Post by Daniel Morris | Date: 13-10-2022
Technology is making it easier to sell your home these days. We have public real estate search engines that completely dominate the space. Couple that with professional photography and some homeowners think that you can just pop listing photos on platforms like Zillow and the home will sell itself, right? So why do the experts say that going FSBO will actually cost you more in the end? And what about buyers? Do you think you can get a better deal if you’re not represented?
Let me tell you a story about my own personal transactions. A little background first, my wife and I are two of the most qualified "non realtors" you could find - I own a real estate marketing company and she is a real estate attorney. We listed our home back in June and closed on our new property this September. After going through the process of buying and selling, it became so obvious that utilizing a realtor was such a great benefit.
Here are the reasons why:
You’re leaving money on the table
While we had a "feel for the market" - we would have run incorrect comps on our house. Everyone has either positive or negative bias towards their home - ours was negative. We thought our tiny home was worth about $75k less than what it was listed for and would have accepted an "off-market" offer for about $100k less than what we ended up getting. The commission we paid our realtor was one of the best investments we have made to this date.
You have no idea how to market a home
Homeowners are not aware of the latest tech in the industry and how to leverage it to effectively market their home. Most homeowners will take photos themselves. The savvy ones will reach out to companies like mine for professional photography - but that’s it. While a seasoned realtor will add at least one additional rich media element to their marketing (property video and/or 3D tour). Realtors also know how to utilize tools like virtual staging to better market a listing.
Realtors will also advise a homeowner on how to prepare for photos and showings. A strong showing and correct price will yield offers in almost any market. Homeowners struggle with one - if not both - of these concepts.
You suck at showing your own home
While searching for our new home, my wife and I heard about an off-market property from our neighbor. The owners of this property wanted to do a deal without any realtors involved. My wife and I decided to preview the property to see if we could strike a deal. During the showing, the seller felt comfortable enough to joke about a colorful exchange that he had with some teenagers that were biking on a hiking path that was positioned at the end of his backyard. Little did he know, that the conservation easement where the exchange took place was a major concern for my wife. He literally killed the deal before we left the property.
The feedback you will never get
Back to the off-market property. The sellers mentioned to our neighbor that we had "terrible poker faces" and they "for sure" thought we were going to make them an offer - we didn't. We really liked the sellers but didn't have the guts to tell them that the easement was a deal breaker for us. We said that we were early in our process and wanted to look at more homes.
People need to keep in mind that what is okay for you may be a deal breaker for someone else.
Most FSBO's are not aware of specific terms like mortgage and appraisal contingencies. You may want to take the bid that offers you $100k over your list price - sounds great, right!?? But what if that person is only able to come up with 10% down and does not have the $$ to make up for a low appraisal?
As a seller, we are hyper-focused on one thing - the money! But not all offers are equal and getting to the closing table should be your number one priority. Realtors will make you aware of terms that you may be overlooking.
Dealing with multiple offers
For our sale, we did a "Coming Soon" on Tuesday with showings to start on Friday. Our first offer came in on Friday night. We literally wanted to accept that offer right away (it was $65k over ask!). Our realtor stressed patience and kept the OH. We received SIX more offers - with the winning bid coming in 10 mins before our deadline ($85k over ask).
But guess what? The first deal fell apart in attorney review (because that never happens right?). This offer had the best terms, best price, but it didn't work out - that's going to happen from time to time. Luckily, our realtor managed the losing bids with grace and pulled in the back up offer within hours. We had a wonderful experience with our buyers and closed with no issues.
Submitting an offer
There is so much that goes into submitting a strong offer. You need to comp the house properly, lay out your terms in a favorable manor, and when you submit your offer can matter. Your average person has less of a chance on winning in a multiple bid situation because they are unaware of these factors - they only think about price. A seasoned realtor will coach you up on how to submit a great offer and will know when to submit it - they have more of a pulse on the market than you.
The most contentious part of any deal is the inspection negotiations. This is the part of the process where emotions can run high and you need a third party to keep everyone moving towards getting to the closing table. Sellers need to understand how to manage these requests and buyers need to know what to ask for (and what to let go). Realtors (and a good lawyer) will walk you through the process and let cooler heads prevail.