The Biggest Lie You’ll Hear When You Sell Your Own Home

Do you what they call a buyer who makes a lowball offer in today’s market? Renter.

FSBOI can certainly understand a home seller wanting to sell their own home. There are three compelling reasons to do so:

  1. In today’s market a properly priced home will practically sell itself
  2. Most buyers find a home online, without the help of a realtor
  3. It saves a ton of money

Of course if you do sell your own home, you will likely encounter an old wives tale that has been passed off as the truth. The story goes that when you sell your own home, savvy buyers will know that you are saving the commission and will expect you to pass that savings on to them, so they will just subtract that amount from the “fair” offer they make you.

Maybe that logic works in a buyer’s market. Then again any lowball offer may work in a buyer’s market, depending on the motivation of the seller. But in the seller’s market like we have today in most areas, following that logic will keep you on the outside looking in.

The truth is that most homes for sale today are extremely competitive, tend to sell quickly and for over the asking price—even homes being sold without a realtor.

So, go ahead all you FSBOers. Take some great photos, price your home intelligently and don’t worry about passing on commission savings. It’s just a myth perpetrated by those who don’t benefit when you sell your own home.

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

For Sale By Owner: The Missing Ingredient

There must be a hundred new companies exploiting technology to try and do away with real estate agents. And no matter what they call themselves, they are all essentially the same thing: For Sale By Owner (FSBO) platforms. Let our technology help you sell your home without a real estate agent.

FSBOThere is little doubt that the days of real estate agents are numbered, if for no other reason than millennials detest the thought of using them. But until that day, savvy home sellers will try and sell their homes without an agent using these new services. And regardless of how well thought out or comprehensive these new services are, all the home sellers will struggle to sell their home because of one very low tech, missing ingredient: a home showing service.

What is a home showing service? A company that helps For Sale By Owners sell their home by showing it to prospective buyers.

You see, no matter how high tech and online the home selling process becomes, home buyers still want to get inside the home to see it and they want to do so WITHOUT the home owner there. Showing prospective buyers a home, whether at an open house or one at a time, is a job usually performed by the listing agent working for the home seller.

For Sale By Owners don’t have a listing agent to help them show their home so they try and perform that service themselves, but that’s a mistake because it scares some buyers away.

The advantage of a home showing service is that it appears to prospective buyers that the home is represented by a real estate agent. There is a For Sale sign out front with a phone number to call to arrange an appointment to see the home. When the buyer calls that number to arrange to see the home, a person professionally dressed and knowledgeable about the home meets them there to let them in and to answer any questions they may have about the home. A good home showing service can even pre-screen buyers to make sure only serious ones get in to see the home.

The real trick to selling a successful FSBO is making sure it doesn’t look like a FSBO. And unlike a real estate agent, who expects a percentage of the home’s selling price, a home showing service can provide their service for a small, flat fee.

A home showing service is the low tech solution to propel residential real estate into the 21st century. Who wants to start one?

 

 

 

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Finally, An Article That Tells the Truth About Real Estate Agents

Leave it to MSN to finally pull back the curtain—at least a little—and tell the truth about real estate agents in their article 25 secrets real estate agents won’t tell you.

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Some highlights of the article include…

True: They’ll lie to you about what they think your home is worth just so you’ll choose them.

True: They WILL negotiate their fees.

True: They don’t always put you first.

True: They sometimes make up prospective buyers.

True: They make extra money from their recommended contractors.

True: You can do the same research they do online for free.

True: They won’t really suffer if you sell your home for less.

True: They use selling techniques on you.

True: You can sell it yourself online.

All of these are true, but the real tragedy is why they’re true: lazy, uninformed and fearful consumers enable bad real estate agent behavior.

Real estate agents only do what they know they can get away with. And not much will change until buyers and sellers get themselves an education (and a backbone) and stop tolerating this behavior. Until then, we’ll just have to settle for more articles from MSN.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Why Are There So Few FSBOs?

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A lot of home sellers naively think that the way to save money when selling their home is to sell it themselves. What most do not understand is that when they try to sell their home themselves the entire real estate industry actively tries to see to it that they fail. They are trying to find a buyer for their home and all the agents in the area are trying like hell to keep their buyers from buying it. They want the For Sale By Owner (FSBO) to fail so they can swoop in, sell the home, look like a hero and pick up the commission. But the home will not sell because of the agent’s knowledge and skill, it will sell because all of the other agents will start cooperating and bringing their buyers to see the home. And if the FSBO home seller does not have a strategy to combat the industry’s efforts, they are likely to be disappointed in the results.

