by MilitaryByOwner Staff Writer Karina Gafford
Military families are a frugal bunch of intrepid DIY-ers. We can fix our cars (and then sell them ourselves on lemon lots), mend our clothes, make white walls look like an enviable canvas, move ourselves across the country (and back again), and even Ranger-fix our appliances when necessary. One of the biggest DIY projects we have a chance to undertake is a For Sale by Owner (FSBO) home sale. After buying and selling every two or three years, military families see a FSBO as an opportunity to save thousands on the sale price.
Just because it’s easy to list and market your home doesn’t mean that a FSBO is a good option for everyone. The National Association of Realtors (NAR) would have you believe that selling your home yourself isn’t a good option for anyone, but that isn’t true either. In a release of information regarding home sale prices over the last few years, they honed in on the sales price discrepancy between homes sold by agents and homes sold by owner. They showed an average of a 22 percent higher sales price across-the-board by homes sold by agents. The key here is that the sales were across-the-board, so it doesn’t account for the fact that most by owner home sales are:
- Owned by lower income families
- Mobile home sales
- Sold to family and friends at a high ratio
To begin with, the FSBO homes are already lower in value and potentially even discounted for sale to family and friends, so the sales price discrepancy is highly skewed in favor of making agents look as if they can garner a higher sales price for your property. That isn’t to say that an agent can’t get a higher sales price for you, though; in fact, in one of the most infamous cases of a FSBO home sale turned agent sale, the owner of FSBO.com eventually received $150,000 above his original asking price when he finally sold his condominium through an agent. It’s just important to consider that the real estate agent home sale prices also account for considerably higher dollar properties.
While the number of FSBO house listings have increased over the past decade, closing the deal is another matter altogether. As a prospective FSBO home seller, there are a few key numbers you should be aware of:
- In 2003, FSBO home sales represented 14 percent of the market.
- By 2010, that number had dropped to 9 percent, representing the trend in home sellers seeking the help of agents in tough markets.
- That 9 percent has held steady for the past few years, though, and it shows no sign of reversal.
- Over half of the 9 percent represents a home sale to either family or friends.
- Therefore, only about 4 percent of all homes sold are FSBO through marketing.
Before you reconsider a FSBO for your military family, recognize that our community is much more tightly knit than that of the general civilian population. Take advantage of the resources available to you to sell your property to those in the military community.
If you do wish to proceed with selling your house yourself, take note of the three key advantages that a good real estate agent with a pulse on the local market has over most FSBO sellers, and see how you can overcome them!
- The real estate agent already has leads.
She doesn’t even have your house listed, but she already has leads. As an agent, buyers will come directly to her as prospective buyers, but those aren’t necessarily the leads who will buy your home. An agent has access to leads through her network with other agents and brokers, lead lists, and, in larger agencies, through Customer Relationship Management (CRM) systems. You can overcome this advantage by marketing directly to other military families, though. MilitaryByOwner provides an easy option for you to not only market directly to those PCSing to your installation, but also keep track of your leads and inquiries in one easy location. You can then share your listing on local Facebook pages to further increase your market exposure.
- She understands market performance and how it will help you.
She has insights on both current and historical real estate trends for the area, so she knows when buyers are most likely to buy, when during the year that you’re likely to get the most bang for your buck out of your house, and perhaps even more importantly, whether you’re even likely to find a buyer. If it isn’t either the time of year to buy or if the current market conditions in your town aren’t a good fit for your property, then she may be able to advise you to put your house up for rent rather than let it sit empty on the for sale market for months. You can overcome this advantage by hiring an appraiser. This will set you back about $300, but for an added bonus, you’ll then know if your home meets VA and FHA standards, the two primary financing tools used by military families.
- She can quickly confirm that prospective buyers can afford to buy your house.
In the post-recession climate, prospective buyers are now conditioned to present their letter of pre-approval to a real estate agent. This letter shows how much the bank will permit them to borrow based on an analysis of their income and debts. You can overcome this advantage as a FSBO seller because you too can require that prospective buyers present their pre-approval before touring your home; you don’t have to waste your time by opening your house to just any nosy neighbor. If a prospective buyer is hesitant to present a pre-approval, then check out the Top 5 Don’ts for Your Open House to learn why letting that person through your front door may be a bad idea!
If you’ve completed a FSBO and have advice for your fellow military families, please share below!