Understanding the Buyer and Selling For Sale By Owner...Does It Work?

Pricing Homes to Sell in Avon, Avon Lake, Westlake, North Ridgeville, Bay Village, Grafton Ohio

                             WESTLAKE OHIO HOME SALES BY OWNER DOES IT WORK?

Attention: For Sale By Owners! 
Why People Are Afraid To Buy From You? 
To begin with, the reasons a home seller and a home buyer would consider working together "for-sale-by-owner", are directly opposing reasons, which starts off any dealings they might have together on the wrong foot.  A FSBO seller thinks that he can get more money in his pocket, by selling the home for the same sale price, and not having to pay a realtor's commission. However, typically the reason a home buyer would consider buying a for-sale-by-owner home, is he thinks he'll be able to strike a deal on it, getting it for less money.  Any offer he might make, he usually starts off by negotiating the amount that he estimates the home seller is not paying in real estate commission. Almost always that buyer expects the home owner to take less, and any offer he would make on a for sale by owner property reflects that, with the buyer deducting what he thinks the seller is saving by not paying a commission, and then some, as he knows there is already negotiating room in most home prices.
Therefore, bottom line is, the only reason the FSBO home seller and the home buyer who might consider buying that FSBO home would want to deal with each other directly is price...but for directly opposing rationale. The buyer expects to pay a very low price for the home; he expects to be able to deduct what he estimates the seller is saving in commission from the seller's asking price. On the other hand, the seller expects to add the amount he estimates the commission would have been, if he had used a Realtor, onto his net proceeds. Neither party considers where the other is coming from, and therefore their negotiations rarely even come together. 
In Northeast Ohio, home buyers do not traditionally pay for the services of a buyer's agent, as the buyer's agent would be paid out of the listing broker's commission on a co-broke basis.  Yet the buyer can readily realize that those "free" services are invaluable, so for any buyer to consider giving up those services, he would expect to strike a much lower price for the home, or why do it?

The home buyer is often uncomfortable dealing directly with the home seller, knowing that the owner only has that one home to sell.  And the buyer fears the home seller may not necessarily be able or willing to share things the buyer needs to know about the home, or about the buyer's rights to perform inspections, or about financing options, or to even provide invaluable info such as recent comparable sales to show the buyer what similar homes have sold for recently, in the area, to protect him from overpaying for the home.  Whereas, if he used a buyer's agent, the agent could show him any home on the market, and help him make the best decision of which home is the best value.  Furthermore, the buyer knows that the FSBO seller only has one home to sell, and may unduly press him to purchase that one home and may not always be upfront about property disclosures, what rights the buyer has for inspections, etc.  The buyer will be on his own, with no representation to help make sure he is not making a very expensive mistake.
On the other hand, the reason a homeowner would consider selling for-sale-by-owner is he believes selling a home is simple; he thinks why should he pay a broker fees for something he could do himself? However, most of the homeowners who attempt to sell for-sale-by-owner, are actually surprised by the enormous amount of time and effort required to market it, and most of them end up listing the home with a Realtor after months of unsuccessful effort, but then have to try to play "catch-up" with the market, in most cases, having to offer a very agressively lower price, in order to try to make up for having gotten shopworn from being on the market so long already. 

And the ones that are actually able sell by owner, agree they would not go that route next time, that they would hire a professional real estate agent whenever they sold another home.  And most of the ones who sold by owner said they were disappointed with the price and terms they were able to get by owner, as most of the offers were extremely low, and buyers seemed to be taking advantage of the sellers not having a Realtor to represent them, fully knowing that the sellers have only limited exposure to buyers.  And the homeowners realized they were unskilled in negotiating repairs from the home inspections, and lost deals on their home midway through due to their inability to hold things together.  And they admitted that many costly mistakes could have been avoided with the right guidance from a good real estate agent.  
For these reasons, the home seller who is able to actually eventually sell his home by owner, is most likely going to net even less than he would have netted if he had listed his home with a Realtor, especially after also deducting the fees he would have to pay out of pocket for the marketing expenses incurred for print and internet advertising, legal fees to have the contract drawn up, yard signs, appraisal fees, etc.  And this is doubley disappointing in light that these same services are generally included at no extra charge as part of a real estate agent's commission. 
Many FSBO’s told us that they didn't actually get any more money in their pocket, as they ended up selling their home for much less than they expected.  They noted that they felt the limited exposure and resources they had to work with as FSBOs made it difficult to attract prospective buyers; they were not able to generate sufficient activity to bring enough interested buyers.  So, they either ended up taking less for the house, or ended up listing it with a Realtor to get it sold.  And by the time the FSBO's figured in the amount of money spent to cover mortgage payments, taxes, utilities, etc. for the longer market time, that by the time the property ever did end up selling, they would have been better off having paid the listing with a real estate broker from the start, instead of wasting valuable market time, and having to incur the added expenses of that long market time. 

Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBO’s discovered that the lost money as a result of poor decisions more than outweighed the commission. They admitted that while they had been focusing on saving a commission fee, they totally missed the big picture, and lost far more by getting so much less for the home, due to limited exposure to potential buyers.  And nearly every home buyer asks "How long has this property been on the market?"
 And the answer to that question will determine how much he thinks your property must be worth. The longer it has been on the market, the more he expects you to come down on the price.  

Before you decide to sell FSBO, consider these questions and weigh the answers of assuming the responsibility versus employing a professional. A little time spent investigating up front will pay off tenfold in the end.
Questions To Consider:
Do I have the time, energy, know-how, and ability to devote a full forced effort to sell my home?
One of the keys to selling your home efficiently and profitably is complete accessibility. Many homes have sat on the market much longer than necessary because the owner was unwilling or unavailable to show the property. Realize that a certain amount of hours each day is necessary to sell your home.
Am I prepared to deal with an onslaught of buyers who perceive FSBO’s as targets for low balling?
One of the challenges of selling a home is screening unqualified prospects and dealing with lowballers. It often goes unnoticed... how much time, effort and expertise it requires to spot these people quickly. Settling for a lowball bid is usually worse than paying broker commissions.
Am I offering financing options to the buyer? Am I prepared to answer questions about financing?
One of the keys to selling, whether it’s a home, a car... anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time you purchased something of value, did you make a decision before you had all your ducks in a row? By offering financing options you give the home buyer the ability to work on their terms and open up the possibilities of selling your home quickly and more profitably. A professional real estate agent will have a complete team, from lenders to title reps for you to utilize...they’ll be at your disposal.
Do I fully understand the legal ramifications and necessary steps required in selling a home?
Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your states disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, a professional would be a wise choice.
Do I have the capability of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?
Ask yourself if you are well versed in legalese and if you are prepared to handle disputes with buyers. To avoid any disputes it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misinterpretation of what was negotiated.
Have I contacted the necessary professionals....title, inspector (home and pest), attorney, and escrow company?
Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps. Like any profession there are inadequate individuals who will slow, delay and possibly even cost you the transaction.
Understanding the buyer As the seller, you can control three factors that will affect the sale of your home:

* The home's condition
* Asking price
* Marketing strategy

However, it's important to note that there are numerous other factors that influence a buyer, and you need to understand these consumer trends when you enter the sellers' market. The more your home matches these qualifications, the more competitive it will be in the marketplace.JoAnn Abercrombie can advise you on how to best position and market your home to overcome any perceived weaknesses, and to in turn accentuate its strengths.

Unfortunately, the most influential factor in determining your home's appeal to buyers is something you can't control: its location. According to the National Association of REALTORS, neighborhood quality is the Number 1 reason buyers choose certain homes. The second most influential factor is commute times to work and school.

While some buyers want to simplify their lives and downsize to a smaller home, home sizes in general have continued to increase over the decades, nearly doubling in size since the 1950s. Smaller homes typically appeal to first-time home buyers and "empty nesters," or couples whose children have grown up and moved out.

Preferences in floor plans and amenities go in and out of fashion, and JoAnn Abercrombie can inform you of the "hot ticket" items that are selling homes in your market. If your home lacks certain features, you can renovate to increase its appeal, but be forewarned: That's not always the right move. Using market conditions and activity in your neighborhood as a gauge, JoAnn can help you determine whether the investment is likely to help or hinder your profit margin and time on the market.