Many of us know someone who knows a person who has tried to sell their home without the help of a Realtor. Heck, why wouldn’t you give it a shot… after all, Realtors are so expensive! Seems logical, right? Well… maybe not. Without the help of a Realtor, you very well may end up leaving money on the table, or worse, not selling at all. When I first started in this business, I used to canvas neighborhoods seeking out homes that were “For Sale By Owner.” I didn’t have any other business and it was a great opportunity to introduce myself and pass out my card. My hope was that they liked me enough to pay me a commission if I had a buyer for their home. I also hated every stinking minute of it. It wasn’t because I was a closet introvert or had to force conversation with someone I didn’t know. It was difficult for me because I felt like I was intruding on someone in their sacred space and asking them to pay for a service they clearly didn’t want. As I knocked on more and more doors, I quickly realized that most For Sale By Owners (FSBOs) weren’t opposed to working with agents, they just figured, “How hard can it be?” So they gave it shot. I sold a lot of FSBOs that year. In most cases I ended up representing them as the listing agent, when they got tired of pounding the pavement to find a buyer. They also learned quickly that in communities such as ours, the networking among the Realtors is invaluable.
I have written before about our weekly MLS meetings, the scores of calls throughout the years from agents searching for a specific kind of house for their clients, etc. More recently, I have gained a better understanding of the perception that buyers have when coming across FSBOs, and it’s quite interesting. Quite simply put, they aren’t comfortable. Having representation as a home buyer costs nothing for the buyer, so why wouldn’t they want an agent involved? The process of selling and/or buying a home is complicated. When I started in the business, the purchase contract was five pages. Now it’s ten, and that doesn’t include the various addenda required for different types of property, the sellers disclosures, and the list goes on. There are so many laws and other safety nets in place when it comes to buying or selling a home, buyers are increasingly less comfortable relying on the internet, cheat sheets or the sellers to ensure their best interests are being protected.
In the last year, I can count numerous times where someone either attempted to sell by owner, or expressed an interest in it in order to save a commission, reduced their price accordingly and never actually succeeded in selling. I can also think of an alarming number of times where the sellers demonstrated what I would refer to as “situational ethics” with regard to their interpretation of their responsibilities pertaining to disclosures. Scary! When we outlined for them that they had an obligation to disclose what they knew about the condition of their home, they looked at us like we were crazy and as though a different set of rules applies when you are selling by owner. I wonder why buyers are afraid? Now, I can’t speak on behalf of every seller. Certainly there are examples of sellers who succeeded in getting their homes sold and did so with the utmost level of integrity, but in talking with quite a few buyers, I have gained a new appreciation for some of the reason FSBO isn’t as successful as you might expect, especially when a market is as hot as ours is.
There is so much more involved than just getting your home on the internet. As values increase faster than the market statistics can demonstrate, having open lines of communication with appraisers, lenders, and other brokers is invaluable. Period. One thing I have also noticed in the last couple of years with FSBO is consumers take note. We are a small town, so directional signs, Open House balloons, etc. rarely go unnoticed. A lot of what is driving our market is supply and demand. Prospective buyers know real estate values, after all they have resources available to them like Zillow, Trulia, Jackson County Front Counter, and the list goes on. Each gives them a snapshot of data related to market value, days on market, etc. When a home hits the MLS, we compare it to fish being added to a pond. All the anglers (buyers) are sitting along the banks waiting for the new fish (homes) to arrive, and if one looks good, they are going to snag it. If you have been FSBO, any serious home buyer has noticed you, so when you do ultimately list with an agent, in some ways your hand is already tilted. You were likely listed at a lower price, given many sellers raise their listing price to offset commissions, and you aren’t considered “new” to the market. You’ve been for sale for a while and nobody jumped at the opportunity to snag you. Buyers know this and they ask themselves… what’s wrong with this house if nobody else has bought it? If you listed in the MLS with a flat rate brokerage, your cumulative days on market will be displayed showing that you aren’t actually a new listing. Even if you weren’t in the MLS, buyers likely saw the Craigslist ad or other online posting and they know you have been at it for awhile.
In my opinion, I think some sellers rely too heavily on databases of information instead of tapping into their local resources and consulting with a Realtor or two. This is what we do, day in and day out. Values are fluctuating week to week and sometimes by 10%. It seems like a huge gamble to me and an opportunity to unnecessarily leave money on the table. In case you haven’t heard, the owner of the website, ForSaleByOwner.com recently sold his house. After being unsuccessful for six months as a For Sale By Owner, he consulted with an agent, signed a listing at 6% and sold his home for $150,000 more than he was advertising when he was trying to sell it himself. Oh snap!
The point of this article isn’t to silently say, “Neener, neener,” but rather to encourage you to leave the heavy lifting up to us. There are awesome agents in this community, so interview them, see what they have to offer and who might be the best fit for you. Then, choose one and get your home on the market and SOLD! It’s a fantastic time to sell your place. Ok, I’m getting off my soapbox. :)
DeAnna Sickler and Dyan Lane
John L. Scott Real Estate
320 E. Main Street
Ashland OR 97520
Check out their website here