FSBOs (Homes for sale by owner) aren’t just growing in popularity in the States. Turns out, giving power back to the buyer is becoming a global trend. Take a look at these recent articles, all showcasing dissatisfaction with the current real estate models:

NEW ZEALAND

“The real estate industry cannot afford to insist on the traditional model of selling property, an academic and former real estate agent says.

“”Participants in the market are largely caught within the system and … in many cases people cannot see value for money.””

(from The New Zealand Herald, 2/27/08)

THE U.K.

“[One particular] couple paid £398 in fees to have the flat listed online at Hatched.co.uk - a sum that covered photographs, floor plans and ’shuffling the paperwork’, but otherwise the couple handled the sale themselves. ‘We had three local estate agents around and, frankly, nothing convinced me that they were going to be worth us paying £4,000 commission,’ says Mat. ‘Anyway, it’s hardly rocket science. The property programmes tell you how to make your home presentable. We didn’t go as far as having bread baking in the oven or coffee brewing in the kitchen - we didn’t have to. We sold at the right price in two weeks.’”

(from The Observer, 2/24/08)

KENYA

“Selling on your own — while potentially a hassle — could save you roughly five per cent in broker fees. This varies, of course. For hard-to-sell properties, the savings could be as high as seven per cent, but in highly competitive markets (where brokers are cutting their commissions), the savings may be lower.”

The article goes on to suggest these tips for selling a property without an agent: Price properly, Cast a wide advertising net, and Do your research on making and closing the deal.

(from The Standard, 2/28/08)

BACK HERE IN THE U.S.

“When it takes more hours to become a cosmetologist than a real estate agent you know there is something seriously wrong with an industry,” says Stefan Swanepoel, author of the new 170-page real estate report. “It is unbelievable to think that the standard required to become a licensed real estate agent is between 30-120 hours whereas it takes about 1,200 hours to learn how to cut hair and do nails,” he says.

(from TransWorld News, 2/25/08)

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Tags: for sale by owner, FSBO, real estate, rel estate sales

I recently came across an article that put something so well and so clearly that I really don’t think I could improve upon it. Everyone interested in real estate investing would do well to check it out.

In “Why Do You Still Need an Agent to Sell Your Home?” author Douglas Gantenbein makes an excellent case for the thing I am most passionate about: homeowners getting the power back in their real estate transactions (i.e., selling their own homes).

Written all the way back in 2004, this article cited the then-statistic that “Americans will spend about $1.14 trillion buying 6 million homes this year-both [setting] records.” And of that $1.14 trillion, Gantenbein writes, an enormous chunk would go to realtors. Is this fair?

Here are some highlights from the article:

1. Realtor work doesn’t equate with realtor commission.

   “And what do Americans receive in exchange for that commission, which can total up to $24,000 on a $400,000 home? In many cases, not much. A realtor’s license can be had after as little as 50 or 60 hours of training (the person who cuts your hair probably has 1,000 hours or more).”

2. Realtors seldom work in your best interest.

I was flipping through Freakonomics recently and remembered this little anecdote from one of the authors’ real experience:

“K. wanted to buy a house that was listed at $469,000. He was prepared to offer $450,000 but he first called the seller’s agent and asked her to name the lowest price that she thought the homeowner might accept. The agent promptly scolded K. ‘You ought to be ashamed of yourself,’ she said. ‘That is clearly a violation of real-estate ethics.’

K. apologized. The conversation turned to other, more mundane things. After ten minutes, as the conversation was ending, the agent told K., ‘Let me say one last thing. My client is willing to sell the house for a lot less than you think.’

Based on this conversation, K. then offered $425,000 for the house instead of the $450,000 he had planned to offer. In the end, the seller accepted $430,000. Thanks to his own agent’s intervention, the seller lost at least $20,000. The agent, meanwhile, only lost $300-a small price to pay to ensure that she would quickly and easily lock up the sale, which netted her a commission of $6,450.

So a big part of the real-estate agent’s job, it would seem, is to persuade the homeowner to sell for less than he would like while at the same time letting the homeowner know that a house can be bought for less than its listing price.”

3. The NAR is an exclusive group that doesn’t want to give up dominance.

“Overall, the NAR has ensured that nearly all residential real-estate transactions still are conducted between two agents in cahoots. And they’re largely responsible for keeping commissions close to that 6 percent level when any normal law of competition would suggest they’d be lower.”

4. Therefore, FSBO has a lot to offer, in my opinion.

Using a quality FSBO company like Buy Owner puts the power back in the hands of the investor. It’s definitely a smart decision for savvy investors.

Tags: by owner, for sale by owner, FSBO, home, house, real estate, real estate agent, realtor, sell real estate

If you’re selling your home by owner, you’re probably very familiar with all the reasons for doing so: no commissions, more control, less stress. Obviously the real bottom line is simple: more money for you.

So let’s just assume that when you’re selling by owner, it means that you want to make/save as much money as possible. Following that line of thought, you might not see any reason for using a FSBO company, one of those help-you-sell types that you can purchase marketing through. You might be perfectly content to stick a sign in the front yard and wait.

Well, in today’s buyers’ market, wait you will.

Here’s my solution: use a FSBO company.

You may be thinking, doesn’t this contradict the whole point of selling on your own? If I use a company, shouldn’t I just use a realtor? Well, no. FSBO companies counteract the primary problem of selling by yourself: they bring you buyers and create professional advertising.

If you decide tomorrow to sell your house and you buy a red and white sign at the hardware store and put it in the yard, only the people who drive by your home will know it’s for sale. This is a start, and it’s good, but you want to cast your net a little wider. You want to reach as many people as possible so you can find THE buyer—the one who’s going to pay you what your home is worth, in the shortest amount of time.

