This topic has been on my mind because of the wild and wacky real estate market in which we find ourselves today. Homes are flying off the market so fast, I joked with a colleague that if the house is at least standing, it’s sold in 5 minutes.
Sellers are clearly in the driver’s seat – the result of a “perfect storm” of circumstances. First, mortgage interest rates continue to be at all-time lows, encouraging home-buying. Second, the number of people working and studying from home is at an all-time high. As they do so, they’re realizing their current living situations may not meet their space and layout needs going forward, especially if working from home becomes a more permanent, rather than temporary, way of life.
Real estate experts note that since the pandemic, people want homes not just with more space, but with private spaces for home offices or eLearning centers. They want space for an in-home gym, and outdoor space for gardening or just enjoying the fresh air.
The result? A seemingly endless supply of eager buyers up against a very limited supply of homes for sale. In fact, the number of homes on the market today is fully half as many as in 2015, according to Altos Research.
In such an environment, homeowners might believe it’s a pretty easy thing to sell their homes by themselves – to go FSBO (For Sale by Owner). What’s the big deal, anyway? I’ll decide an asking price, put a sign on my front lawn, take a few pictures and post them on Zillow. People will call; I’ll get a buyer, and save big on commissions. No muss, no fuss.
If only it were so. A homeowner may well try to sell his home as a FSBO, and he may well succeed. But here’s what a FSBO cannot do.
A FSBO cannot give a home the wide exposure a Realtor can. He cannot make the home “go live” not only on his local MLS, but on hundreds of websites across the country – to reach relocation buyers, for example – including Realtor.com, Homes.com, Zillow, Trulia and many more. He cannot share his listing via a network of local realtors who help each other identify buyers they’re working with who may want just his type of home. He cannot send out a “property blast,” that reaches the thousands of realtors who belong to his local MLS. This kind of exposure – both online and off – results in a huge amount of interested buyers, which results in a huge amount of showings, which results in multiple offers and bidding wars.
Here’s a personal example. Last Thursday, I put a home on the market, and stated that offers would be accepted until that Sunday at 6 p.m. Over those 3 days, there were more than 25 showings. On Sunday evening, the seller had four offers in hand. All were over asking price. One had an escalation clause, stating the buyer would pay $1000 over the highest offer received, up to a certain $$ cap; one had an “As Is” addendum, stating the seller did not have to make any repairs an inspection might reveal.
A FSBO simply cannot accomplish these things because he has no way to generate this kind of buyer traffic.
The seller chose to accept the cash offer. It also happened to be the highest offer. The buyer waived appraisal, waived a property survey, did not ask for closing costs or a home warranty. We call that a “clean” offer, one which is very easy to accept.
All the things a Realtor can achieve that a FSBO cannot are things which also bring the homeowner more money, less hassle and a much smoother transaction.
I would be remiss if I didn’t include the additional benefits of working with a Realtor. They go well beyond the price a Realtor can help you achieve. They include helping you understand how to price your home, through a neighborhood Comparative Market Analysis, which looks at list price, sale price, days on market, price per square foot, updates and the condition of your home versus others which have sold.
A Realtor will also require offers be submitted with a mortgage pre-approval or “proof of funds” letter, if it’s a cash sale. She will manage the inspection process and the buyer’s response to it. From her stable of vendors, she can provide names of professionals who will do any repair work required by the inspection. She can provide names of professionals who will declutter your home for the move, sell items you no longer want. And recommend everything else a client might need – from packers and movers to a place to overnight your pet during the moving process.
All this does not even touch on everything a Realtor does at the front-end of the selling process – such as pay for professional photography of the home and grounds, sometimes including drone shots. And paying for a professional home stager to help make your home as attractive as possible to as many buyers as possible when it hits the market.
Clearly, in the contest between a FSBO and a Realtor, the Realtor wins, hands down.
With apologies to Jack Nicolson, “You need us on that wall.” 😊