Certainly, I would highly recommend selling your home by yourself and saving the commission if market conditions are such that it makes sense to do so. But the reality is that most of the time, that’s not the case.
Statistically, 91% of FSBO sellers never sell their own homes. Is it because they are not motivated? No. Is it because they don’t want to advertise their homes? No. Is it because they lack specific skills to write contracts, pre-qualify potential buyers, or negotiate an acceptable deal? No. No. No. The reason most FSBO sellers are unsuccessful is because the market is not favorable for a FSBO strategy.
When market conditions are right, selling your own home is a great way to go, but when the market is a buyer’s market, the strategy just doesn’t work. And what makes matters worse is that in the process many would-be FSBO sellers lose valuable time and incur a great deal of financial cost (months of additional payments and advertising) and emotional stress by trying to go it alone in the wrong market.
Other concerns may influence the decision whether or not to go FSBO: “Do I really have the time to market the home properly?” or “Do I want to go to the trouble of marketing the home myself if I can find a competent agent that will do it better and more than pay for his own brokerage fee?” Clearly, the only one who can make that decision is you, the seller. In most cases, the smart money is on hiring an agent — a competent agent who will more than pay for himself. But if you don’t select a competent agent, you’re probably better off doing it yourself.
“Okay,” you may be thinking, “how can I select and hire a competent agent from a sea of mediocre agents?” That’s a good question. Don’t hire someone because he is a friend of the family or he’s a relative. This is a business decision, and you should treat it like one.
It comes down to two things. First, you need an agent who knows your market cold. Second, he needs to be able to understand and implement your traffic approach.
Many agents are not willing to allow you to dictate the marketing approach, and they will insist on using the age-old price approach. If you interview an agent and he is not able to both demonstrate his knowledge of your market and a willingness to break away from the traditional way of selling homes, you need to find another agent. That sounds harsh, but the sale of your home has a huge financial impact on you and your family. Don’t be afraid to say no. If you hire an agent, he should be willing to work for you. Here’s what I mean by that. This is your home.
You are the one deciding how best to sell it. You need to hire an agent who’ll be willing to break from tradition and use the traffic approach. If you hire an agent that’s not willing to try this approach, he won’t put his heart into marketing the additional commission bonus to the other agents. Your agent should be contacting every other agent in your market on a weekly basis, reminding each of them of the additional commission on your home. If your agent fails to follow through on that part of the approach, it will be much tougher to get great results. Remember, the whole reason for using an agent is to have access to the other agents in the market. Agents sell houses, so your advertising needs to be directed at them, not the public.
You shouldn’t hire an agent because he or she is a “Gazillion Dollar Producer” or has lots of alphabet soup (real estate designations) after his name. Don’t be fooled by fancy brochures, slick marketing pieces, fancy business cards, or PowerPoint presentations. The size of the agent’s company is irrelevant. So is whether or not he’s with a national franchise. None of those things will get you top dollar for your home. If all his marketing is “I-love-me” advertising, keep looking.
The agent you hire should be able to clearly demonstrate his knowledge of your market. He should be able to give you accurate DOM data, sales probabilities, list-to-sale ratios, absorption rate data, as well as a specific marketing plan for reaching the other agents in your local market. He should know what the local market appreciation rates have been over the last several years. He should know what to expect in the way of “normal” discounts or markdowns. In other words, he should just clearly know your market. Even if he is a great agent, if he is not knowledgeable when it comes to your specific market, he is not your guy. This is your house — take the time to find the right agent.
If you don’t know an agent that meets these criteria, feel free to call me and I’ll be happy to help you find one. Remember, the right agent can make his commission back to you several times over. Don’t be penny wise and dollar foolish. Find a good agent.
We have helped many home owners.
Paul & Ginger Conti