What FSBO seller need to know/master in order to sell?

5 Replies

Hi, I am putting together a web/telephone discussion on how to sell without a listing agent. Practising active realtors will not be invited. Only people who sold before or people that want to do it.  What are the questions/topics would be of most interest? After all, we will have like an hour and a half at most. Your thoughts and recommendations are greatly appreciated. 

@Jacob Bindler Skills a FSBO needs to master:

- A thorough understanding of the market.  Especially pricing. Price too high and you'll eventually sell for less - after a painful series of price reductions and far too days on the market.

- That means knowing how to run comps.  Knowing which kinds of properties can be used as comps and which can't - like comping a ranch with a colonial.  

- Creative writing.  Highlighting the positives.  Working around the negatives.  But not misrepresenting anything.

- A willingness to leave money on the table.  Every study I've seen says FSBOs net less money than they would using a professional agent.    Heck, even the FOUNDER of ForSaleByOwner.com used an agent after trying his home on his own.  

http://business.time.com/2011/08/17/fsbo-com-found...

- Negotiating. Chances are you'll sell to a buyer who is represented by an agent. If a FSBO is up against me representing a buyer, I guarantee you that I'll walk all over them.

- Photography.  Crappy photos will slow down your sale.  I bring several thousand dollars worth of gear to a photo shoot - I've been a pro photographer.  Be sure to tell your FSBOs to put the toilet seat down.  And before I forget, no, your iPhone isn't the right tool for the job.

- Marketing.  Where are you going to advertise?  What is your target audience?  What's your messaging?  What's your budget?

- Settling for less.  Common sense dictates that the way to get the highest price is to expose the property to the most people.  I will expose a property to MILLIONS - and I'll do it within minutes.  Craigslist and a yard sign from staples will expose it to hundreds.  Good luck to you and the Red Sox.

- A *very* flexible schedule. What is Mr. FSBO going to do when a buyer wants to see his home at 1 PM on a Tuesday? Take an "extended lunch break"? Every time?

- Knowing how to vet a buyer.  Do you know the right questions to ask to determine if the pre-approval is good?

- Knowing how to stage a home so it looks its best.

- Knowing how to run an open house - hiding the fact that you're the owner.  Buyer's won't tell you what they think for fear of insulting you.  They'll talk to a real estate agent though.  We get the objections and we can respond to them.

- Knowing what to disclose and what not to disclose.  Fail to disclose the wrong thing and you're in some attorney's crosshairs.  Disclose too much and you'll chase off buyers.

- Knowing the carefully orchestrated steps needed to get a bidding war going - and how to handle it if you're successful.

- Knowing what demands of a buyer should be agreed to and which shouldn't. 

- Knowing how to respond to items raised in a home inspection.

- Knowing how to handle a bad appraisal.

- Knowing the correct day of the week to list a property.  Yes, there is a correct day!

- Knowing how and when to follow up with prospective buyers.

I could go on writing this for another hour, but unless a home owner is experienced in all of those things, they're going to do a job that's FAR inferior to what an experienced agent will do for them.

Yes, you can FSBO - but it will take you more time to do it and you'll do it for less money.

PS - you can do your own dental work too, but I don't recommend it.

Good list. Thank you, Charlie. Let me distill and summarise for practical purposes since the goal is not to debate what is better, but give people who WANT to try to sell on their own a bit of a bost:

  • get third-party help with pricing ( would you say it would be about $200?)
  • hire a writer ($50 ?)
  • Get a good RE attorney early on to help in negotiation, appraisal, and inspection
  • make someone to take pro pictures 

I am puzzled about the timing of the listing. do you care to expand? 

One of the more common mistakes I see fsbos make is having fair housing violations in their property descriptions.

I sold a couple FSBOs last year, but I've done it a few times listing with realtors well. I've also purchased many times solo so I don't recommend new sellers try this on their own.

I needed good comps to price properly. A ton of FSBOs ask way too much or leave a bunch on the table. Most also have no idea what the next step is if someone likes their house so good thing you are doing this.

There are a lot of disclosures. Legal description, property and title condition, lead based paint if pre 1978, square footage, etc. Some of these are state-specific, some respa federal.

Lastly off the top of my head, know if your place will be VA or FHA financable. Nothing worse than doing all the above right only to find out the appraiser fails you for improper railings and windows 4 weeks in!

Originally posted by @Steve Vaughan : A ton of FSBOs ask way too much or leave a bunch on the table. 

 The agent I was talking to the other day told me a story that was typical in his view: He was one of four brokers trying to get a listing and gave the owners his view on the price: $1.7M (it is a bit pricey out here). The owners eventually went with an agent listing the place for $3.8m. 18 months later the place is sold for $1.8M by the third realtor working the contract. All I am saying is that FSBOs are not along in mispricing the properties. Different reasons, but the result is just the same.  

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