The other day I spoke with a Franklin TN home buyer. He called to pick my brain about new construction in the area. When I asked if he had a home to sell, he replied he did but he'd be selling it without the assistance of a real estate agent. I asked why? He stated the Franklin TN housing market is so hot. Why use an agent?
According to the National Association of REALTORS® (NAR), 2007 was the peak of the housing boom. That year, 13% of all sales in America were by For Sale By Owners (FSBO). The FSBO market shifted during the economic downturn to 9%. Even though, the housing market has experienced a recovery over the last two years, FSBO sales remain at 9%.
Why are sellers willing to pay real estate professionals when buyers are lining up to bid on their homes?
Internet marketing is more complicated and expensive than it looks. While the internet has revolutionized the way people buy homes, FSBO sellers don't fully grasp what this means. They think merely having their home in the MLS will automatically get it sold. Unfortunately, only members of the local multiple listing service can market homes in the MLS so FSBO sellers are restricted from its use. Sellers can upload their own listings to Trulia and Zillow now, but it may require enhanced features to get them the exposure they desire. These enhanced features can be expensive for FSBO sellers. As a result, many don't use the internet to its full potential, if at all.
Buyers still prefer to work with a real estate agent. According to the NAR, 32% of home sales were the result of a real estate agent. If a FSBO seller is unwilling to pay a buyer's agent's commission, he may have a hard time selling his house. In Tennessee, if a seller refuses to pay a buyer's agent, the buyer would then be responsible for paying his agent the commission. Many buyers will simply pass on a FSBO house before paying their real estate agent's commission.
FSBO sellers don't prepare their homes properly for sale. In an effort to keep as much money as possible in their own pockets, FSBO sellers refuse to hire a home stager to help them get the home ready for market. They underestimate the importance of staging and making repairs prior to listing their home.
FSBO owners don't know how to market their homes. Many think putting a sign in the yard and placing a flyer box outside, will sell their house. This means only those who drive by will find it. That's not going to get sellers the necessary traffic they need to sell, especially for top dollar.
FSBO sellers risk legal action. Selling a house is a legal transaction. Tennessee requires many disclosures be completed. If a seller doesn't properly disclose a defect, there is the potential that a lawsuit could transpire.
FSBO sellers don't know how to price their home. Typically, FSBO sellers list their homes too high which later causes them to sell below market value. In 2013, FSBO sellers averaged $175K. While their real estate agent counterparts averaged $210K. That's a price reduction of 20%; way more than the typical real estate commission of 5 to 10%. Not to mention, a lot of work to the sellers.
FSBO sellers don't want to take the security risk. The recent abduction and murder of an Arkansas real estate agent is a perfect example of the risks involved in selling real estate. A greater number of FSBO sellers have recognized the potential risk of letting unqualified buyers into their home. They would rather pay real estate agents tens of thousands of dollars in commissions to keep their families safe.
When you are ready to sell your Franklin TN home, consider your options carefully. The sale of your home is likely the largest financial transaction you will ever make in your life. Is that something you really want to do without the assistance of a professional?
Why use a Franklin TN REALTOR® when the housing market is so hot? Because it's a smart thing to do.
Tammie White, REALTOR®
TW Realty Group
Benchmark Realty LLC
318 Seaboard Lane
Franklin TN 37067
(615) 495-0752 Direct
This posting with the content written here and photographs displayed are the intellectual property and opinions of Tammie White of Benchmark Realty LLC. Any party who uses this material without the permission of Tammie White is subject to copyright infringement and possible lawsuit.