For Sale By Owner in Central Oregon
Some home & property owners assume they can save money by selling their house by themselves, without the assistance of a licensed real estate professional. While avoiding real estate broker comissions may seem like a cost-saving strategy in the short term, more often than not, those who go the "For Sale By Owner" route often end up spending significantly more in the long run - both in terms of time and money.
Here are a few of the many reasons why listing your home as "For Sale By Owner" – usually abbreviated as FSBO and pronounced "FIZ-bo
" by those of us in the industry - may not actually be the best option for you.
Are you priced to sell? Or are you priced to sit? Many FSBOs are priced to sit. They have been priced by an owner who has a specific number in mind which isn't supported by current market data. Or they have been priced by an owner who is going off of a computer-generated number such as Zillow's "Zestimate." While computer-based estimates are a good starting point, they almost always need to be analysed and refined for the current market, the property's location, as well as other comparable sold and currently listed properties. Remember, the computer hasn't actually seen your house and doesn't know what has or hasn't been done to it. It only knows recent sales and hard facts like the number of bedrooms, bathrooms, square footage, and acreage (based on County records and past sales history). Using an algorithm, the computer then arrives at a price - or, more likely, a price range. Assuming the data it uses is current and correct, that range may be justified, but it still lacks a human touch. This is one of the areas where a licensed real estate professional can give you an edge. A good local agent knows his or her market. He or she knows what is and isn't selling and can price your house to sell within its specific market niche better than an internet number ever could.
If you are considering selling real estate on your own - without the assistance of a broker - you need to consider the legal ramifications. This is a significant issue. Mistakes in the transaction paperwork, filling out contracts, understanding contingencies, researching encumbrances, and complying with disclosure laws on issues such as radon, mold, lead paint, and even Bend's new sewer improvements can potentially cost you thousands, kill the sale, and/or even result in one or more lawsuits. Brokers, as part of their licensure, are trained to deal with the legalities of real estate sales. Additional yearly continuing education is required to maintain their licensure and further adds to their understanding of the various legalities involved with selling real estate.
A recent survey from the National Association of Realtors
indicates that the internet is the number one place where buyers found the home they purchased. The breakdown looks like this:
- 51% - Internet
- 30% -Real estate broker
- 7% - Yard sign/open house sign
- 6% - Friend, relative or neighbor
- 5% - Home builder or their agent
- 2% - Directly from sellers/Knew the sellers
- Less than 1% - Print newspaper advertisement
While websites like zillow.com and forsalebyowner.com have made it much easier to market For Sale By Owner listings, they don't have nearly the cummulative reach that licensed real estate broker websites have. When I list a property with the Central Oregon MLS, it is automatically syndicated to ALL of the 2000+ broker websites in Central Oregon (provided, of course, that they have an active membership with the MLS). It is also syndicated to the the Zillows and Trulias of the world. As part of my association with Berkshire Hathaway HomeServices Northwest Real Estate, every listing I take is further syndicated worldwide through the BHHS system of affiliate websites as well as over 200 others that the company has associations with.
Furthermore, the Central Oregon MLS offers monthly and/or weekly broker tours (depending on the area). Our office also has it's own internal monthly broker tour of our office listings. All of which can significantly increase the number of brokers who will view your property in person. In addition to working with sellers, most brokers are usually working with a number of buyers as well. The more chances they have to see your listing in person, the more likely they will recommend it to one or more of their buyers.
Negative Incentive for Buyers
Many buyer agents actively avoid showing their clients FSBO homes solely on the assumption that the FSBO owner will not pay a broker commission. Other agents are reluctant to show FSBOs to their clients because they know that since the seller is not being represented by a licensed real estate professional, any potential transaction will likely be more difficult. Many brokers have had negative experiences with FSBO sellers who, by definition are amateurish and unprofessional (not to mention unrealistic, careless, and even unethical). It's also worth pointing out that even if you are willing to offer a commission to a buyers' broker, that broker - even though he/she has the duty to be fair and truthful in all dealings with you - is ultimately is representing the interests of his/her client.
Safety & Scheduling
Once you plant a "For Sale By Owner" sign in your yard, are you comfortable having random strangers stopping by unannounced and expecting to be let in to see your home? Or will you have a way to vet prospective buyers before they arrive? Are you willing to make time to show your home? Will that conflict with your other commitments (job, hobbies, vacations, kids' school events, etc.)?
For Sale By Owner ads and signs are an open invitation for anyone to see your house. When you open your door to a stranger, you have no idea who the person stepping through the doorway is. Looky-loo or prospective Buyer? Qualified or just checking out the neighborhood? Through casual questioning, they often easily can find out what hours you might be gone and if there is a security system in place.
When Buyers work with a licensed Broker, they view houses with their Broker. Their Broker makes an appointment with your Broker and the lockbox is specially coded with each Broker’s identity. Information can be easily obtained from the lockbox about who has shown your home as well as the time and date of the showing.
If you already have buyers in place and they are representing themselves, you may feel perfectly comfortable handling your own negotiation. However, if you don't yet have a buyer and are listing your property For Sale By Owner, you will have to be prepared to negotiate terms with at least one or more of the following:
- The buyer, who wants the best deal possible
- The buyer’s broker, who wants his/her client to receive the best deal possible
- The home inspector, hired by the buyer and will almost always find one or more problems with the house)
- The appraiser if there is a question of value
Keep in mind that licensed real estate professionals all have some degree of training in negotiation. Do you really want to go up against someone like that who is representing the best interests of a buyer? Or do you want a trained negotiator who will act on your behalf and look out for your best interests?
The Numbers Are Against You
According to the same NAR survey
referenced above (under Marketing), FSBOs accounted for 8% of home sales in 2016 and the typical FSBO home sold for $190,000 compared to $249,000 for agent-assisted home sales.A 2015 article
from the NAR website, notes that "only 8 percent of home sales last year
 were those in which the seller went through the process without an agent - known as for-sale-by-owner sales or FSBOs - the fewest percentage since NAR began tracking these sales in 1981."
Despite what the numbers indicate, it's not impossible to sell your home yourself. If you have a realistic sense of your home's value, have a buyer who is ready, willing, and able, or are prepared to work with a buyer's broker, and comfortable with peforming your own marketing and transaction paperwork, have the time and ability to screen potential buyers, and are immune from the inevitable criticism that buyers can direct toward your home, then listing your home as "For Sale By Owner" may be the best path for you to take. However, it may not be the easiest or most profitable path.
Where Do You Want To Go?
Ultimately that is the real question you should ask of yourself if you are considering listing your home as "For Sale By Owner." Are you moving across town? Are you relocating out of the area? Are you downsizing? Are you buying a larger home? Your destination is more important than where you have been or even where you still are. The second question you should ask is: When do I need to get there? Unless you already have a prospective buyer in place, a "For Sale By Owner" listing is typically the slowest path to your future goal(s). And as I've pointed out above, it is usually the more expensive path as well.
The Next Step
If you are currently listing your home or property as For Sale By Owner and are dissatisfied with how it's going, or if you are thinking of listing real estate and are undecided about whether to list it yourself or hire a broker, please contact me. I am more than happy to meet with you, discuss your situation, and even prepare a complimentary report of value for you.
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