The Island Now

Real Estate Watch: For-sale-by-owner mindsets

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Posted: Thursday, September 22, 2016 11:46 am

I have often wondered why do owners of homes, home owner associations, condos, coops or even commercial properties try to tackle the most difficult business of selling, renting and leasing on their own?  

Is it that they feel they can really do the same job today as a qualified, professional, credible, honest and technologically advanced realtor can do?   

Do you think an ad in the local or even broad spectrum periodical will provide you the  market exposure, traffic and qualified purchasers (95 percent of all the eyeballs are on the web)?  

Do you, the typical owner have a website or great social media exposure to promote your properties?  

Can your properties be found on the first page of Google,(85 percent of all searches) Yahoo, MSN or any other major search engine?  

If the resounding answer is “no”, to most of these questions, then why then do you continue to feel you can perform this most arduous task?  

My personal feeling and observation in conversing and discussing this topic with way over a thousand plus owners over the last 35 years (23 as a full time broker and 12 as an investor) are varied, but there are several crucial reasons that I will share with you.

1. Owners feel that they can save the commission.

2. They have the experience from previous sales over the years

3. Have had poor or less than stellar experiences with a realtor(s)

4. Need to retain as much of the profit, (assuming there is enough, depending on whether or not you are involved in a pre-foreclosure action or short sale), to purchase the next “place to call home.”

Also, divorces can cause many to consider taking this route too, to try to retain as much money as possible, for both parties. (Both husband and wife, legally may each retain a separate broker to sell their properties, however, verify this with your legal counsel for your specific situation)  Prenuptial agreements, may be an exception, depending on how it was setup.

5. Since the current real estate market is so hot, that there will be a line salivating buyers around the block for your open house.

6. They know how to price their home as well as an experienced broker, because they can rely on Zillow, Trulia or any other online site, as well as seeing what everyone else is pricing their homes.

7. I can use “For Sale By Owner” sites at a flat rate and negotiate on my own.

8. I am emotionally strong enough and involved that I can better negotiate on my own than  any agent

Here are my thoughts and answers to the reasons:

1. First off, you will not save any commission, since buyers will factor that out when they know you are not represented by a broker and then they will negotiate further, to lower your price. (Historically, owners will receive at least 8 percent less, on their sale than a qualified and professional Broker will provide.

2. Find a buyer and negotiating today is an arduous and most complicated and intricate task.  

The necessary legal paperwork of agency, lead and property disclosures that are required as well as the required information as to what is included in your sale can many times make or break your deal.  How are you going to qualify your purchaser for income, credit, debt/income ratios, home inspections (will things popup that will have to be addressed and repaired, or CO’s-(Certificate of Occupancy issues) for illegal basement bathrooms, decks, pools or additional rooms, converted garages, etc.  

The appraisal, (will the bank lend based on the sale price or maybe the appraisal will be lower and the buyer will come back and renegotiate your price.  Finally, coordinating the walk thru and closing date and your moving company.

3. All brokers are not created equal in knowledge, experience, credibility, motivation and passion to get the process completed.  

An experienced top-notch broker will usually provide you with these most valuable benefits; but make sure you interview them and see how long they have in the business and also what exposure do they have on the internet?  

Is their website and social media (assuming they have these tools at the disposal) exposure enable them to come up on the first page of Google and other search engines?  

According to Zillow, 80 percent of all agents never call back their customers or clients that they had previously completed deals with! The question is, will your agent communicate and stay in touch with you on a regular basis from the get go?   Today, you as an owner generally do not have the where withal, negotiation skills or tech savvy knowledge and are at a major disadvantage in selling your home, while trying to locate and search out a qualified purchaser.

4. Hiring the best broker should surely aid you in keeping a larger amount of money, since he or she will be better at marketing, negotiating and communicating with you for your specific needs and wants in the sale of your property and following through in the process of digging deep for that elusive buyer.  

We are not emotionally involved in your sale but treat it as a valuable commodity that we need to get the best price with the most qualified and capable buyer, who is ready to purchase.

5. Doing an open house can be a simple or very complicated process; it all depends on who is setting it up and doing it.  How will you advertise it?  

