FIVE MISTAKES FSBOs MAKE WHEN SELLING THEIR HOME I

FSBO real estate listings increase when the real estate market favors the seller and when mortgage interest rates are low. As I write this post, the Crystal Coast of North Carolina and Emerald Isle are experiencing a seller’s market. And, mortgage interest rates are at historic lows. As a licensed real estate agent, I work with both buyers and sellers and FSBOs impact my working relationships with both. In this post, I examine FSBOs from the point of view of the seller and the perspective of me as a listing agent. Next week, I will examine FSBOs from the perspective of a buyer and me as a buyer’s agent.

OK. Let’s dive into the psychology of a FSBO. Let me begin by stating a little known fact: most real estate professionals do NOT list their own homes. We prefer to extract a referral fee from the listing agent. Far more lucrative from a time perspective. So, what does motivate a homeowner to sell a house all by themselves? The number one answer is money. Most FSBOs I talk to want to save the commission. Rather than paying a 4%, to 6% commission of the sales price split between the listing and selling agencies, FSBOs are motivated to go it alone and save that money. On a $300,000 home, that amounts to between $12 and $18,000. A sizable chunk of change, to be sure. But, to pocket that savings, the FSBO MUST secure the buyer. And, since that turns out to be a very difficult task, most FSBOs will offer 2-3% to licensed agents like me if we bring the buyer to closing. So, in the end, FSBOs really are looking to save only 2% to 3%. On that same $300,000 home, that savings is cut in half to between $6 and $9,000.

The number two answer is ignorance. That is a strong word, so let me explain. Most FSBOs think all I do as an agent is drive buyers around and open doors. That every client buys a house and that every house sells itself. If my job were that easy, I would have no job. Everyone would sell by FSBO! But, 97% of home sellers do not go the FSBO route. Bottom line, FSBOs are ignorant of what I do to earn that 2-3% commission for the agency. And, that is my fault. And here is another little known fact: all commission checks are split between the agency and the agent. That is why all commission checks get written to real estate agencies and not to real estate agents. So, on that $6-$9,000 commission earned on selling that $300,000 house, the agent may only receive 1% or $3,000. That being said, one of my jobs as a professional real estate agent is to educate home owners on the value I bring to every transaction and that is one reason I do these weekly videos. So, what exactly is it that I do?

#1. I know how to make your home look great to any buyer who comes to see it. The way you live in a home and the way you sell a home are two very different things. And, right here, in step #1 FSBOs often make huge errors. The FSBO has gotten used to the clutter and odors in their own home, yet a home buyer thinks the house looks like a yard sale or stinks like an oversized, smelly sneaker. Homebuyers ideally want to their new home to be a “model home.” No nicks, scuffs, dings and definitely no clutter. They want lots of room and things to look like new. My job when preparing your home for sale is to give the buyer what they are looking for in terms of condition, features, benefits, and amenities.

There are some things that can’t be fixed. Items such as a busy street, sloping lot, number of bedrooms, bathrooms, etc. are generally fixed and unchangeable. But there are others that can be improved upon easily and inexpensively. Doing the work up front will get your home sold quicker and net you more money. Getting your home ready for sale and getting you to keep it in showing condition during the selling process is one of the most important and crucial services that I provide my clients.

#2. I know how to price your home so that a buyer has bragging rights. Bragging rights are what allows buyers to feel good about buying your home when someone tells them “it’s a horrible time to buy”; or that “prices are still dropping”; or “this is a bad decision.” They need to be able to counter with – it was too good of a deal to pass up because “the sellers paid closing costs”; or “we bought for $XX less than the last sale”; or “it was bought for under appraisal.” Pricing the home correctly is the first component to creating bragging rights. And, what do FSBOs do? They OVER price their homes. This is a huge mistake. Yet, it’s easy to see why many FSBOs over price their homes. You’re attached to them, you’ve poured your sweat and money into your property, and “you need to get $X out of it.” Overpricing a home is a fatal mistake. And, I will use that mistake to my advantage. Many times I’ve used a FSBO listing as a comparison to show my client why another home is such a good value. A lot goes into pricing a home so the buyer has bragging rights but that is the subject of another video.

#3. I know how to get QUALIFIED buyers in to see your home. Selling a house is a numbers game. It is about getting as many qualified eye balls as possible to look at a house for sale. And, FSBOs have two strikes against them even before they hammer all their marketing—the FSBO sign- in their front yard. Many UNqualified buyers will look at FSBOs hoping for a bargain, or worse, a sucker. Strike ONE! And, most real estate agents out there don’t like to show FSBO’s because of the increased workload, and increased liability. If an agent has other options to show their buyers they will skip over a FSBO in favor of a comparable property listed with another agent. Strike TWO! And, it is this third component of selling a home, marketing, where I can give my sellers a decided advantage. In marketing, you must always lead with the benefits, and then you can follow with features. Features will not sell your home... benefits will. Benefits are all about the advan­tages to your buyer. Benefits are what cause a prospect to buy your home. Benefits are what your pros­pect gets from a feature. Benefits answer the prospects biggest question "What's-in-it-for-me?" Again, a lot goes into marketing and that, too, is the subject of many of my other videos.

So, now you know a bit about FSBOs and a bit about what I do to help FSBOS and my clients sell their homes more quickly and for more money. To learn more about real estate in Emerald Isle, NC, Bogue Banks or the Crystal Coast, sign up for my blog on my website, www.EIHomesforSale.com, and subscribe to Emerald Isle Vacation Home Specialist on You Tube. To receive my newsletter or my book, Live Where You Vacation, text your email address to: 919-308-2292. Stay well and stay safe.