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What is the point of For Sale By Owner in New York City? Well, there is no point. I cannot understand why Homeowners that have been working hard to pay their mortgages and potentially have invested in renovating their homes would want to take on the task of a For Sale By Owner listing, whether direct or assisted. FSBO? New York City is not Springfield.
The idea of FSBO listing your home that you have so much invested in to only take on the risks highlighted below makes no sense in NYC, perhaps even Springfield. New York City is not Springfield or any other city. It is a very different vertical market.
For Sale By Owner Websites are like garage sales.For Sale By Owner Websites are like garage sales.
Selling your property in FSBO style is like having a garage sale. The difference is that you are not selling $1 items. FSBO Websites that promise to help you sell your home fast and save you thousands of dollars in commission are a business making money from you whether you sell your home or not. FSBO sites have no vested interest in selling your home or, more importantly, for the highest price possible.
Excuse me for being brash. Sure, they don’t charge as much as a real estate agent, nor should they because they are not providing many services to you, except for making money from you. It’s all about volume for these websites, so they pitch you on the pipe dream of saving money, hoping for you to sign up, and so they can list your home on lots of irrelevant and unrelated websites. A listing on sites alone – does not sell a home. Anyone that tells you otherwise has no idea, no matter how good their pitch or well-designed their website is.
What does a listing agent do that I cannot do?What does a listing agent do that I cannot do?
A seasoned real estate listing agent knows what it takes to package and communicate your home in the best way possible. Of course, not all of them. You need a good one. If you have a bad one, it’s like not having one. A great agent will strategize and plan a marketing campaign, use professional photography, write an engaging, concise description, stage or prepare your home for showings, send out emails to other brokers, pre-screen buyers; show qualified buyers anytime, and host open houses. They will do all they can to sell your home because that is how they make a living.
What if a qualified buyer wants to see your home while you must be at work? In a world of little patience, sensory overload, and market headwinds due to a slowing market, package your home, so it sells a lifestyle, not just the walls.
One may assume: “…well, this article is written by a real estate agent, thus, biased and worthless…”. I am a real estate agent, but I have been an exclusive buyers agent for over a decade and have never taken a sales listing. I have no vested interest in soliciting any listing, never your home.
High-net worth individuals are disciplined savers yet they hire listing agents to sell their home. The reason is because they are also smart.
Not all listing agents work as hard.Not all listing agents work as hard.
Not all listing agents are great, nor deserve listing your home. But do not discount the power of a great one. Firstly, part-time agents are not the way to go. You want a full-time career agent, someone knowledgeable and a great people person. People want to do business with educated and well-informed professionals they like, and, yes, that includes buyers. Some agents open doors and achieve no results; these agents have often overpriced your home to get the listing.
Seasoned listing agents get paid a commission for the same reason you are paid at work. Employees that work harder receive a bonus in the business world. Comparable, in the real estate world, those that work harder – get to sell properties and receive more listings. In my case – I get to represent more buyers based on successful deals.
A real estate listing agent is in the customer service and communications business of packaging and selling a home as fast as possible for the highest price reasonable. The right one may exceed your expectations, spurring a bidding war and selling your home for more than you hoped.
Seasoned agents are expert communicators and negotiators. They know what to say and what not to say. They can protect you from emotional attachment and professionally guide you through negotiations avoiding amateur seller mistakes.
Unfortunately, FSBO websites fail to understand the importance of negotiations. Negotiations are essential in every step of the sales process. Negotiations are not always just about the price, and the smart ones know the inner workings of how to use physiological negotiations.
Home Staging ConsultationHome Staging Consultation
If you have been living in your home for over five years, the chances are it needs some TLC. Whether painting, deep cleaning, decluttering or reconfiguring furniture – an agent will carefully go through the home to ensure it is ready for the market. Here are some home staging tips you mike consider.
Many of us have tunnel vision after living in a home long enough. Thus, having an outside independent opinion on what can help your home appeal to a broader audience of buyers is crucial.