Homeowners can place an ad online, but where?  

You can place a sign out on your front lawn (some villages do not allow this) and where else?  

How will you qualify your prospective buyers who arrive at your home?  

Safety issues will arise with respect to theft or even bodily harm, if you are doing this alone. Will they be casing your home to steal your most valuable possessions that day or at a later time when you are not home?  Do you know who has the income and credit scores to purchase?  

Will you be able to get the phone numbers of those people and if so, will you be in a strong or a weak position if and when you call your open house people back?  When you call, what will those people feel about you with respect to selling; motivated? desperate to get out?

6. The majority of time, Zillow, Trulia and most other sites are not an accurate source for pricing your home and either are ads in the paper, based on what others are pricing their homes for.  

You cannot know the condition of your home, unless an agent has been inside of it.  A professional and experienced broker has the knowledge and resources, through their multiple listing service, to provide you with a Comparative Market Analysis to determine an asking price and projecting a potential sale price.  

This is accomplished by analyzing similar available properties for sale, under contract, sold and expired/withdrawn.  A 10-50 page brochure is usually available by your Broker with the proper tools; so you the homeowner will have crucial and critical information to provide you with a correct asking price.  

Lastly, an additional number of variables about your home, HOA, Condo or Coop or commercial property; as an example, as to what upgrades and renovations have been done in the last 3-5 years, to additionally aid, facilitate  and determine your asking price.  

Visiting your property by a broker will aid in ascertaining this information and documenting what things can be done at a minimal cost to improve outside curb appeal and showing the interior in a better light.

7.  The old adage, “Cheap is expensive and expensive is cheap” is, oh so true in real estate.  

You always get what you pay for.  Professional brokers don’t charge a commission, they truly earn it.  

If flat rate or discount brokers are willing to accept less commission, so you have to ask yourself, what will they do with the price on your home, discount it too?  

Not care as much with what you will receive?  Remunerating the proper fee to the best broker and you will receive the most exceptional service, “before, during and after the sale.”  

When you lease a luxury car like a Mercedes, BMW or Audi, there is a reason why they cost more than other models; it is no different with any other products or services that you seek out.

8. A well trained and knowledgeable broker will provide you many, many years of experience with all sorts of varied situations to handle all your negotiations in whatever situation may arise and know the answers (or will find out the answers) to create a smooth transition from the start of your sale to the final closing.  

The constant training through local presentations and conferences by expert speakers, e.g.  The Tech Fair at The Crest Hollow Country Club on Oct 6, as well as The National Association of Realtors Conference (this year in Orlando Nov. 4-7,) and Triple Play in Atlantic City Dec. 5-8) which I always attend, keeps the best of us on top of our game, greatly benefitting the owners of residential and commercial properties; keeping their knowledge as up to date as possible.  

Ask your realtor if they attend these conferences.  

Only 1,000 show up at our local conference out of 22,000+ agents in Multiple Listing of Long Island and approximately, 25,000 show up at the national conference out of 1.25 million agents throughout the U.S. and of millions around the globe.  

So you imagine who the top “cream of the crop” brokers and agents are; those that constantly strive to be more knowledgeable on the highest level.  

Most important,  some of us pay it forward and give our time (approximately, 150 of us out of the 25,000 attendees), to assist with building and renovating homes through Habit For Humanity in the most disadvantaged areas in and around the cities that the national conference is held in each year.

“Nobody Cares How Much You Know, Until They Know How Much You Care.”

The bottom line, “Do you do your own Dental work or your own physical checkups?  Of course not.   

So why would you try to do what we do?  Because you think you can?  

Not anymore, with all you have to know and do, it has become a task only performed properly by a capable, credible, honest, professional broker.  

If you want to downsize and stay local or leave and begin a new phase of your life in warmer climates, then hiring the best person will be to your advantage in getting the job done.  

As the cold weather and snow arrives, doesn’t Florida or a warmer climate become more and more alluring for those retiring? But if you are looking to upgrade or build your new home, today, hiring the right broker is the only way to go. 

Call me if I can offer you any assistance or answer any of your questions or concerns.

Welcome to the discussion.