• For Home buyers
  • For sale by owner

    Technically all home for sale are being sold by the owner but in this article here on my blog I am referring to homes that are being sold without the help if a real estate agent.

    Buyers need to understand that the sellers of these homes are not always motivated and sometimes they are just kind of trying things out to see if their home will get some inquiries. Sometimes the homes are not really for sale at all and occasionally I call a seller who doesn’t know that his home is for sale.

    Sometimes the seller is a delightful individual who has the home priced just right and the flexibility to allow buyers to see the property with their real estate agent. Motivated seller usually won’t ban real estate agents from the property they just don’t want to pay a listing agent but will often pay a buyers agent.

    I can tell how serious a home seller is by the questions they ask. They may ask me if the buyer I am working with is pre-approved and ready to buy. They may ask me if I have ever sold a home in the neighborhood or in the building. Some will ask me what I think of the price or for some tips on what should be done to get it ready to sell.

    If you are a buyer and are working with a real estate agent they should be able to help you buy homes that are not on the market or that are being sold directly by the owner.

     

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    Victorian

     

  • For Home Sellers
  • Confessions of a FSBO, Part 3

    1599junoBy Erik Hare

    In earlier entries, I outlined why my beloved Cristy decided to try to sell her townhome as a FSBO, or more accurately with a limited-service REALTOR, and how it went for her. The short answer was that it didn’t sell, and now has tenants renting it out. But it still is better to sell it, and with spring approaching it’s time for another round.

    This time, she elected to go with the most creative and hard working REALTOR in the city.  I’m talking about Teresa here.  No, this isn’t a test for her, and I don’t want to report all the details of how Teresa sells a place.  Besides, this is an unusual unit – one bedroom side-by-side townhome that is a bit small, but with a lot of great features and a great neighborhood. If we learned one thing from before it was how tricky this was going to be. As is true with so many FSBOs, eventually it was time to go with the pros.

    The reasons were many.  Not only did the last attempt not work, the situation with tenants makes it all a bit more complicated. Teresa explained the lockbox to the tenants so that they feel secure about REALTORs coming in for showings. The tenants also have 24 hours of notice before a showing. Getting all this to work properly has a lot to do with the fact that Teresa knows tenant law.

    In addition to all the tenant stuff, Teresa has had a few very creative ideas for marketing the place.  There’s a great phototour of the place on its own website.  Teresa also provided a lot of information to help price it appropriately, and could give reasonable estimates of how long it might take to sell with existing market conditions.  Most importantly, Cristy likes not having to spend her weekends doing showings to buyers that aren’t pre-qualified.

    How will this work? Well, it went live on March 1, just in time for a big snowstorm. But the season of selling is on us, and we will just have to see how it goes.  It’s not a market for the impatient.

    The first report is that it is very refreshing to know that these details are being handled as professionally as they are. Will a REALTOR be worth the commission? Certainly, a sale is worth more than not having a sale, so the answer is likely to be a resounding “Yes!” if it goes anything like we plan.

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  • For Home Sellers
  • Follow up on confessions of a FSBO 2

    Soldkw Some comments on Erik Hares two part post on being a FSBO.

    In general Erik and Christy have not experienced all the services a good REALTOR should provide and do not know what they are missing so it all seems fine to them.  We do more than provide a for sale sign, an MLS listing and advertising on Craig’s list.  Those three are a great start but I can think of at least eight additional ways that I advertise my listings.

    The buyer leads  from Craig’s list and from the for sale sign seldom buy the home they saw advertised.  They are often in the early stages of home buying and are not pre-approved and have not looked at enough homes to be ready to buy one.  They do buy homes but usually a few months after their initial contact with a REALTOR,  and almost never buy the home that they called about in the first place.  Not all leads are equal.  These leads are valuable to me  because I am a full time agent and can find them a home, but are not so valuable to my sellers.

    As for open houses, the main purpose of an open house is to give a REALTOR a chance to meet people.  I occasionally sell a home at an open house but on average about 3% of all homes sell because of an open house.

    I believe that Christy and Erik will sell the townhouse if given enough time and think that it is a smart strategy to rent it out while they are working on it.  It will take them longer to sell it  than it would take me,  because selling houses is my full time job, I have access to more marketing resources, I spend more money marketing homes and I have more experience.

    If they do decide to list with me next spring I will bring them a detailed marketing plan, that will contain many items that they may never have thought of.   Maybe I will even been able to convince them to write a post about it. 🙂

     

  • For Home Sellers
  • Confessions of a FSBO, Part 2

    1599junoBy Erik Hare

    In Part 1 of “Confessions of a FSBO”, I told the story of how Cristy and I found ourselves in the position of selling a property before it had appreciated significantly in value.  We considered the possibility of selling it FSBO, and found that through a local minimal-service REALTOR this seemed to be a viable option, if not technically a FSBO.  So how did it turn out?

    To start with, this is a difficult market for a small townhome.  As attractive as this house is, it’s still small and rather unusual.  Teresa has reported here how it is indeed a buyer’s market, especially for condos and townhomes, so we had our work cut out for us.  On July 17, it went up live.

    The MLS listing that comes with   Buy Self Realty was, without a doubt, the most important source of interest, which we kept track of by counting showings.  In the first two months, there were 2 open houses and 22 showings, of which 12 came from REALTORs.  The minimal fee REALTOR was absolutely essential, as far as I am concerned.  There were an additional 5 showings that came from the Craig’s List offering, and another 5 that came from people who walked by and saw the sign.

    That’s quite a lot of interest, especially in a tough market.  But it is an unusual property, and we had our share of the curious.  Sadly, though, it has not sold in the 3 months it has been listed, even with all of these showings. 

