For Sale By Owner Homes (FSBO)
It seems like whenever there is a seller’s market for sale by owner homes start popping up more and more. Evergreen Colorado is no different. Sellers believe that when it is a seller’s market they have an easier ability to sell their home. For sale by owner sellers believe that there is only one step in selling a home. FSBO Sellers believe all they need to do is slap their home on zillow in wait for the people to flock to their home. One thing for sale by owner people just don’t seem to understand is there is 1 issue at the beginning that they never consider. 1 of the most frightening things about selling a home is security. When a real estate agent finds buyers they tend of that them and see what kind of people they are they have information they have their cellphone numbers they usually have a lot of information about them. A for sale by owner seller sometimes just takes a phone call and invites the potential buyer and to their home. This seller doesn’t understand how dangerous this is. I don’t even want to mention if a for sale by owner seller has an open house that’s a completely different security issue.
Homes for Sale By Owner FSBO
Oh Boy a For Sale By Owner
Let’s forget about the issue of security for just a moment and move into the more practical reasons why people should not sell their home themselves. Just like most people would never represent themselves in a murder trial they understand that there are professionals that do these things all day long. Real estate is no different a real estate agent understands everything about Holmes skeptic’s whiles easement as shoes marketing your home everything that you can imagine real estate agents have seen done and taking care of the objections or the challenges that arise for any of these issues. The 1st thing to consider about selling your home is the marketing. Real estate agents market homes all the time at least Orson Hill Realty agents do. Of course just like any profession there are Real estate agents that are unable to market homes or do their job properly but that is another issue. For the sake of this article let’s assume you have hired the best real estate agents for marketing your home, Orson Hill Realty.
Marketing a For Sale Buy Owner
The reason proper marketing of your home is so important even in a seller’s market is market exposure. As I always tell my buyers as well as my sellers the market is who determines the value of your home it doesn’t matter how much money you owe it doesn’t matter how much you want for your home it doesn’t matter how much your neighbor says your home is worth it doesn’t matter how much your cousin says your home is worth the market is going to tell you exactly what your home is worth. That is why it is so important to have as many people come through your home as possible. Real estate agents do understand how inconvenient that this could be for sellers but sellers need to understand to get a true sample of the market it is a numbers game the more people that come through the more offers you get in the more idea you have of the true value of your home. This is why proper marketing of your home even during a seller’s market is one of the absolutely most important things you can do while selling your home. Many sellers believe that everyone in the world uses zillow this really is not the case.I have a lot of buyers that come to me that do not use zillow. Also once a buyer comes to me I make sure that they continue to use my website. Most real estate agents do we send them alerts we send them everything possible so they stay on our website. Zillow has lost a lot of its appeal because of the bad and outdated information it provides.
For Sale By Owners are Just Cheap and Who Wants to Deal With That?
Now that we’ve established that doing for sale by owner is not only dangerous but it also cost you money in the long run because you’re not getting a full sample of how much the market believes your home is worth. Let’s move on to the next reason why people should never ever deal with for sale by owner homes. It goes to the mentality of people who do not use professionals and want to sell their home themselves. It shows that not only does that person want to gain the system by asking the same amount as their neighbor that uses a real estate agent and pays the 6% commission it also shows that this person is most likely very very very cheap. So if you think in the context of how long this person has on their home if they’ve owned it for 10 years and they are too cheap to sell it properly do you really believe that this person will put any money in to upkeep repair and general maintenance for their home. With for sale by owner homes we tend to see a lot more deferred maintenance and repairs that should have been done in could have been done cheaply that have gotten out of hand and caused even more damage to the home. Now we think about the person doing a for sale by owner pricing their home where exactly did they get the price for this home that they put on zillow that they use the very inaccurate system of Zestimate. Let’s hope not even zillow admitted at 1 time that there’s estimates could be off by as much as 20% and I have even scenes estimates be off by as much as 30 to 40%. There is no way that an algorithm can tell anyone how much a property is a worth especially here in the Denver foothills where there are no properties that are similar. Perhaps is estimate works well in a condo situation in a homeowners association in Tallahassee Florida where all the properties are exactly the same size same floor plan and same appliances. If you think about it there is no way for anyone to price a home without actually seeing the inside of the home.
For Sale By Owner and the Contacts
Next thing for sale by owners need to worry about, if you are lucky enough to get an offer, is the contract. It isn’t as easy you might think. There is a reason why real estate agents spend 100’s of hours in school then 100’s of hours in continuing education classes. It is because this stuff isn’t easy. There are so many variables and so many what if’s and if the other person has a real estate agent you will need to pay them a buyer co op so you are only saving 3% (or less) to take on the liability that is taken on by the agent if they make a mistake. It isn’t worth the risk when it comes to the serious legal reticulations you could face if you screw it up.