FSBO companies usually offer advertisements with their websites, magazines or other marketing tools. They build their business around reaching consumers and bringing them to your property. This is very, very important.

Plus, you’re still saving thousands of dollars: compared to a 6% commission, a one-time fee for advertising/buyer-gathering is always a better deal! Personally, I’ve been very satisfied with Buy Owner, after using several other companies. BO is the only company that left me with no complaints. Do some research and determine which company’s best for you. (Ask me about any one of them! Odds are, I know about it, if I haven’t used it myself!)

Selling a property is important—so important, in fact, that you want to do it right. Consider a FSBO company. You’ll be glad you did.

Tags: by owner, for sale by owner, FSBO, selling FSBO

No matter how you’re selling a home–whether it’s through the cost of a realtor, by auction or using my preferred method of selling “for sale by owner”–your #1 goal is getting the property seen. If no one sees a home, no one will make an offer on a home.

So how can you get your property publicized?

1. Word of mouth: Tell everyone you know that you’re selling. Encourage them to pass on the info—if you have homemade marketing materials, use them.

2. Post everywhere: Leave information about your home on grocery store bulletin boards, at your company postings, at the library, in the school district, you name it!
3. Market it well: Be thinking about the absolutely best way to make your property stand out.
   In my opinion, your best bet is to combine your efforts with a FSBO Company. There are many established real estate marketing companies out there. I’ve found one to be most helpful, and I found it by trial and error. A good marketing real estate company (i.e., one worth paying money to) should be able to help you with the next steps:

4. Create a brochure/flyer: You want something professional-looking, if at all possible. Think good design and highlighted features.
5. Use professional photographs: Taken with the best lighting, maximizing the look of space and style, the photos should show your home at its best.
6. Virtual tours: These are becoming more and more popular—so much so, in fact, that you really need them. Especially today with so many people relocating and transferring, potential buyers may be out of state or even out of the country. You want them to be able to learn about your home anywhere.
7. Focus on features: Your advertising must highlight the positive aspects of your home. You want to make it easy for potential buyers to see why they should be interested.
8. Overall service: If you are going to go with a FSBO company, it should provide service to assist you with the overall process.

Tags: FSBO, marketing real estate, selling by owner, ways to sell a home

The beauty of the internet is its ability to spread information quickly and democratically. This also applies to the tired real estate market, where an increase in FSBO sales has saved it from complete stagnancy. Potential sellers are more likely to try selling without the burden of an agent’s commission, and sellers are more likely to browse from home than they are to proactively search in the real world. In short, FSBO and the internet help turn half-hearted buyers and sellers into confident and accomplished ones.

While there is yet to be a study done on how FSBOs have kept real estate from going into a complete sinkhole, it is clear that the proportion of FSBO transactions estimated in this article suggests that FSBOs like BuyOwner.com are going to be around well after the market adjusts itself, proving that accessible, visual data and the elimination of the middle men won’t only take a chunk of the market, but the whole pie of real estate transactions. Accessibility means increased activity in a tired market.

On a brighter note, Citigroup Investment Research has surged upon the market, investing in real estate to take advantage of the “sector weakness:”

“While we don’t expect any of the homebuilders to move much lower over the near term, we expect…those with the strongest balance sheets to benefit most from any bounce - much as they did coming out of the 1990 trough,” Stephen Kim notes in www.financialtimes.com.

Now that the most formidable buyers are reentering the market, a turn toward growth is in the short-term future. And FSBOs will lead the way for homeowners on every level of the market.

Tags: FSBO, real estate

Your favorite farmer’s market. The blanket you bought at the craft show. The discount you found by going through the company directly. What do these things have in common? No middle men.

Today, middle men are everywhere. Some are good: the grocery store, the post office, the restaurant. But some are purely optional; in fact, I’d say they’re largely unnecessary. Consider these two examples of industries that make their money on connecting:

Middle Man #1: Travel Agent
I don’t know about you, but I have the ability to research online, call hotels, ask around for discounts, etc. Last month, I visited a friend on the East Coast and booked my plane ticket and accommodations through an online provider—I think it was Travelocity or Expedia. This allowed me to save the most money, at the most benefit to myself. Imagine if I’d used a travel agent: less control, more money lost.

Middle Man #2: Staffing Agency
How did you find your current job? Did you go through a head-hunting firm? You might’ve, and that’s fine. But you also might’ve been like thousands of other job-hunters who didn’t want to get paid less than the company could afford by inserting a middle man. You might’ve looked online at places like Careerbuilder and Monster and Craigslist and applied, interviewed and landed your position.

What each of these agencies has in common with a real estate agent is this: they are middle men. They find hotels, and they find travelers; they find jobs, and they find job-seekers. Or, in real estate, they find sellers, and they find buyers (imagine if the travel agency or the staffing firm similarly took a solid 6% of the sale, too!!). In return, they take a BIG chunk of the deal home with them. No tangible product provided—just their “connections.”

For a long time, real estate companies have been telling us that we need them, that we have to have a real estate agent in order to find the home or to sell the home. In reality though, all you need is a buyer and a seller. An agent is ONE way to find a buyer, not the only way and, in my opinion, certainly not the best. Using an agent means less money for you, and that’s never a good alternative.

If I take the analogy one step further, it’s a perfect illustration of why companies like Buy Owner are so helpful. They’re the Travelocity or the Careerbuilder of real estate. Much less cost and much more control for you.

Before hiring a realtor to list your home, consider trying your hand at finding buyers on your own, eliminating the middle man. You are fully qualified.

Tags: FSBO, real estate agent, realtor