    The Craig’s List offering had the most interesting side effect, however.  Even while it was listed as “for sale”, inquiries about short-term rental dominated the contacts we had.  The people who called or wrote were generally listed in short-term (6 months) or very-short-term (week by week) rentals, and were willing to pay reasonable prices for it.  Apparently, few apartments are available for less than a one year lease, which can be quite a burden for people.  In addition to that, business people on temporary assignments or couples waiting for their home to be built can find very little in the way of week-by-week housing. 

    Once Labor Day came, we made a decision to take some of these renters up on the proposal.  And the house has now been occupied ever since, excepting one week, at a rate that just covers the mortgage and utilities.  The property is essentially “parked” until after winter, although it’s still listed and the sign is still up. 

    Have we gone to Teresa on hands and knees, begging her for help?  Well, let’s just say that we’ve had a long conversation with her, and leave it at that. 

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  • For Home Sellers
  • Follow up on confessions of a FSBO

    Fsbo_large_graphic Some people thought I had lost my mind for publishing yesterday’s post, "Confessions of a FSBO, Part 1".  It is no secret that people can sell their own home without being represented by a Realtor®, so I thought the article was a good one because it explores an alternative ways of selling a home. A home is often a person’s most expensive and valuable asset, as such buying or selling a home is a huge and important step.  Sellers should have options and they do.

    The home owner in yesterdays post is not a FSBO, if FSBO means for sale by owner with out representation by a Realtor®.  The home is listed with a Realtor® who charges a flat fee.   Only persons with real estate licenses who belong to the MLS, can list homes on the MLS.  Being a member means that the individual must also be a Realtor®.  They are simply giving the consumer the alternative of paying a small fee for a sign and to have their property listed on the MLS.

    The seller is also agreeing to pay a commission to any Realtor® who brings in a buyer.  When a home is listed by a full service agent it works the same way, we split our commissions with the buyer’s agent.  In this case the sellers are paying 2.5%.  When I list a home I am required to set it up so the buyer’s agent gets paid 2.7%.  If the sellers find their own buyer they will not have to pay the buyers agent.  They are actually competing with at least 10,000 local agents, who have buyers.  It is likely that they will have to pay one of these agents.

    Sometimes these discount and flat fee companies mislead buyers and sellers into thinking that the property is being sold by the owner with out a Realtor®.  There is one local company that has some particularly nasty anti- Realtor® propaganda which misleads consumers because they are Realtors®, and belong to the same local board of Realtors® as I do.  Since the information is not exactly false, but not really true either, but considered advertising it is allowed.

    The seller will incur the regular closing costs when the home sells.  Some of the flat fee and discount service providers help with the contract once the purchase agreement is received.  If a buyer’s agent writes and offer he or she will be doing the bulk of the paper work involved in the transaction. 

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  • For Home Sellers
  • Confessions of a FSBO, Part 1

    1599junoBy Erik Hare

    Since this blog is read by REALTORs, and the general public,  I thought it might be enlightening to tell you a little bit about why someone might not want to have a professional representing them.  More importantly, I think that the conditions of the market might make this a bit more common in the coming years.   No matter what, I think professional should have a window into how people make the decision to go the hard road of being a FSBO.

    In Part 1 of this two-part story, you’ll see why a person chooses to be a FSBO.

    My partner in life, Cristy, recently moved in with me.  In a situation like this, one of us had to sell the real estate they have.   For us, the choice was Cristy’s smaller townhouse in Highland.  It’s a beautiful property, with a fireplace and hardwood floors.  But it is a bit small at 690 sq ft and just one bedroom.  In short, it’s a unique property that isn’t all that easy to market.

    The only problem is the simple fact that Cristy didn’t intend to sell it after just two years of ownership.  That isn’t long enough to have an appreciable gain in equity, especially in this market.  The commission that a REALTOR would charge would put the whole sale at just a bit of a loss – something that just about anyone would like to avoid.

    We all know that Teresa made it clear that you should not buy a property if you do not intend to hold it more than a few years for just this reason.  However, many people have been doing just that as a lot of amateurs went against this blog’s sage advice.  The problem that Cristy and I found ourselves in, unwittingly, is one that I think more and more people will be in over the next few years.

    So what can you do?  Well, the best advice on how to be a FSBO comes from the Attorney General’s office, in their “Home Seller’s Handbook”.  There is a lot of advice as to what it takes to sell a home yourself, and is required reading for any potential FSBO.  For us, it came down to this advice on Page 5:

    If you’re not under any time constraints, you might want to give selling your own home a shot. If you fail, you can always hire a real estate agent later.

    Cristy had a natural bias against hiring a REALTOR, as her last home sale did not go quite as well as she had hoped.  The REALTOR she hired was not as aggressive as Cristy would have liked, and didn’t seem to really earn the commission she eventually got.  In addition to that, Cristy is the kind of person who takes out her frustration by learning more about the situation, and wound up very well versed in what happens in a real estate transaction.

    The final straw, to her, was learning that a FSBO can get six month’s of access to MLS for as low as $399 through a licensed broker that provides a minimal service.   This also includes a nice sign for the yard – and requires you to return calls within 2 hours, 9-5 Mon-Sat!    In addition, a lot of property is listed in Craig’s List for free, which seemed like a reasonable addition to our own marketing. 

    Personally, I still thought it was pretty unreasonable to sell it ourselves, but the proviso that we could always turn to Teresa later and beg for help convinced me to go along.  We were making our first compromises as a new couple!  So how did it turn out?

    Check back on Wednesday, November 8, to find out what happened in Part 2.

    More pictures and information on the townhouse