In a day and age of instant internet know-how, it’s not surprising that some people decide to forgo the assistance of a real estate agent, choosing instead to list their homes themselves, hoping for a sale, minus the dreaded commission fee.
After all, the worldwide web should be an all-knowing source to any relevant questions and concerns they may have, setting the course for a wonderfully smooth-sailing process from list to close...right?
Commission fee or not — despite the availability of online resources and groups promoting the idea of selling FSBO — working with a professional real estate agent makes such an impactful difference on the entire process that hiring one means sellers walk away with more money in their pockets.
Of course, you, as an agent, already know all of this. But sometimes, convincing potential clients is a different story. We've got 6 things you can ask potential clients to help them reconsider their choice to sell FSBO.
1. How well do you understand the local market?
Despite the availability of certain records online for anyone to peruse, a local real estate professional understands the current market in a way the Average Joe can't just from reading through some recent comparables or neighborhood tax records.
Yes, that information is relevant, but it’s the flesh and blood behind those local transactions that make the difference between a house that sits on the market, and a house that sells for a great price.
The key lies in the business techniques and marketing tactics of a professional agent, accustomed to the local market and in touch with a huge network of other local agents and past clients.
The money question leads us to number two:
2. How do you decide which price is “the right price” to list your home?
This is typically the make-or-break question for any real estate deal. Despite thorough research, the elusive “exact right number” to price a home or property is often a challenge, even for some professionals.
But when sellers try to decide this number without a Realtor, they aren't utilizing all of the tools available to professional agents.
Local experience is one of those tools.
As I mentioned earlier, understanding the local market, as well as demographics and more, gives real estate agents a gargantuan advantage when it comes to arriving at the perfect number.
Through time and experience, an agent also acquires a professional savvy when it comes to computing real estate facts and figures that an owner flying solo just won’t be able to replicate.
3. Are you prepared to navigate offers, counter-offers, and/or several offers at a time?
Let’s assume Mr. Smith puts his house on the market, and lo and behold, it’s going like hotcakes! No sooner was it up for sale than several interested parties started throwing offers at him. Ha! Realtors are obviously not necessary...
Clearly, it’s in Mr. Smith’s best interest to figure out who is willing to fork over the most cash for his home. Pretty simple, right? Accept the offer that has the highest number. Done.
As you know , it’s just not that simple.
Because, if he understood how to read through the offers — including all exceptions and expectations — Mr. Smith would have realized that, even though the offer is significantly higher than the others he received, it is contingent on the sale of the buyer's property, or, on satisfying a seriously in-depth home inspection, or any one of the many “things” that can spell absolute disaster for a deal.
Missing the small print can take a hefty bite out of what Mr.Smith thought would be a clear profit.
There are so many documents that need to be signed, recorded officially, and filed properly.
That alone warrants hiring a professional agent well-versed in all of the requirements that must be satisfied in order to consider a deal legal and binding.
Having a Realtor on board just makes sense.
4. How will you verify potential buyers’ qualifications and ability to secure financing?
Realtors know that an offer submitted by a pre-qualified buyer is likely to be a solid offer. A solid offer is more likely to result in an actual sale, as opposed to an offer submitted by a buyer with no evidence of funds or secure financing.
An offer from a pre-approved buyer? Even stronger.
But, even in the case of pre-qualifications or approvals, money issues can still rear their ugly heads and undo a deal!
Real estate agents understand that receiving an offer is just the beginning.
You work hard to make sure that any tempting offers can be backed up.
Many Realtors request proof of funds, even if the buyer is prepared to submit an Earnest Money Deposit.
To receive that information, the agent might ask for:
- An original bank statement
- An online banking statement
- An open equity line of credit
- A copy of money market account balance
- A certified financial statement
In other words, unless you have the financial know-how and understanding to request, and then decipher, the many documents and statements necessary to determine the strength of an offer, you are at an extreme disadvantage.
5. Are you prepared to make less money?
Ouch. That’s a tough one, but it is quite simply the honest truth.
According to a 2017 National Association of REALTORS® Profile of Home Buyers and Sellers:
“Homes sold by owners accounted for 8% of home sales.
The typical FSBO home sold for $190,000, compared to $249,000 for agent-assisted home sales.
89% of sellers were assisted by a real estate agent when selling their home.”
There’s a reason that number is so high. Most people interested in selling their homes understand that the stress of marketing, handling negotiations and paperwork, and verifying financials make the commission earned by a real estate agent a very small price to pay when it comes to walking away with a solid deal.
When the numbers are examined, it’s clear that real estate agents get more money for the houses they are listing than someone selling on their own.
The difference in numbers is more than enough to cover the commission, which is usually the very reason people decide to forgo working with an agent!
6. Do you have enough time and energy?
Selling a home from start to finish is quite a tedious process.
If your potential seller still isn't convinced, emphasize the work that goes into every aspect of home selling.
- In order to understand the market, the seller is going to need to do some serious research. Done properly, this should take many, many hours. Oh, and guess what? The market is constantly shifting and changing, so it’s imperative that the seller continuously search for current information and trends.
- “The Right Price” can be like that mirage in the desert...so close and yet so far away. If the seller hasn’t seen any action, then perhaps their listing price is too high? When should they consider a reduction? How much should they reduce?
- What if they're just not reaching the right potential buyers? Should they increase their advertising efforts?
- Do they have a plan of action on how they’re going to negotiate offers? Considering a huge percentage of offers don’t actually result in sales, they have to navigate the potentially choppy waters of counter-offers and negotiations. It’s tough being the only person handling communications during a home sale.
- They must, according to statistics, be willing to settle for less money selling on their own, than they would working with a real estate agent.
And if they're still on the fence about listing with you, give them a copy of your self-authored real estate book. Being a published author gives you instant authority most other agents can only dream of. But writing a book can be time-consuming and quickly make a dent in your wallet.
Find out more here.
I’ll leave you with this handy tidbit of information:
The founder of a website designed to encourage and support FSBO selling failed to sell his property on his own.
Despite employing all of the tactics on his website, ForSaleByOwner.com, creator Colby Sambrotto wasn’t able to find a buyer for his apartment — not until he enlisted the help of a traditional real estate professional.
Mr. Sambrotto even paid the standard 6% commission after his two-bedroom New York condo sold for $2.15 million.
