Posted by: rgmorgan | August 13, 2009

For Sale By Owner a Great Idea?

A dear friend and fellow Keller Williams real estate consultant recently told a story about his experience of trying to sell his house by himself before he was in the real estate business. I thought this was too important not to share. Read below to share his experience:

For Sale By Owner – Great Idea!
Here is my real life story and I’m sticking to it regardless of how embarrassed I am to tell it. I was a very busy business person in my life before real estate, Mary and me and our two little Yorkie’s, living in the mid-cities area of the Dallas Fort Worth Metroplex. We decided after selling two previous homes through a Realtor that we were definitely going to save the commission on selling our house and just put a “For Sale By Owner” sign out in the front yard. Even though this was a few years ago the Internet was just brimming over with knowledge about home values so I did my homework including actually going out on a weekend or two to see what homes were selling for in my neighborhood. Armed with what I thought was a wealth of information, I went to the hardware store and bought my yard sign. I was so proud and confident (not to mention the excitement about those commission dollars I would be saving) that I would be having people calling and almost knocking down my door to buy our wonderful home! After all, the process when we sold our other homes was so simple, the Realtor came out and looked at our house, made recommendations on what we needed to do to get the house ready, suggested a list price, calculated our net after our expenses, put the sign up, and we waited for our phone to ring from the agency with showing requests. It was only a short time until the phone did ring and even though I was out of town, Mary had plenty of notification before someone would be there to show the house. She did not want to be there when the agent showed the house so they put a little box on the front door with our key in it so we could be gone. In both cases, the agents showed the house to people that were qualified to buy the house financially but also to people that had already said that a home with the amenities we had matched what they wanted. It did not take long for the agent we listed the houses with to bring us a contract. In addition they brought us a net sheet showing an estimate on what we would net on the sale at the offering price. I can honestly say that it was because of just how easy that process went that I had the idea of selling the house ourselves. Now for the rest of the story: Mary and I discussed our next steps and decided that we would put the telephone number of the house on the for sale sign which I did Sunday afternoon. We agreed that since I was leaving town Monday morning she would call the local news paper to put an ad in for the next Sunday. We worked together to list some of the amenities of the house so that when people started calling off of the sign she could answer with some level of confidence. We also created a Powerpoint slide that she would take to a copy place to have color copies of a flyer that would be in a box on top of the for sale sign. Off I go the next morning leaving Mary with the few things to get done to get the house sold so we could move on to our new home. Well, not so fast Mr. FSBO. Mary called me in a panic the very morning I left telling me that she had some guy come to the door wanting to see the house. Needless to say she was a little nervous about letting someone just come in and look at the house while she was alone. I asked her what she has done and she indicated that she told him he would have to come back when I was there which would not be until Friday. She also said that while she was gone to get the flyers made the answering machine had recorded several calls from people wanting to come and look at the house. She said she was reluctant to call any of them until I was home so I could try to see if they were really serious or just wanting to look. I asked her to give me the names of the people that had left messages and that I would call them back that evening. I was able to get in touch with two of the three people and as surprised that one was really a guy wanting to see about providing moving services and the other was thinking that our house might be in her price range which turned out to be about $50m less than what we were asking. The remainder of the week went basically the same way with Mary calling me with names and numbers and asking me to prequalify them and set up showings when I got home. She continued having various types of people just come to the door and if she was not there leave notes for her to call. I can only tell you that my very first call when I got home that week was to the same Realtor that had sold our last house and was never so relieved to see a real estate sign in my front yard. Ended up we sold the house for more that we were asking which certainly helped offset the commission we paid for the peace of mind our Realtor brought to Mary and me. Now that I look at the business from the side of being the Realtor and not the seller I think there are many reasons for using a professional to sell my home. Security is probably at the top of the list. I also think you have to look at the why would someone want to sell their own home and I think the biggest reason for that is to save the commission. If you say that then you have to look at the reason a buyer might buy a for sale by owner and it is my view that they are trying to save the commission, the same commission you are trying to save. If you think about that, it just can’t happen that you both can save the commission. If you add it all up, the money you are trying to save and the risk of having non-qualified people walking through your home as a For Sale By Owner may not be such a great idea.
Posted by Rod Reynolds at 9:06 AM
Thanks Rod for sharing your experience.

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