So, why do some FSBOs actually sell in spite of the industry’s effort to thwart them? Because intelligent home sellers understand the three things that have to happen to sell a FSBO for top dollar: a desirable home, a seller’s market and proper pricing. If you have a desirable home in a seller’s market AND you price it right, someone will buy your FSBO home, in spite of any effort to keep buyers away. My sister and brother-in-law did just that years ago when they bought their home. They wanted to see a FSBO home and their agent did not want to show it to them. So, when they were done with their agent, they went back to the home and negotiated with the seller directly. Desirable home, seller’s market, proper pricing. And of the three, proper pricing is by far the most important.

No buyer wants to view an overpriced home, and they sure as heck do not want to view an overpriced FSBO. When you sell your home yourself you cannot give ANY reason why a buyer would not want to visit your home. In fact, you have to make it so enticing that even buyers who are uncomfortable with FSBOs will summon the courage to see your tempting (and properly-priced) home. Because in the end, most buyers care more about buying a home they love at a fair price than making their agent happy.

I have often thought the missing piece to the FSBO puzzle was a professional home showing service that FSBOs could hire in place of a real estate agent. A professional home shower would provide some of the services of a real estate agent, but without being a real estate agent. They could hold the Open House, pre-screen buyers, give buyers tours of the home and answer any questions they may have about the home. In that manner the home showing service would solve the biggest problem facing FSBOs: letting buyers view the home without the home owner being there. And more importantly for the owner, the home showing service would simply charge a nominal fee for their service, rather than take a 3% cut of the sale price. Home showing services would be especially valuable in high priced neighborhoods and would probably provide a more responsive service, since that is all they would do.

I have no doubt that at some point in the future a majority of homes will be sold FSBO. In the age of the Internet, wherever there is an over-priced middleman, eventually that middleman goes away (or is extremely marginalized). It will be interesting to see how things unfold, and if some enterprising new company steps up, offers a home showing service and accelerates the process of making For Sale By Owner the new norm.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

It’s Not For Sale By Owner – It’s Just For Sale

When it comes to selling your home, if you choose to do it without the help of a real estate broker, it is customary to let everyone know that you are doing so by putting up a sign that says “For Sale By Owner.” I have news for you. EVERY home is For Sale By Owner, because no one else is legally allowed to sell it.

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If, on the other hand, you choose to hire a broker, your sign will probably just read “For Sale,” when it really should say “For Sale With Broker,” because they are helping you sell your home. But, so too is the title company, the escrow company and probably a real estate attorney. So, technically the sign should read “For Sale With Broker, Title, Escrow and Legal.” Maybe you should add the termite inspector too. A lot of professionals help a home owner sell their home, not just brokers.

I think the biggest mistake home owners make when selling their home without the help of a broker is to put up a sign that says “For Sale By Owner.” Who cares? It is not For Sale With Broker, why should it be For Sale By Owner? It’s just For Sale. If you want a tour of our home, here is a phone number. Give us a call.

Why bother differentiating? I think I know why.

In countries like the UK, where the average sales commission to a broker to help sell a home is only 1%, there not much difference financially between hiring a broker and not, so I suspect most parties do not give the commission a second thought. The same way most people do not give the escrow fee or title fee much thought. But in the US, where sellers are expected to pay a whopping 6% commission, which can be tens of thousands of dollars, everybody wants a piece of that: buyers, sellers and brokers.

By putting up a For Sale By Owner sign, the home seller is advertising who has the initial claim on that commission. And, more importantly, who the other parties should go after to get a piece of it. Brokers try to get their piece of it by attempting to convince the owner they would be better off hiring them. Buyers try to get a piece of it by submitting lowball offers on the order of, you guessed it, 6%.

I doubt any of this money grab takes place in the UK. The fee to a broker to help sell a home is so nominal, I doubt many people try to sell their own homes and also I doubt that buyers give that commission a second thought when it comes time to making an offer.

So, here is to doing away with For Sale By Owner signs and replacing them with simple, but elegant, For Sale signs. Here’s the home; here’s the price. If you want it, make an offer. If not, someone else will. It really shouldn’t matter who is or isn’t helping the owner sell it. Simple.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Can The Intelligent Home Seller Movement Change the Real Estate Industry?