FSBO NYC Pros and ConsFSBO NYC Pros and Cons
- Your listing does not reach all 30,000+ real estate agents in NYC.
- Your listing does not sell; you lose time and still hire a listing agent.
- The FSBO listing does not incentivize agents to bring clients.
- You overprice your home hoping for a windfall that never comes. It causes further losses: it takes longer to sell your home while paying property taxes and maintenance charges.
- You underprice your home without an expert valuation analysis.
- Your property sits on the market longer than the average number of days. It becomes stale and undesirable, like a product on a store shelf that has passed its expiration date, and is dusty with faded packaging. Nobody wants it.
- In case your FSBO listing is well accepted is highly unlikely). Instead, you could have been enjoying quality time with your loved ones, playing with your children, or barbecuing with pals. Be prepared to immediately drop all you are doing and start answering many incoming calls, including spam and solicitation, respond to and write a lot of detailed emails, pre-screen and pre-qualify buyers, run their credit checks, etc. while trying to read between the lines of the buyer’s type you are facing.
- You spend countless hours entertaining unqualified buyers and window shoppers.
- You found a buyer only to discover they have lied to you and wasted your time, or, worse, got in the way of a qualified buyer.
- Listing your home by FBSO makes you look desperate in a buyer’s market.
- You may eventually sell your home, saving on commission.
More Reasons Why For Sale by Owner Sales Fail in NYCMore Reasons Why For Sale by Owner Sales Fail in NYC
A for sale by owner, or FSBO, the transaction is a conventional method for homeowners who see a chance to make a better profit by cutting out the realtor commission. It may seem like a better deal, but according to the NAR Profile of Home Buyers and Sellers, that is not the case. The average FSBO price was $185,000, while the average for a home sold through an agent was $245,000. That difference of $60,000 can quickly cover the agent’s commission (usually 6%) and leave a better profit.
If you’re still considering selling on your own, here are the top reasons FSBOs fail in real estate.
You have to do all the marketing yourself.You have to do all the marketing yourself.
These days, buyers always start their home search online. Sellers trying to market independently cannot devote full-time work to it and won’t reach as broad an audience. The NAR report found that 42% rely on a yard sign, 32% rely on friends and family, and a little under 15% rely on social media.
Without an agent, you’ll be very limited in the number of prospects you can attract. A real estate agent knows how to market a property correctly and contacts other agents to share the listing with their clients.
FSBO NYC homes can be priced wrongFSBO NYC homes can be priced wrong
The key to any listing price is to find the sweet spot. Not too high and not too low. Without market knowledge and experience, it’s hard to see that sweet spot. Those selling through FSBO tend to set a price based on an online assessment tool or their gut feeling.
An overpriced home can languish on the market for months or even years. Even if you lower the price later, it can be stigmatized by buyers who see that it has been on the market for a long time. A trained agent knows how to price correctly and find that sweet spot in no time.
You have to handle all the paperwork.You have to handle all the paperwork.
The NAR report also found that understanding paperwork was the most daunting task for FSBOs. Selling a home in NYS can require 15 different documents, which must be filled in and filed correctly.
Mistakes and misunderstandings can happen without a competent agent to guide you through the paperwork.
Failure to file paperwork correctly can cause delays and cancel a whole deal. Unless you have a background in law, it is best to leave the paperwork to the pros.
Liability is all on the seller.Liability is all on the seller.
Everyone makes mistakes, but a seller not represented by an agent pays for those mistakes. Real estate agents have errors and omissions (E&O) insurance and enough experience to catch mistakes. Even unknowingly, you could be liable for litigation in paperwork listing if you make a false claim.
Hidden costs can add up.Hidden costs can add up.
The whole point of FSBO is to save money. However, the many hidden costs of selling are often not considered. You’ll need to pay for signage, photography, flyers, home inspection, contacts, etc. It’s hard to estimate these costs, so they can quickly fly out of control. Working with an agent means all the extra work gets taken care of and ensures nothing is forgotten.