Why do most For Sale by Owners FSBO Fail?
Understanding failures may help home sellers seek higher probability of success.
Failure to price correctly - It is usually because of the bottom-line price that most Sellers decide to sell their homes For Sale By Owner. Here in Texas, we are in a non-disclosure state, which means the sold prices of homes are not publicly published. We feel that it is nobody's business how much someone pays for his/ her property. With that said, it makes For Sale By Owner sellers find it challenging to find out how much his/ her neighbor sells his/her house for.
Sites as such Realtor.com, Trulia and Zillow may give a For Sale By Owner a sense of how his/her neighbor is pricing the property, but in the real estate business, we know more people (including Realtors) are more positive about pricing their Frisco TX home than what it really can bring.
Because Texas is a non-disclosure state, Zillow with its Zestimates are not accurate. Zillow comes up with a mathematical formula based on what it thinks the owner has a mortgage and other external factors to guess its market value. What if you were a homeowner whose home had foundation issues, Zillow would never be able to figure how much "blemish" ie. price adjustments to take on the property. What if your home backs to a private creek, or your home has a boat dock that leads you into the private lake? Zillow would not be accurate in these examples. In addition, as a regular homeowner that does not work with buyers often, how do you know how much "premium" today's Frisco TX buyers would pay for such amenities?
Failure to market effectively - Real marketing dollars go into marketing the property to give it its maximum exposure. Maximum exposure brings in traffic and showings. With enough showings, there should be enough serious interests assuming you priced your Frisco TX home correctly.
Some For Sale By Owners may be more successful than others simply because of location. If it is located on a busy street where many people constantly drive by, may see that your Frisco TX home is for sale. At the same time, a home located on a busy street may not be highly desirable. The traffic noise and the safety issue of young children playing in the front yard are real factors Frisco TX home buyers consider when deciding to buy a property.
Many home sellers are also unaware of the latest tools in home marketing technology. Many For Sale By Owners still advertise in the newspapers. It costs over $300 per week to advertise a property for sale on the Dallas Morning News. It would easily costs over $1,000 just to market a property for sale in 30 days. Heavy marketing is usually done upfront (60 days) to bring in the maximum number of showings.
Case in point - A successful real estate agent turned trainer tried to sell her home recently. After all, she was very successful in the real estate business. It would be silly to not sell the home herself. She has an active real estate license, but that's about it. She also sold homes successfully in the past utilizing the skills of the day. She paid over $700 in newspaper ads, with still no interests. She thought to herself, "The real estate market must be bad. There are no people looking at houses". So, she thought to herself, maybe she should do a price reduction and re-advertise her new price for the next 2 weeks. Still no takers. She did another price reduction. By now, she was frustrated in selling her home herself. Plus not having any showings while still needing to keep her home in top notch condition were just not fun. She decided to call her Real Estate agent friend to list with her. Not only did she sold her home 2 weeks later, they relisted it back to the original price she first put it on the market. This lesson taught her with the right market exposure and correct pricing, any home sells.
There are also Flat Fee listing service that For Sale By Owners can put their Frisco TX home for sale on the MLS. In Texas, a Real Estate Brokerage have a minimum level of service a Broker must provide to you as a client. There is no policy simply to list the home on the MLS.
Failure to recognize that a real estate transaction goes beyond bottom line numbers - How much you walk away from the transaction is highly important in the home selling process. Many sellers may decide to sell (or not) simply based on this number. However, in a real estate transaction, there are just as important factors to consider such as contingencies that lead up to closing (buyer financing, property approval, buyer's sale of other property, HOA and title commitment contingencies and possession of property). Although even the best Realtor(R) cannot guarantee a bullet-proof transaction, one with more expertise and experience can see through some potential setbacks that most Sellers may not recognize upfront. When an offer comes in, the battle is only half won. How you take your transaction from start to finish depends many highly trained skills that most Sellers do not recognize.
The Miranda warning, You have the right to remain silent. Anything you say can and will be used against you in the court of law - used by police officers against suspects applies in Real Estate too. As real estate professionals (the good ones) are trained to read between the lines about what you say. As a regular home seller without much experience, more often times, you will volunteer information even without you realizing it. In real estate, he who has more knowledge has power.
Business as usual? Not anymore.
With all that being said, can a For Sale By Owner sell his/her home successful? Yes, for sure. There are higher success if you price a home correctly, market it effectively and watch the transaction beyond the bottom line numbers. The National Association of Realtors(R) NAR said about 14% of For Sale By Owners are successful in selling their home and over 80% of these sellers who are not successful eventually list with a real estate brokerage.
Other Related Frisco TX Home Selling Articles:
- Price Positioning Your Home for the Greatest Success of a Sale
- How to Prepare Your Home for Sale when First Impression Counts
- Size of the Brokerage Firm Doesn't Matter in Home Selling
- Who Needs a Seller's Disclosure
- What Every Seller Needs To Know about Selling Real Estate in These Days
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Copyright © 2010 by Loreena Yeo (3:16 team REALTY)
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