Home sellers, who are fed up with the outdated customs of the residential real estate industry in the United States, are starting to band together in a movement called The Intelligent Home Seller movement.

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These intelligent home sellers are not advocates of For Sale By Owner and are not anti-real estate agent. In fact, they see real estate agents just as much of victims as home sellers in the way the real estate industry currently functions.

They do not believe that some new “ap” or legislation will fix the problem. They understand the only thing that will change the industry is changing buyer and seller behavior, and they are leading the charge to do so. How are they doing that? By refusing to follow the industry’s outdated customs.

In simplest terms, The Intelligent Home Seller movement believes the real estate industry should start behaving like every other home service industry. In this regard, they advocate the industry adopt the following three fundamental changes.

Do away with percentage-based commissions. It does not cost twice as much or take twice the effort to sell a home for twice price, so why should home sellers pay twice as much? It is a custom that is unfair for all but a small number of home sellers and intelligent home sellers are putting down their collective feet by refusing to compensate agents in that manner. What do they suggest replace the percentage-based commission? Fee-for-service or flat fee, both of which are more in line with compensating agents based on their expertise and level of effort.

Those receiving the service should pay for the service. The US and Canada are the only countries where, by custom, the seller is expected to pay for the buyer’s agent. This not only results in commission rates up to five times higher than in other countries, but creates needless conflicts of interest between agents, buyers and sellers. These intelligent home sellers would like to see buyers start to pay for the real estate services they use because they understand the only way buyers will ever receive expertise they can truly trust is by paying for it themselves.

Stop working for free. Of all the customs that create conflicts of interest between seller and agent, perhaps the worst is that of the commission which is contingent on the sale of the home. Intelligent home sellers believe that real estate agents should never be put in a position where they can render their valuable services for free. And whether that means putting up a small, non-refundable deposit, or paying them as they go, intelligent home sellers see this as benefiting everyone. Agents will never have to risk working for free and home sellers will get better advice from their agent who is not put in an all-or-nothing situation.

The real estate industry may have adopted some unfair customs, but that does not mean home sellers have to follow them. And that is exactly what these intelligent home sellers have come to understand. And if enough home sellers become intelligent home sellers, the industry will change. It will have no other choice.

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.

Is This The Beginning Of The End Of Real Estate Agents?

There is a new real estate service called Allre that, according to media reports, lets you buy and sell you home online without a real estate agent. Will this one company put an end to the real estate agent? Not anytime soon.

AllreBut that does not mean this idea is not a shot across the bow of the real estate industry. The way that Allre is conceived, it is nothing more than an advanced-technology FSBO (For Sale By Owner) service that lets you conduct the entire transaction online (without the aid of an agent). Twenty years from now, when the millennials are doing most of the buying and selling of homes, I predict most home sales will be FSBO. Millennials live online and expect everything of importance to occur online. But until then, the world of boomers has spoken loud and clear: we hate the thought of selling our own home.

Without finding some way of partnering with, or leveraging a relationship with, services like Trulia and Zillow, who own most of the buyer eyeballs, Allre will be relegated to an inconsequential service in the near term. But that does not mean that they have not hit on something important.

With Allre, the entire transaction takes place online, including loan approval, title, escrow, etc. This use of technology to make the transaction seamless reduces—but does not eliminate—the need for real estate agents. And that is how it begins. Over time, buyers and sellers will come to realize they need agents less and less to buy and sell a home. And they sure as heck will not want to pay them thousands or tens of thousands of dollars for their reduced roll. This will not happen over night, but it is inevitable. Technology will slowly erode the importance of the real estate agents and their commissions. Trying to maintain the status quo is nothing morning than milking a cash cow. Eventually the cow runs out of milk.

What will real estate services of the future look like? I predict there will be two main services. There will be showing services—that let buyers into the home to see it—and there will be transaction management services, that make sure the transaction proceeds smoothly and that neither side gets hurt.

While Allre certainly will not have a meaningful impact on the real estate industry in the short term, it does serve as a pretty good crystal ball for what it will look like in the long term. There were a lot of search engines before Google and there were a lot of social sites before Facebook. The tipping point in the real estate industry is coming. Get ready.

 

To learn how to keep more or your hard-earned equity when you sell your home, check out The Intelligent Home Seller eBook and The Intelligent Home Seller eCourse.