Selling Strategies for a Soft Market #4

FSBO or Realtor?

As we formulate your bullet-proof Master Plan to sell your Traverse City real estate in our ìsoftî sellerís market, we need to address the possibility of taking on this challenge yourself vs. hiring a real estate professional (or professionals in the case of TEAM MIKE).

The real estate industry term for home owners who attempt to tackle the preparation, pricing, marketing, buyer qualification, seller disclosures, inspection process, contract negotiation, contingency removal, contract closing, deed transfer, and successful sale of their own home is FSBO, short for ìfor sale by owner.î

While it is not impossible to market and sell your Traverse City home by yourself, it takes a LOT of insight, hard work, persistence, patience, and thorough knowledge of the laws, responsibilities, and norms of the real estate and financial industries to be successful. Selling a home is now more complex and time consuming than ever before.

The percentage of gainfully employed, non-real-estate-license-holding individuals who achieve FSBO success is in the single digits. The vast majority of for-sale-by-owner properties, more than 90 percent of them, end up listing with a real estate brokerage because they grossly underestimate the time, money, knowledge, and effort required to sell their property by themselves ó and that is in a typical Grand Traverse area real estate market. Readers of this blog are acutely aware of the nature of our current sellers market, and itís not pretty.

Most FSBOs know enough to put a ìfor saleî sign in their yard. Many will try to tell their friends and neighbors they are trying to sell their home. Some will try to figure out a way to get their property listed on their local Multiple Listing Service (MLS) without actually listing it with a real estate brokerage. A few will even go as far as trying to gain some Internet exposure in their attempt to sell their home. Unfortunately, these attempts do not take into account how most home buyers search, view, decide on, and purchase homes.

In keeping with our propensity for numbered lists, here are the Top 10 Reasons for hiring professional real estate representatives:

1. To optimize the sale price/market time relationship
2. To achieve ìshow qualityî condition for your property
3. To maximize your propertyís market exposure
4. To qualify prospective buyers
5. To help guard against misrepresentations and claims
6. To provide buyers comprehensive property, community, school, neighborhood, and market information
7. To ensure privacy, confidentiality, and safety for both sellers and buyers
8. To minimize the demands on sellers through the planning, marketing, and sale process
9. To utilize the methods and avenues used by most buyers
10. To negotiate for top dollar and maximum seller advantage

Letís look at how you should arrive at an accurate and marketable price for your Traverse City property as an example highlighting the challenges facing the do-it-yourselfer.

How will you arrive at a fair and marketable price for your home? Do you go with the ìIíd love to get Xî-price? How about the ìmy neighbor wants X for his home and ours is SO much nicerî-price? Or maybe you try to utilize the appraisal you paid for when you refinanced a couple of years ago. You know, the same type of appraisal that has helped send the secondary mortgage market into its current calamity.

(May we give you a hint? Banks make money loaning money; the appraisal the bank generated when you sought to borrow more money against your property is not worth the paper it is printed on.)

Good real estate agents typically research and analyze at least half a dozen different indicators to establish the real market price for a given property in a given market. We will then include additional factors like what a sellerís goals and time frame are, what they owe on the property, and other factors that will affect the successful marketing and sale of a home.

While it is possible to attempt the preparation, pricing, marketing, buyer qualification, seller disclosures, inspection process navigation, contract negotiation, contingency removal, contract closing, deed transfer, and successful sale of your own home, it is no where near the best plan. In a market where only a painfully small percentage of the available properties are selling at all, further hindering your success by trying to also be a part of the fraction of FSBOs that achieve success is not only bad math, but a bad plan.

Yes, weíre biased in our opinions, but we also spend all day, week-in and week-out, intimately involved in the Grand Traverse real estate market, achieving success for both our buying and selling clients.

There are of course some who claim that they not only sold their home themselves, but that it was a breeze, and that they donít have any idea why any sane person would ever hire a professional. These are often the same people who claim to be great drivers because theyíve never had an accident, or who always win at their local casino despite the fact that said casinos annually report their cash profits in the tens of millions of dollars a year!

Claims of no-hassle, anyone-can-do-it, why-pay-a-professional real estate dealings and ìI do real well at the casino on a regular basisî fall under the same general heading ó Iíll let you give it your favorite moniker.

Ask the Realtors readers are learning that to achieve selling success in todayís Traverse City real estate market, you need to maximize all the available positives while trying to eliminate as many negatives as humanly possible. Utilize the very best professionals you can to help ensure your selling success in our soft market.

Successful FSBOs and appraisers can start the comments below, or feel free to email Mike Annelin or myself at Mike.Annelin@C21Northland.com or MikeGaines@C21Northland.com if you have any questions we can address.

Thank you for reading Ask the Realtors. We hope you all had a very happy holiday season and are looking forward to a great 2008!

All the Best,
TEAM MIKE



Last Updated: January 09, 2008