It was with great sadness that I learned that my good friend and the little league coach for my son, Larry, was leaving the area for a new job in another state. Having just started an internet marketing service for FSBO Sellers, FSBO Volusia, I called Larry to discuss how he was going to market and sell his home. Larry told me that he decided to list his home with a local real estate agent and was asking $519,000 for the property. Larry said he wanted to move the home quickly so that he would have it under contract prior to his transfer. I asked how he came up with his asking price. Larry explained that his real estate agent had shown him a CMA (Comparative Market Analysis), and based on past sales and the two other homes for sale in the neighborhood they had arrived at the $519,000 asking price. Larry went on to say there was a very similar home in the neighborhood with an asking price of $525,000 and his agent suggested that they set the asking price at $519,000 so that everyone who looked at the more costly home would also take a look at his home. This all seemed to make good sense to me and I asked Larry how much he expected the house to ultimately sell for. Without hesitation, Larry said he felt it would sell for an amount very close to $500,000 and that he knew the home would appraise for at least that much, if not more. Larry, I said, this means you expect to net $470,000 if your home sells for $500,000, after you pay 6% or $30,000 to your real estate agent. Larry looked at me and wondered where I was going with this. There might be another way to market your home for a quicker sale and greater net to you as the owner. You mentioned that with an asking price of $519,000 you where competitively priced and that you expected to sell your home for close to $500,000. What would happen if you tried to sell your home on your own with a starting asking price of $499,000? You could use $3000.00 to market your home yourself, leaving $6000 for negotiating with the buyer. You sell your home for $490,000 or an additional $20,000 in your pocket. The buyer would pay less and you would net more. It is a win win situation for the buyer and the seller. Larry looked at me with some disbelief and asked, so what is the down side to this whole scenario. There is not much down side, I explained. To receive the extra dollars in your pocket and the potentially quicker sale you will have to do a number of the things that a real estate agent normally would do. As an owner seller you will have to let the world know that your home is for sale and at a very good price. We left $3000 in the plan to use for marketing; this should include on-line internet marketing, local print media advertising, and signs, both at the property and directional signs. One should conduct a few open houses, and most importantly sellers have to be available to buyers. Wow, Larry said, that does not seem too difficult for potentially $20,000. But what should I do if a real estate agent shows up with a customer? Well lets do the math. If you offer the real estate agent a 3% commission to bring you a buyer and you sell for $490,000 you will net $475,300 or $5,300 more that your first scenario where you start at a higher asking price, accept a higher purchase price and net only $470,000. Once again it is a win win situation, in this case the seller wins, the buyer wins and the real estate agent that brought the buyer wins. Now it was time for Larry to look at me sadly. I wish I had spoken to you before I signed a three month contract with my real estate agent, said Larry. I may have been able to sell my home quicker, for less money from the buyer, and still net more for my family by selling FSBO. Paul Wilken
http://www.fsbovolusia.com |
