by David Depman
For Sale By Owner (FSBO) seems like a very American thing to do. You have a home, you want to sell it, you do all the work, you manage the process and you get the reward without having to pay anyone. Sounds good on the surface, but the reality is a bit different. (As most ‘to good to be true’ things are…)
9 percent of houses on the market today are for sale by owner. The most common reason for going the FSBO route for those who chose to do so was not wanting to pay realtor commissions. Of all homes that sold through FSBO, about 44 percent knew the buyer who ended up buying their home.
Eddie Tyner, general managerof forsalebyowner.com, reported that nationwide, FSBO sales are showing an upward trend, with a rise of16 percent nationwide in the second quarter 2014 over Q2 2013. With this kind of growth, FSBO may spell opportunity.
5 most common FSBO mistakes that Loan Officers can help with
The process of selling a house is not a walk in the park. Even good real estate agents experience some issue that complicates things in the course of almost every deal. As a loan officer, it’s important to know that virtually every FSBO seller will have some challenges. Knowing the problems is great starting point for connecting with the people who want to sell their homes by themselves. If you learn what people are doing wrong, you can prepare solutions for them. By adding value and finding common ground, you can begin to show that you understand the challenges, that you are a professional with experience and that you are bringing solutions to the table. The reward is that by adding value to the sellers efforts, you will be introduced to the buyers, your target market.
Here are some common problems that FSBO properties experience.
1. The price is all wrong. Either pricing is too high or too low. Helping a FSBO find the right price point is a great way to get an in.
2. No Marketing Campaign – The seller has no idea how to market their home. Look to see if they are on the MLS database.
3. Slow response and flexibility issues – This is an issue that most FSBOs never consider. Selling a house takes full-time dedication. If they are not able to flexibly meet the showing times requested by buyers orif they cannot answer emails and texts immediately, it might be time to bring in an agent. (You can make the introduction)
4. Not fixing up the property – Help them see the value that fixing up the property prior to putting it on the market brings to the final price.
5. No pre-sale inspection – If they failed to complete a pre-sale inspection, explain the benefits. If they think they can rely on the potential buyer to carry out the pre-sale, remind them that this puts them at the mercy of the buyer and their inspector.
These 5 points are only a few of many points on which you can connect with the sellers. Consider that many properties that start out as an FSBO are only testing the water. They are on the FSBO market for a few weeks to see if someone bites. Reaching out to them early may fit perfectly with their existing plans.
How are you reaching out to the For Sale By Owner market?
On Wednesday, we’ll have a look at ways to market to FSBOs in the 2nd part of this article. Go to Part 2.