By: Brett Puckrin
The 2016 Spring market for real estate in Ontario hasn’t stopped yet. In fact it started much earlier than anticipated in February in our area in North Durham and Kawartha Lakes. In today’s market, with homes selling quicker than we can put the sign up and rising prices, some homeowners might consider trying to sell their home on their own, known in the industry as a For Sale by Owner (FSBO). Regardless of the market being a sellers-market, buyers or balance market. There are several reasons this might not be a good idea for the vast majority of sellers.
Here are five of those reasons:
- There Are Too Many People to Negotiate With
Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner (FSBO):
- The buyer who wants the best deal possible
- The buyer’s agent who solely represents the best interest of the buyer
- The buyer’s lawyer (trust us, this is not a pleasant experience)
- The home inspection companies, which work for the buyer and will almost always find some problems with the house
- The appraiser if there is a question of value
There’s a code in the industry that most buyer agents stay clear of bringing their clients to a FSBO. Let me explain, buyer agents get paid a portion of the commission by the listing agent. Now with a FSBO – they haven’t signed a listing agreement with a real estate firm and are not deemed to pay a fee for services rendered. So the question is still, Who will be paying the buyer agent? And I can assure you it won’t be the buyer clients!
Year after year studies from The National Association of Realtors (NAR) clearly shows home-owners going the FSBO route –
- a) Stay on the market longer,
- b) Don’t experience multiple offers or have “bragging rights” for selling over asking
- Exposure to Prospective Purchasers
Recent studies have shown that 89% of buyers search online for a home. That is in comparison to only 20% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. As a FSBO will you?
Sellers choosing the services of Puckrin & Latreille will gain a Digital Marketing Strategy Advantage. Our actions are consistent as we track, monitor and evaluate to get to the end result.
- Results Come from the Internet
Where do buyers find the home they actually purchased?
44% on the internet
33% from a Real Estate Agent
9% from a yard sign
1% from newspaper
The days of selling your house by just putting up a sign and putting it in the paper are long gone. Having a strong Digital strategy is crucial.
- Selling on your own has Become More and More Difficult
The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory. This is one of the reasons people doing FSBO has dropped from 19% to 8% over the last 10+ years.
The 8% share represents the lowest recorded figure since NAR began collecting data in 1981. Source: NAR: http://goo.gl/gOltb6
- You Net More Money when Using an Agent
Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission.
Studies have shown that the typical house sold by the homeowner in the US (source: NAR: http://goo.gl/GFQbk) sells for $210,000 while the typical house sold by an agent sells for $249,000. This doesn’t mean that an agent can get $39,000 more for your home as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make sense.
To best illustrate my point here’s a real case scenario. We recently listed a home in-town Port Perry. Prior to being under our services – the listing was in limbo. The home owner had it twice on the market with a 3rd party FSBO marketing agency. Not getting any results, they decided to call our services. We conducted a market analysis (CMA) report and the house was listed according to market value. Needless to say it sold within a few days on the market.
Click on the link to view the youtube video from The Canadian Real Estate Association: CREA – Miriam’s Story: The Disappearing Buyer
Before you decide to take on the challenges of selling your house on your own, let’s meet up so we can discuss the difference having an agent can make.
NAR – National Association of Realtors, Data on For Sale By Owner (2015) Field Guide to Quick Real Estate Statistics via: http://goo.gl/GFQbk
NAR – Field Guide to Working With FSBOs via: http://goo.gl/gOltb6
CREA – Canadian Real Estate Association – Live with No Regrets Campaign (2016) via: https://goo.gl/3XMNHR
Brett Puckrin, AACI, P.App
Puckrin & Latreille Real Estate Group
RE/Max All-Stars Realty Inc. Brokerage – Port Perry