FSBO Sellers Should Avoid These Three Mistakes

By: Nate Garin
Submitted: 2007-01-17 16:16:36
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How many buyers must see your ad before you get an offer? How many buyers will respond to your ad if you're asking $30,000 over market value for your home? What do you do once you receive your first purchase offer? This article will help you be prepared to address each of these questions because you'll need to when selling a home on your own.

How many buyers must see your ad before you get an offer?

The short answer is: As many as it takes. There is no secret formula to thequantity of advertising that must be done as a for sale by owner (FSBO). Thegeneral rule of thumb is "the more, the better". Most FSBO sellersthat end up listing with a real estate agent underestimate what is requiredin the advertising department. They think posting a sign in the front yard andmaking some flyers to hang in local grocery stores will be sufficient. Someeven think posting an ad in the local newspaper for a weekend will do the trick.While these are all good things and highly recommended, they should not be theonly things done.

Around 75% of all buyers begin their home search on the internet now. In caseyou weren't paying attention let me just say that again. Around 75%, or three-fourths,of all buyers look on the internet first when shopping for a new house. Howshould that statistic be interpreted? Well, it seems fairly obvious that placingan ad on the internet is pretty much an absolute must. There are a number ofweb sites where for sale by owners can advertise their home for sale with amountain of details along with a variety of photographs. Buyers love information,so provide as much as you can.

How many buyers will respond to your ad if you're asking $30,000 overmarket value for your home?

The short answer is: none (unless they are total suckers). Pricingyour home fairly and according to market value is one of the most importantthings you need to do as a for sale by owner. If a for sale by owner pricestheir property too high, there is a good chance of little or no buyer response- no matter how much advertising is done by the seller. Contrarily, if a houseis priced too low, there will likely be an enormous response and the sellermay end up taking $1000's less than they should. Pricing too low isn't as commonas pricing too high, however.

The problem is that most FSBO sellers overprice their homes, and as a resultthey get little response. With little response, the seller grows tired and/orloses confidence that they can sell on their own, and they eventually hire areal estate agent. Often, the real estate agent will simply help the home ownerprice the home better and a buyer suddenly appears.

You can find out the market value of your home by ordering a professional appraisal($300-$500), using an electronic appraisal service online or by requesting aComparative Market Analysis (CMA) from your local real estate agent. Withoutknowing the market value of your real estate you are just guessing. Do you havethe time to waste while you try to guess right?

What do you do once you receive your first purchase offer?

Real estate agents charge between 3-6% of the final sales price ofa property. Avoiding this cost is one of the major incentives for most FSBOsellers. But by avoiding the Realtor, the home seller also forfeits the agent'sexperience and know-how. This void causes many FSBO sellers such heartache anddistress that a successful sale is often not achieved, resulting in the eventualhire of the agent.

Wise FSBO sellers fill the void created by the lack of a real estate agent.Some do this by using their own experience and doing their own research. Othersdo it by building a team of professionals who will be involved in the transactionanyway: a mortgage broker, a title company,an appraiser and possibly an attorney. These professionals have oodles of experiencewhen it comes to completing the transfer of real estate from one person to another.They know what is required in their particular niche and they can often pointa seller in the right direction when a question arises.

Conclusion

Don't sell your home on your own without having planned for the threequestions listed above. Advertise the fact that your house is for sale likecrazy, find out what it's worth and make your asking price reasonable, and knowwhat to do once you get an offer.

The author works for a leading FSBO website (FSBO3k.com) where selling a home with no realtor is the specialty.

Article source: Expert Articles