Most Buyer Agents Don’t Like to Work With For Sale By Owners
Homes for Sale Evergreen CO - MLS
Homes for Sale By Owner in Evergreen, Colorado What You Should Know
A Realtor walks into a listing appointment on a home for sale by owner in Evergreen, CO at a price point of about $4,000,000 to $5,000,000. This is not the beginning of a bad real estate joke, it really happened recently. The Realtor thought he would discuss with the for sale by owner (FSBO) owner and see if he could help the seller out. You know do the job a real estate professional does all day everyday. So this luxury Realtor familiar with the area and his team mate go into the for sale by owner’s home. The Realtor has an advantage going into a FSBO because the home is already on the market for a certain price. The real estate agent already knows what the seller believes their home is worth. Sometimes this is good but sometimes bad. In this certain story this was bad for the agent.
For Sale By Owner and Pricing a Home for Sale
The home was absolutely beautiful. Just amazing. Only problem was the seller has it listed for $1,000,000 more than any home in that neighborhood has sold for in the last 24 months. The comparables the real estate agent has found do not support the value of this luxury home. It is in a beautiful neighborhood with amazing views but still the real estate agent that works in the luxury market can still not justify this as the most expensive home to hit the market in the area in the last 2 years especially by a 25% more value. While speaking to the for sale by owner people he gathered information on how the custom home was built and how the sellers came up with the magical number. He expecting them to say “well we know the neighbors home sold for X amount we we calculated the price per square foot and came up with our number”. That is a very fast, easy but not accurate way to find an approximate value. The real estate agent was also waiting to hear “well the Zillow Zestimate was X amount so we used that”. What the agent heard was an even less accurate method than either of those two. The for sale by owner seller said “well the empty lot next door sold for X amount, a good rule of thumb is 80/20, if the lot sold for X we just used the two numbers and came up with a price”. The real estate agent was left pretty speechless. Knowing this is a formula investors use for costing new builds to see if it is financially sound to invest in the land and with the final build price. This is not how you value pre-existing homes. This formula is not at all a way to find value in a home. There is a reason why a bank uses an appraiser and not this type of calculation. A seller needs to find comps! There is no other way to find value in a home. The market does not care what you want or what you need to get out of your sale. The market certainly doesn’t compare your existing home to the empty lot next door and value it that way (unless you were selling it as a scrape).
The real estate agent changed the subject off that one because how does a Realtor explain to someone that their way of pricing their luxury home was about as accurate as asking the mailman what he thought it was worth?
Paying the Buyer Agent When You List For Sale By Owner
The next topic was the willingness to pay a buyer co-op. Meaning if another Realtor brought them a buyer that was willing to $1,000,000 over what the home was valued, how much of that cash would the seller pay to the agent? The seller simply replied “I’m not paying the buyer’s agent, the buyer can pay for his own agent”. This brought up an interesting fact that the agent thought most people would know. There is a little box on the buyer agency contract. This box says something to the affect “if seller does not pay commission, buyer will pay”. In 8 years of writing buyer agency contracts this agent has never, ever checked that box or ever even thought about it. This agent has never heard of any agent checking that box. The agent even called around to his broker friends and asked if any of them ever checked that box. None of them have. It is not often that a buyer pays the commission. Technically the buyer always pays the commission because it comes out of the money that he brings to purchase but the FSBO seller basically stated this money would not come out of the purchase price even at a full price offer.
The way it works is let’s say a home sold for $1,000,000. The seller gets a full price offer. Not including closing costs and such, to keep it simple, if the total commission for both agents in 6%, 3% goes to buyer agent and 3% goes to seller agent. This for sale by owner thinks that the buyer should pay $1 mil plus $30k for a total of $1,030,000 for the home. That is simply not how the real world of real estate works.
For Sale By Owner with Luxury Homes Evergreen, CO
This is why people thinking about selling their home for sale by owner in Evergreen or Denver should really think twice. If it is a luxury home that it takes a professional real estate agent an average of 200 days in this market to sell your luxury home then you should really think twice. If a seller prices their home without even looking at existing home sales comps, you should contact a luxury real estate agent. If a FSBO is unwilling to pay a buyer co-op, and almost all buyers have representation because they know it doesn’t cost anything, you should talk to a professional real estate broker. If a seller knew that on the average a for sale by owner home sells $190,000 and a home sold by a real estate broker sells for $240,000 then they would most likely not sell their home without a real estate agent.
Safety Issues with For Sale By Owner
One more issue regarding FSBO, how does a seller vet the buyer? Is this person coming to look at your $5,000,000 home just coming to case the place? Are they even qualified? Are they just wasting your time? If you are only bringing in people that don’t have a broker because most brokers aren’t going to show your home if they aren’t going to get paid, and most buyers aren’t going to want to pay their broker to buy your home since there are other homes out there that aren’t as difficult to by as that FSBO.
For Sale By Owner and Contract Issues
There are also many problems that might arise during the buying and selling process with the contracts and legality of multiple issues. These issues are things that a seller would never know as far as disclosures, LBP, wells, septic and about a hundred other things that could arise that they do not know how to address since it is not their job to know. Everyone thinks selling a home is the same as selling a bicycle and it is not. You could end up costing yourself a lot more money in the long run by leaving yourself open to a lawsuit or damages just because you didn’t understand the contracts.