This article is about FSBO’s. FSBO’s stand for “For Sale by Owner” properties. As one of the most visible real estate brokers in the real estate market in India we are approached all the time by property sellers who want our services to sell their property. Most of the property sellers who contact us are contacting us in the initial stages of deciding to sell their property. There is another percentage of people who approach us to sell their property that has been on the market for a long time but has failed to sell. In short this set of property sellers turn to us in the hope that we will be able to do what the other brokers in the market could not – sell their property! Let me remind you through our blog though that selling a property that has been on the market previously is a much more difficult proposition than selling a brand new listing.
When such property owners come to us, we remind them about this fact because it will require extra time, effort and work to now sell this property. It really does take special talents and tools to sell such properties because as we have said earlier (read this article), a property that has been on the market for 6 months or longer without selling has become “tainted”. Most potential property buyers in the market and real estate agents have already seen it and dismissed the property. So it is extremely difficult to convince serious buyers who were considering it earlier to reconsider the property and give it another chance inspite of the fact that the owner is willing to accept a lower price for the property.
When such properties come to us, we explain to property owners the benefits that a professional real estate agency like Gupta & Sen can bring to the table in order to “remarket” the property. Consider the following points that need to be done by us at this point:
- Analyze why the property did not sell in the first place so the sellers can avoid making the same mistakes again
- Create a strategy to make the property seem fresh and new despite being previously exposed in the real estate market
- Correctly price the property so that this time it sells for sure
- Make suggestions such as cosmetic changes to the interiors of the property, using a staging professional to stage the property so that the interiors are presented in the best way to potential buyers
- If it’s a standalone villa or a bungalow offer ideas to make the exterior of the property as appealing as possible
- Create a targeted marketing plan that succeeds in attracting serious buyers to the property
- Suggest possible incentives for other brokers in the market to bring their clients to have a look at the property
There are three key points that one must remember when selling a property that has been in the market before. First and most importantly the property must be priced aggressively so that the property is seen by as many potential buyers as possible who are seeing it either for the first or the second time. Next it is our job now to make the property seem fresh and new on the market with creative staging, lighting, renovation etc. Thirdly we suggest that property owners who have failed to sell their property the first time around now offer additional incentives for real estate agents to bring their clients to see the house – such as a higher commission, Iphones, a foreign vacay (you get the drift!)
Educating Property Owners what their Inexperience Costs Them
A lot of times property owners approach us after unsuccessfully attempting to sell their house all by themselves. Let us talk some more on this topic. The National Association of Realtors® (NAR) statistics states that FSBO (for sale by owner) properties sell for 16 % less than similar houses sold by Realtors. So instead of saving the 2 % odd commission that a property owner would save by paying us commission these sellers are losing 14 % by trying to sell the property themselves! Let me explain here the benefits of using a real estate professional to sell your property over trying to sell it yourself. Let us see what a professional and experienced real estate consultant does in order to earn his / her commission:
- This point can never be over-emphasized – Accurately pricing the property before going on sale. I have found that nine out of ten times the properties that did not sell were incorrectly priced in the first place. A different price tag can altogether change the scenario and bring remarkable results.
- Widely marketing the property to potential buyers who live not just in your local suburban neighbourhood, but across the city, the country or in our current world – the entire globe! And why not?! As the saying goes, “If you cast a wider net you catch more fish!” When you have more potential buyers interested in your property you can sell your house faster and for more money. Most small time real estate brokers only advertise if at all in the local neighbourhood. However agencies like ours use lots of modern marketing techniques including digital and social media to cast our net wide so that you attract the most likely buyers for your property.
- Marketing to other real estate agents. The business of selling properties more often than not happens through a network of trusted real estate brokers and associates. A good real estate broker will also ensure that your property comes under the radar of other good brokers in the market. Doing this brings in more potential buyers because a large percentage of buyers use a real estate broker to know to help them find a property. Experienced agents like us even maintain a database of the best agents in every area of a city who represent serious buyers in their respective areas.
- Vet the buyers and leads who have expressed a desire to inspect the property. A background check on the profile of the prospective buyer helps make sure that the buyer has the ability to purchase the property. By doing this the real estate agent ensures that only qualified buyers are allowed to see the property thus saving time and expenses later on if the deal were to get stuck in the final stages.
- Helping clients ensure that all agreements are complied with during the registration of the property so that they meet due legal requirements.
In our experience we have observed that most FSBO’s will not want to list with a real estate agent during the first month that their property is on the market. They are still “new and green” at this stage and are convinced that they do not need your services. All they know is that they will be saving the commission which they do not believe the agent deserves! After a few more weeks have passed and their hunger increases is the time when they usually decide to contact a real estate agent. Perhaps after a month or two of no results is the time when they realize that it wasn’t a good idea after all and they are in more of a listening mode by then.
The point of this article is to demonstrate to FSBO’s the amount of work that really goes into the marketing of a house. Once the FSBO sees the huge volume of paperwork and other work required during the transaction process the owner may change his / her mind after all.
You may think that you are getting a good deal but always remember the old saying of lawyers in the legal community “he who represents himself has a fool for a client”! That saying holds true in the real estate business as well. If a property seller thinks that he can sell his / her property himself the problem is that they don’t know how much they don’t know. So they are not really aware of how much their lack of expertise in this area is costing them! Get Smart. Hire an experienced and reputed Realtor when selling your property!