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Why FSBO fails
For Sale By Owner (FSBO) is popular in America and the UK and where up to 30% of properties are sold without the use of real estate agents. The trend is on the increase in Australia where it is also known as private sale.
Many homeowners however try the FSBO route to sell their home with no success. Eventually these owners turn to their local real estate agent to sell their property. Real estate agents know this to be the case, which is why so many try to contact owners who are selling their own home.
The difference between a successful and unsuccessful private sale comes down to the attitude of the owner. Too many owners are greedy or have unrealistic expectations of the amount of work that will be involved in selling their own home.
Professional valuation
Valuing a property for sale is one of the hardest parts of the sale process. At www.smartvendor.com.au we recommend that owners obtain a professional valuation of their property.
A valuation from a professional property valuer is different from a valuation that a real estate agent may give you. Often the real estate agents value will be inflated to try and get the owner to list with the agent. Once the owner is locked into a contract of three months or more the agent will work hard to lower the owner's expectations and persuade them to accept a lower price. This is a process known as conditioning.
A professional valuer has no reason to inflate the value of your property as they are paid a set fee irrespective of the property's value. Professional property valuers are also legally accountable for the valuation that they give you.
If owners are greedy and ask more than their property is worth their home will stay on the market unsold for months. In falling markets such as the current Australian real estate market overvaluing a property can cost the homeowner thousands of dollars. All the time a property sits on the market not selling due to its over-inflated asking price the true price of the property is falling.
It is often the case that buyers are better informed than sellers when it comes to property values. Buyers may see many properties a week and will be undertaking formal or informal market analysis by comparing the properties that they see against each other. We encourage owners to get out and visit other properties to see how their home compares to others that are for sale.
Lack of marketing
Too many owners think that all they need to do is place one online advert or place a for sale sign in the front yard and buyers will be knocking on the door offering the full asking price.
Whilst it is true that some properties do sell in this way for most homeowners a combination of marketing techniques will be required.
The Internet is an amazingly powerful tool when it comes to real estate. Homeowners are able to post a description of their property complete with pictures on the web for potentially millions of buyers to see. Buyers are able to search for properties any time of the day or night and make a shortlist of properties that they are interested without even leaving the house.
But not all buyers find homes this way, many drive around neighbourhoods that they are interested in searching out "For Sale" boards, others find properties through flyers posted at local stores.
If a homeowner wants to achieve the best price in the shortest amount of time then they must advertise to as many buyers as possible.
Real estate agents do not use only one medium to advertise client's properties; FSBO homeowners would do well to learn from their example. Homeowners selling their own home should think about how much advertising they could buy for the amount of commission that they are saving. Spending just 10% of the saved commission would massively increase the chances of selling their property.
Poorly presented homes
Having got a potential buyer to view the property many sales are lost due to the poor presentation of the home.
Buyers often lack imagination when it comes to seeing a property's potential. Sellers need to make it easy for buyers to appreciate the good aspects of the home. A good spring clean, a fresh coat of paint and basic maintenance can make a home much more appealing.
It may be time consuming preparing the property for sale and showing interested buyers around but owner must be prepared to invest some time and effort if they want to sell their home for the best price.
FSBO can be a great way for owners to sell their property. The savings in agent commission are significant and many owners report that the whole process is less stressful than selling through an agent as there are no conditioning pressures.
Selling your own home does involve a certain amount of effort preparing the property for sale and dealing with buyers. If an owner is not prepared to put in some effort and to advertise to as many potential buyers as possible then they may be better off listing with a real estate agent.
Nicholas Butler is part of the smartvendor.com.au team
smartvendor.com.au is committed to providing Australian homeowners a value for money alternative to traditional real estate agents
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