Well, it finally happened. This FSBO business wasn’t as difficult as you thought it might be. Sure, the house has been on the market almost three months (average for a FSBO) and some of those folks traipsing through your house after you canceled dinner reservations seemed a little seedy. And you didn’t much appreciate them opening your desk drawer, either. But finally, after lowering the price twice, there are now two offers sitting on the dining room table. They’re both qualified. The first has a pre-approval letter attached and the second is accompanied by a pre-qualification. You really like the first couple. He was in the car business like your dad and their favorite restaurant is Antoine’s, your favorite restaurant, too. And they’re pre-approved. What could possibly go wrong?
As it turns out, a pre-approval isn’t exactly what you thought it was and after two months of excuses and a few closing date extensions, the purchasers were turned down for the loan and the sale fell through. You had to exercise the contingency canceling the purchase of what you thought was going to be your new home, and your house is back on the market. Back to square one.
A new home purchase and sale isn’t as simple as it used to be, even just a few years ago. The days of selling a home by putting a sign in the front yard and buying a $20 classified newspaper ad are long gone. In fact, recent studies have shown that 94% of buyers search online for a home, compared to only 17% that ever even look at print newspaper ads. Most successful real estate agents like the Sales Executives at the Trembley Group have a strong internet strategy to promote the sale of their listings. An internet strategy is crucial to selling a home in today’s market. The shifting dynamics and the required sophistication for buying and selling real estate largely explains why over the past 20 years, the number of homes sold FSBO has dropped from 20% to 8%, a record low since the National Association of Realtors started keeping statistics in 1981.
There was a time not too long ago when selling a house meant a buyer and a seller negotiated a price and hired an attorney to draw-up the closing documents. Not today. The paperwork involved in selling and buying a home has increased dramatically over the past decade as industry disclosures and regulations have become mandatory.
And negotiations… Buyers and sellers must be prepared to negotiate with a variety of folks if they decide to do a For Sale By Owner. First, the seller must negotiate with the buyer who is looking for the best deal possible. That’s why they are dealing with a FSBO in the first place. The seller is trying to save a real estate commission. And the buyer is thinking, since the sellers aren’t paying a commission, they should be willing to negotiate more on the selling price. That is not a good formula for smooth negotiations. Furthermore, the buyer is likely represented by an agent who is expecting to be paid by the seller, which is customary, even though the agent is representing the best interests of the buyer.
And what happens if the appraisal doesn’t quite achieve the contract price? Are there any options for negotiating with the real estate appraiser or the lender? Seasoned agents like the Sales Executives at The Trembley Group Real Estate are experienced negotiators and understand when and how it’s appropriate to negotiate with the appraiser and lender if there’s a question of value.
And what about the home inspector? The inspector is hired by the purchaser and in almost every case will find a problem with the house. A good inspector will want to prove his or her thoroughness and value by finding minor problems even with new and seemingly perfect homes. Negotiations are reopened once again. Again, there is no substitute for experience and expertise.
Sales Executives at The Trembley Group Real Estate are local real estate market experts. FSBOs usually overprice their homes. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they’re wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home, and tips for improving the home’s buyer appeal. Overpricing a home is a sure way to deter potential buyers.
One of the most important services provided by an experienced Realtor is helping a seller price their home. First impressions are everything when selling a home. Studies have shown that the first two weeks on the market are the most crucial to success. During these initial days, a home is exposed to all active buyers. If a price is perceived as too high, the home loses its initial audience and will soon be relying on the trickle of new buyers entering the market each day. Markets are dynamic, and a price has an expiration date.
A home has one chance to grab attention. A home should be priced to make it stand out from the rest – in a positive way. Pricing a home to sell is part intuition, part research, and part market timing. If priced within the comparable sales, it should receive immediate offers. Priced too high will result in fewer people see it and fewer offers. Price it too low and the market will perceive that something is wrong with the property or that the sellers are desperate. Learning how to properly price real estate takes lots of practice and experience. One of the biggest reasons why FSBOs fail in the real estate marketplace is because the seller incorrectly prices their home.
Returning to the original example, FSBOs often waste countless hours having unqualified buyers walking through their home because they don’t know how to ensure that the potential buyers are financially capable of buying their home. Many FSBOs don’t realize that there is an enormous difference between pre-approved and pre-qualified. Pre-qualified is an informal process where a lender looks at borrower provided information and says a potential borrower will likely qualify for a certain loan amount. Pre-approved is a formal process where a potential borrower provides detailed financial information and authorizes the lender to conduct a formal, detailed inquiry into the borrower’s information and credit report. It results in a commitment from the lender. It’s important to know the difference but even more important to know where to send a potential purchaser to find out if they’re capable of buying a home.
A Trembley Group Real Estate Sales Executive has learned how to screen potential buyers. One of the biggest reasons why FSBOs fail in real estate is because the FSBO homeowner has no clue what questions they should be asking or how to screen the potential buyers. A Trembley Group Real Estate Sales Executive will send their clients to a local mortgage consultant or representative early in the home-search process. If potential buyers inquire about a FSBO home, one of the first questions should be, “have you been pre-approved for a mortgage?” If they have not, a seller should insist that they speak with a mortgage consultant before seeing the home and they should know where to send them.
The Trembley Group Real Estate Sales Executives firmly believe they can get a seller more money through the art of negotiation, leverage of local knowledge, use of incredible marketing tools, access to a greater marketplace, and ability to qualify buyers.
Need help? Call The Trembley Group at 843.945.1880 ext. 1 and we’ll help you look for the perfect listing or buyers agent!
At The Trembley Group, we pride ourselves on being the experts at more than just selling real estate. We are local residents, some of us have been here for a lifetime. The rest of us will be here until the end of time. We love living, working, and playing in the diverse backyard of Coastal Carolina, and look forward to helping you live and love your dreams soon too. Please reach out to us by phone or email for personalized service and one-on-one advice.