Between 10 and 15% of all home sales this year will be For Sale By Owner, without the aid of a Realtor. Of that percentage, it is estimated that 40% of all FSBOs will sell to someone they already know, meaning that they are effectively private transactions, and are not really a part of the open marketplace. That means that only 6 to 9% of the homes on the market at any given time are FSBOs, and not all of those are going to sell.
Why such lousy numbers? What is keeping FSBOs from achieving a greater percentage of the market? The simplest answer is a lack of knowledge. Most private sellers simply do not know the appropriate laws, necessary paperwork, local real estate customs or the most effective marketing skills.
While I continue to believe that a seller is almost always better off hiring a competent Realtor (notice I said competent!), there are some fairly simple steps a seller can take to greatly improve their odds of selling, and saving the listing commission charged by Realtors. What follows is a short list of the seven most cost effective methods of producing potential buyers for any home seller, whether or not they are FSBO. In fact, if you have hired a Realtor, and they are not utilizing these tools, I would seriously think about changing Realtors!
1) Professional Pictures and Virtual Tours - A must! Do not try to save a few bucks by believing that your pictures will be good enough. They won't be. Remember what everyone says about first impressions? This is yours, so make it count. You are going to use these pictures over and over, and on most of the marketing you do for your house, so now is not the time to penny pinch. In most markets, you should be able to find a professional real estate photographer who can provide both pictures and virtual tours for between $100-$150.
2) Digital Floor Plans - This is a nice little tool that I like to use to weed out unqualified buyers and time wasters. Some buyers seem to think that it is their duty to view every home that is being sold FSBO, when there is actually very little chance of a purchase. If you have a digital floor plan, you can email it to interested parties, and make sure that they are actually looking for a home that has your layout. Why waste your time and show your three bedroom, 2 bath house, with the master bedroom upstairs, if the buyer is insisting on a first floor master? An appraiser should be able to provide this service for well under $100 in most markets.
3) Oversized Yard Sign - One of my favorites, but one where most FSBOs spend the least amount of time! Go ahead and locate a local sign company and order a big yard sign. Even bigger than most Realtors get! Make your home stand out. While you are at it, remember those pictures you paid for and that look great? Why not put one or two of those on the sign? And maybe a few bullet points about how great your house is. Make sure to include your property website (#5) so that people can get information on your home while you are at work. You should be able to get a customized sign for under $200 and it will look so much better than the ones that are available at the local hardware stores!
4) Toll Free Information Hot Line - Buyers are over six times as likely to call a toll free information line than they are to call an agent or home owner. If you want to capture those potential buyers, you need to have a way for them to call into a toll free number and access recorded information about your house. If the house is not a good fit for a potential buyer, you will never hear from them again, but if someone calls you directly, after listening to your recording, well now you have a qualified buyer! You can set up your own telephone line for 50-60$ a month, or you can probably find a Realtor or mortgage lender who will provide you with the use of their line in exchange for the information on the callers.
5) Dedicated Website - Hugely important, don't skip this step. Over 80% of all real estate buyers start their search on the internet, and that is exactly where you want to be. It doesn't have to be fancy, but you need a website, with your street address as the URL would be great, to host all of the wonderful pictures and virtual tours that you have already paid for! Remember, put your home and website address on that big sign you ordered earlier. You will also want to make sure that buyers can make appointments to see your home while they are surfing your website. The cost for a website, including a domain name, should be well under $100, total. Even if it takes six months to sell.
6) Google AdWords - This may be a little bit more advanced for some sellers, but depending upon your location, it may be well worth the expense and effort. If you happen to live in a highly desirable neighborhood, or have a type of home that is in demand, this may be a great tool for you. For instance, if you have a “Luxury Home", you can set up an ad campaign on Google that will funnel people who are looking for luxury homes in your city to your dedicated website! Pretty cool, huh? The best part is that you can spend as little or as much as you want to each month advertising your home.
7) For Sale Postcards - Neighbors are a great source of referrals! As such, it is a good idea to let all of your neighbors know that your house is for sale, just in case they know someone who they would like to move in! There are now numerous websites where you can pick a postcard design, enter your contact info, upload a few pictures of your house and automatically send out postcards to hundreds of your closest neighbors! Obviously, the cost of this tool depends upon the number of cards you send out, and the size of the postcard, but a few hundred printed and mailed should cost you no more than a few hundred dollars.
If you decide to sell your house without a Realtor, I wish you the best of luck. And if you use these seven tools, you will have greatly increased your odds of success, and you may not even need luck!
Greg Fleischaker is a Associate Broker and Realtor in Louisville, KY, where he consistently ranks as one of the top salesmen in his office. In addition, Greg has developed a reputation for expert knowledge of the statistical breakdown of his local market, and has been repeatedly quoted in the largest daily newspaper as just such an authority. To learn more, and to receive Greg's free real estate newsletter and monthly sales statistics, please visit Greg's personal website, http://www.GregFly.com . You may also contact Greg directly at email@example.com .