For Sale By Owner - FSBO Home Sellers Savings Money in Real Estate

Selling your home for sale by owner - FSBO - just got a whole lot easier.

Selling a home for sale by owner has always meant big savings over traditional real estate agents. But, studies show that the vast majority of home sellers who have tried going FSBO ended up listing with a tradtional real estate agent. Why such huge fallout and how can you increase your odds of success? First, we've tried to round up a few of the more important culprits working against the private home seller:

• Pricing - apparently most For Sale By Owners (FSBOs) just aren't objective when it comes to pricing their homes. There are so many emotions wrapped up in home ownership that's it's difficult to accurately determine the market value of a home without professional assistance.
• Exposure - with just 1 property to sell, For Sale By Owners - FSBOs - simply can't afford to generate enough interest in a home for sale. By contrast, real estate agents have hundreds of properties to sell. They can afford to advertise because they know if the potential purchaser doesn't buy the home they advertise, there's a good chance they can sell them another from their huge selection in the Mutliple Listing Service (MLS).
• Patience - the average For Sale By Owner gives up after just 2 -3 weeks. The mantra seems to be something like this, "we'll try it for a few weeks, but if it doesn't sell right away, we're going to give it to a real estate broker. " While it's certainly understandable that a home seller wouldn't want their home to languish on the market, (especially with the neighbors watching) more than half take more than 30 days even when listed with Realtors®.
• Experience - without real estate selling education or experience, most home sellers are simply unprepared for the real estate marketing and transaction process. Situations that appear routine to the experienced real estate professional can seem daunting and perplexing to someone not accustomed to the home selling process.
• Buyer Reticence - most buyers don't want to deal directly with an owner. Studies show that over 75% of home buyers use a real estate agent for their home purchase. The reason is that buyer's don't perceive that it costs them anything to use a Realtor because the seller generally pays the commission. Add to that the fact that FSBO properties are just generally more difficult to find because they're not listed in any well-known repository for homes for sale information like the MLS and you can see why for sale by owners are missing out on 3/4 of the market.

So what's the answer for a by owner home seller who wants to save on the commission?

Flat fee MLS offers for sale by owner home sellers the best of both worlds. A relatively recent entry to the real estate brokerage industry, a flat fee MLS listing allows home sellers to place their property in the Realtor MLS and on Realtor.com for an upfront fee (usually in the $500 range) instead of paying a whopping 6% commission at closing.

A flat fee MLS listing allows a home seller to lower their price and still, maximize their net return. Studies show that a MLS listing increases the odds of selling a home by providing the highest marketing exposure possible. Higher exposure means a greater demand and consequently a higher price. 

Here's how it works: Instead of listing with a traditional broker, find a flat fee broker offering MLS entry only listing of homes for sale. (for a nationwide listing of flat rate brokers visit www.Bloomkey.com). A flat fee broker will enter your property into the Multiple Listing Service in your area where it can be viewed by all of the real estate agents as well as their buyers. If a buyer's agent brings you a buyer, you pay them 1/2 of the normal commission amount, generally around 3%. For every $100,000 of your sales price, you save approximately $2,500. That means on an average $200,000 home, you can lower the sales price by about $5,000 and still net the same amount of money from the sale as if you had used a traditional real estate agent. Of course, all other factors being equal, a house selling for $195,000 sells before one selling for $200,000 in any market.

If you're not ready to go the For Sale By Owner (FSBO) route, most flat fee brokers also can provide additional assistance for marketing, contract preparation and transaction management and closing. Flat fee MLS also provides significantly higher marketing exposure than FSBO. The reason is simple - most buyers go to real estate agents using the MLS to purchase a home. In fact, the most recent comprehensive study showed that over 75% of home buyer's use a real estate agent when purchasing a home.

There's usually little risk with flat fee MLS listing too, as many flat fee brokers will credit your upfront fee back if you allow them to refer you to a traditional real estate agent, should you change your mind down the road. It's truly the best of both worlds. All of the exposure of a traditional real estate listing without the cost, or even the risk!

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