Challenges Unrepresented Sellers Face In Today’s Market

I’ve just spent the better part of a day talking to “unrepresented sellers”; (can you say FSBO??) These sellers are in the real estate marketplace unrepresented for usually one of four reasons.

Number One: The Neighbor
They remember a couple of years ago, maybe back to 2003 or 2004, when their neighbor down the street sold his home unrepresented in 45 days or less, AND for asking price. The neighbor put a sign in the front yard, put an ad in the local paper and held an open house every weekend. That worked then.

Number Two: The Agent
They have had their home listed within the last year, with little to no activity, no showings, or offers. They don’t know if their agent did a good job or not, all they know is the house didn’t sell with an agent, so why should they do that again?

Number Three: The Commission
They’ve talked to real estate companies, and agents and understand that they will have to pay a COMMISSION of somewhere between 5-6% if an agent lists the home. In a moderately priced home, the homeowner possibly feels that they cannot afford to pay a commission. In a luxury, higher priced home, a 5-6% commission seems like one hell’uv a lot of money, and what exactly did that agent do to earn that money??

Number Four: The Try
They are just going to “try it for a while” and then if it doesn’t sell, they will list it with somebody. Maybe their best friend, or a relative who is in real estate.

A sign in the yard is important still, and possibly an ad in a local newspaper. Open houses are important to the unrepresented seller, as the only means to show the home to potential buyers. However, if the unrespresented seller is not doing something to drive traffic to their sign, ad or open house, why bother at all??

Yes, many unrepresented sellers can use the internet to advertise, including using the Multiple Listing Service in their city for a small fee. Web sites such as Zillow, Trulia, Realtor.com, Owners.com, FSBO.com, etc… can be used, but you usually have to pay fees to some of these web sites to get listings “featured” or “enhanced” to really showcase your home and make sure that it is on one of the first pages of homes when someone does a search on the site.

Most unrespresented sellers, in an effort to save money, don’t do this, even though statistics show that about 80% of all home buyers start looking on the internet. An internet presence, with pictures, virtual tours, and great descriptions of the home are needed, coupled with an ability to get your internet presence “seen” by the major web sites and search engines.

“Flat fee brokers” will put you on the MLS, where your days on market start ticking, but what else do they do for you as far as marketing your property?? NOTHING!!

A Flat Fee Broker’s fees are inexpensive because they don’t do any necessary marketing or promotion of your home. If the unrespresented seller reachs a point where they decide to list with a full service broker, the days on market have already begun with the flat fee broker’s “listing.”

Days On Market is an indicator to real estate agents and buyers of the value and condition of the home. The longer the days on market, the more real estate agents and potential buyers will question the value and condition of the home. Statistics also have shown that the most interest shown in a home listed occurs during the first two to three weeks that a home is listed.

Aggresive marketing needs to start from the first day the home is put on the market.

After talking to numerous unrepresented sellers today, it’s apparent that they understand how to calculate a commission on the sale price of their home. What they don’t understand is what a great agent can bring to the table to help them get their home sold, AND for usually 1-2% more money than if they sold it themselves. A great agent will earn that marketing fee (commission)

A large internet presence through multiple web sites, and search engines and virtual tours, coupled with a system to capture all sign calls and actively prospecting and looking for buyers is part of the approach needed to get a home sold today. Real estate agents that are doing these things are selling homes; they’re not waiting for the buyers to come to them, they are chasing the buyers and their agents.

With gorilla marketing tactics, and the resources at their disposal, real estate agents are earning their commission, or marketing fee as we call it.

Many unrespresented sellers don’t understand that by selling their home themselves, they are eliminating many potential buyers.

Actually, many buyers in the marketplace don’t or won’t take the time to scan a newspaper, or drive around a neighborhood looking for homes for sale. With both parents working, or busy with family obligations, they don’t have the time.

So, where do they go?? The internet and real estate agents

Real estate agents typically attract and target the buyer that is highly motivated, qualified and “willing and able” to buy. Prime examples are first-time buyers, relocation buyers, and buyers that need to move up, or down in a home. Local buyers that have already sold their home, and need to find another home quickly will hire a real estate agent. A real estate agent will find them many homes to look at in the shortest amount of time. These types of buyers won’t look for an unrepresented seller. It just takes too much time.

Buyers that are buying for a specific reason; we need a pool, we have a baby on the way and need another bedroom, our kids are gone, we need a smaller house; will look to an agent.

Unfortunately, the unrepressented seller will possibly be faced with dealing with the discount buyers, looking to buy the home at much reduced price. The “discount buyer” is savvy, educated about the real estate market, and has probably bought and sold a few homes before. They don’t want a professional real estate agent involved. After all, Mr. Unrespresented Seller, isn’t that what you are trying to do–save money??

When you go to a garage sale, aren’t you looking for bargains?? Would you pay full price for a used toaster at a garage sale? It’s a silly comparison, but that’s the mind set with a lot of people.

The unrespresented seller may also face the unqualified buyer who will put forth an acceptable offer, start a contract and then can’t seem to get financed for some reason. They may also have contacted a real estate broker and upon that broker trying to get them qualifed, found that the broker could not help them. Now they are looking for the unrepresented seller. As an unrespresented seller, you have no way of qualifying that buyer. If your buyer can’t get financed, maybe some “creative” techniques will work, such as a lease purchase, or rent-to-own arrangement, or some form of owner financing. If they can’t get financing, why in the world would you consider another option?? Was this the only offer you had on the home in the last 60-90 days??

Many unprespresented sellers have friends or relatives in real estate that tell them, “Sure, try it for a while, and when you’re unsuccessful, we’ll list it for you.” Friends and relatives in real estate are great, but will they tell you what you need to hear about your home??

Will they be honest about pricing, and repairs. Will they tell you that hot pink bedroom and flower wallpaper will turn people off?? Are you going to ban them from the family reunion when they tell you these things??

Selling a home shouldn’t ruin family relationships, it should be a business decision. Your home holds many fond memories over the past years. Those memories will always be with you, no matter where you live.

Pricing is by far the biggest issue when it comes to getting a home sold. How some unrepresented sellers come up with their price is remarkable.

“The neighbor down the street sold a year ago for $xxx,xxx, so that’s what I want.” Even if the homes are identical, and they won’t be, the market has changed from one year ago. It’s unrealistic to think your home will sell for that price. It may sell for more….or less.

Too many sellers are still holding onto the pricing strategies of 2003 and 2004. It’s different now, folks!!

“Three homes in my subdivision have sold for $xxx,xxx, so mine will too.” Those three homes were on cul-du-sac lots, backing to common ground, with a walk-out basement. Your home is in the middle of the street, backing to a major highway, with no walk out basement. (walk-out basements are important in St. Louis). “My home was built in 1968, what’s wrong with the advocado green ovens, dishwasher and light yellow laminate counter tops??” Nothing, except every other home that has sold in the area has been updated with more neutral color schemes, and new appliances. Your 1968 home might sell, but not for the price you think it should; remember the discount buyer, looking for the deal of a life-time??

Unrepresented sellers are being successful, but they are the ones tuned into the marketing techniques and tactics of today, not 2003 or 2004. With accurate market information, internet savvy, and a willingness to price properly, update, repair and stage their home correctly, unrepresented sellers are seeing results.

Good Luck, Mr./Mrs. Unrepresented Seller

This entry was posted on Monday, March 19th, 2007 at 12:14 pm and is filed under For Sellers, Unrepresented Seller(FSBO). You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.