FSBO Case Study: Selling in a Buyer’s Market
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FSBO Case Study: Selling in a Buyer’s Market
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In this changing real estate market FSBO transactions have changed a bit. It’s important to understand the process to make the most of your sale. Below is a case study of an actual sale. We have changed a few minor details such as location at the request of the seller to ensure privacy. Their experience gives an accurate example of the challenges and rewards of a typical FSBO seller in a difficult market.
Market: Ft Lauderdale, FL
Average 1 year price change: - 14%
House: 3 bedroom 2 bath, Pool 1643 sq ft.
Listing Price: $435,000
Colleen and Jeff were relocating to Atlanta for work and needed to sell their house in Ft. Lauderdale which they had owned for 3 years. Because of the recent price declines they were concerned about getting enough out of the house to cover their mortgage and provide enough for a reasonable down payment on a new house. They considered hiring a seller’s broker but calculated that even if they got their asking price, of $435,000, after paying off their mortgage they would net $110,000, which would be reduced to $84,000 after paying the broker. They had 3 months to sell so they listed on Owners.com to sell FSBO.
Colleen: Our home was in good condition, so we didn’t have to make many major repairs. We did the typical things to clean up the curb appeal, painting the front door as well as the entry way. We also replaced the light fixtures and planted some new shrubs. also Inside we replaced the carpet in the hall to give people a perfect first impression. Since we were moving we boxed up everything personal and extra and put it in the garage to give the rooms a more open feeling.
Colleen and Jeff: We listed our house on Owners.com and uploaded 15 photos, one of every room, the front yard, back yard and some details in the kitchen. We put 2 signs in the front yard to make it easy for drivers from either direction to read them. We also placed an ad in the local paper, listed the house on Craigslist, and emailed our listing to everyone in our address books, just in case someone knew anyone else looking for a house. In the first week we got a number of calls so when our first open house came up we were very hopeful. That first weekend eight couples came by to look at the house. We really had expected more, but as they say you only need one buyer.
We set a date for offers two weeks after we first listed to allow for a couple open house weekends.
We had a number of calls and 15 people had seen the house so we were hopeful. Unfortunately on that first day we received only one offer for $90,000 below our asking price. It was discouraging, but we thought that maybe because it was early December that the holidays might have dampened interest.
Rather than hire a broker yet we went back and examined our pricing as well as how we described our property.
Jeff: Over the holiday I read a couple books on FSBO selling and decided to make two changes to our plan.
First we went around to see some of the houses for sale that were comparable to ours to get an idea of what buyers were seeing and to see what was different about our house. Then, I re-wrote the description of our house to highlight the things that supported our price, emphasizing our kitchen remodel, appliances as well as the pool with self cleaning and automatic pool cover.
Second we listed the house on the MLS and based on a tip from the book, offered commission to a buyers broker of 3.25%. This percentage was slightly above average with the intention of getting brokers attention and helping our listing stand out from all the other houses that are on the market right now. After our listing went up on the MLS we held a Tuesday open house for brokers and passed out printed fliers with all the details. Over 40 brokers came by, as well as a number of individual buyers.
Two weeks later we took offers again. This time we got three offers: Two from brokers representing buyers and one from an individual with no broker. One of the brokers offer came with too many contingencies so we took that one off the table. The other two offers were similar when we considered what we would net:
|Flat Fee MLS
|Buyers Broker Fee
|Net from Sale
We spoke with both parties to get a sense of how easy the transaction would be with each of them. In the end we chose to go with the offer from the buyer with an agent. The main difference was that the buyer’s broker offered to review our paperwork for no additional cost to make sure everything was accurate and they were able to answer all the buyers’ questions saving us time and money.
Colleen: Being a patient FSBO can work really well. It helps to like to talk to people and Jeff is great at that. If we were going to do it all again we’d do a couple things differently. First we’d right away go look at all the other houses for sale that were similar to see what we needed to emphasize, and understand what buyers were seeing. Second we should have listed on the MLS in the first week but then wait for 3 weeks to take offers to get the most attention from brokers and from people who didn’t have a broker. In the end I figure we saved about $12,000 by selling FSBO and it cost us about five weekends – pretty nice!
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