Homeowners are often do-it-yourselfers, so it's not surprising that "For Sale By Owner," or FSBOs, has become popular. However, a homeowner who chooses the FSBO route over working with a realtor may have more troubles making a sale at the best price. Here are some things to consider to help you figure out whether it's in your best interest to work with a realtor or go FSBO:
1. How do you determine the right selling price for your house?
There's a big difference between the market value and the assessed value of a home. A realtor works anywhere from eight to twelve hours a day doing various tasks that give him or her, a good idea of how long it will take a property to sell. So in reality the do-it-yourself house seller is at a disadvantage but still there are many who will to take on the second job of preparing and selling their home. The factors involved in determining the market price of a home includes examining the price at which other similar houses in the area sold for, finding out how many other houses in the area are on the market and what they are selling for, deciding how much time one will can wait to move to your new home and more. The timing issue is an important concern because it cost more to insure and empty house and most people have to sell the old house in order to purchase the new one.
2. What's the real cost of working with a FSBO company?
Some FSBOs actually charge as much or more in fees than a broker would make in commissions! For example, I had one prospect explain that they were FSBOs but were willing to work with realtors. This prospect said they were giving realtors six percent commission and had paid a flat fee to their FSBO company. When I checked the listing what was going out to realtors was 2.5% to the transaction broker and 2.5% buyers' broker. There was one percent unaccounted for. I wondered if the FSBO company got a flat fee from her and an additional one percent commission. Also this particular prospect state she did not have a realtor helping them but one was one listed. If as a FSBO they were doing all the realtor work, why did they have a transaction broker listed and was he going to get a commission on the work they did? All of this is to say there are no short cuts and in the real estate business or in life, one gets what one pays for or works for.
3. What incentives are you willing to offer realtor to work with you if any?
Incentives, in this case, mean the commission you will pay realtors to bring buyers to your house. If you decide to work with realtors, you need to know what incentives are in your area and you need to know what percentage you have offered. Know exactly what you are paying for from your FSBO company and what services you will receive for your dollars.
4. What tools will the FSBO company make available to assist you with the sale of your home?
Learn to work with the tools realtors use to help make sure all the I's get dotted and the T's get crossed. One of the tools realtors use is the Pending Sales Index (PSI). The Pending Sale Index is based on the number of signed contracts in a giving area. There are other indicators but the PSI is a good indicator of how homes sales are going in any given month. Looking at the numbers for the month of April is a good way to determine what the market is doing and comparing that to pervious months or years – well you get the general idea. National Association of Realtors (NAR) said the index for April fell to 106.7 and was 9.3 percent below a year ago in the Northeast.
What this means timing is everything. The market is steady but houses take longer to sell. They are not bring the closing prices of a year ago either. There are exceptions but the trend is for the above. Determining the correct selling price is essential.
NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey
