperate, you may have to take the incentives to an even higher level. Some incentives work and some don't, but everyone will talk about them so get creative and offer things like a free vacation, a new patio, or even a new car.
6) Make the right first impression.
Buyers decide whether they want your house in the first eight seconds, so it's important to make sure your home is ready to sell and ready to make a good impression on potential buyers.
To do this, pay particular attention to the most noticeable areas. The big payoffs on the outside are the front door, the shrubs, and the condition of the paint.
On the inside, you can find a big payoff by ridding the house of clutter, deodorizing, and making sure the bathroom and the kitchen are spotless.
Closing the Deal
If you're going for a quick sale, keep in mind that small reductions in price rarely speed the process along. Price reductions work if done in big steps, especially if it brings the listing below a new $50,000 or $100,000 search-engine threshold.
Keep in mind, too, that one home in three homes today are sold on the Internet.
Make sure the house you have posted has a floor plan, really good photos, and clear, positive information on your home.
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