Selling a home is generally the largest financial transaction that most people make in their lives. However, most people think there are only two ways to sell a home. They figure they can sell For Sale by Owner (FSBO) on a site such as Zillow or list with a real estate agent and pay a hefty commission to do so.
Selling FSBO is very enticing to sellers, as it’s an opportunity for them to sell their home and $ave a TON of money by not paying real estate commissions. However, the exposure of only a handful of FREE FSBO websites that allow the general public to list their home doesn’t typically generate qualified buyers who are looking to purchase a home. In fact, it typically produces the opposite effect by having the seller’s phone ring off the hook with three types of callers.
The main type of caller is a traditional real estate agent that tells the seller that their marketing plan is amazing and will certainly attract the right buyer that will purchase their home. Since the large majority of sellers listing FSBO are more than happy to offer a commission to a buyer’s agent, a seller’s response should be “That’s great. Bring me a buyer and I’ll happily pay you a commission on the buy side.” However, that agent generally doesn’t haven’t a buyer and is only using that line to try and secure the listing (easier side of the real estate transaction). If a real estate agent isn’t doing 50+ transactions a year or offering a Buyer Rebate program, then their goal is to “preview” your house in an attempt to meet you in person to try and get you to list with them.
The second type of callers are unqualified buyers (aka “tire kickers). These types of “buyers” generally have bad credit and no money, so they look for sellers who will owner finance or enter into a lease option agreement. They also assume that since a seller isn’t paying a commission that they’ll simply want to reduce the price of the home by 6-10% or more.
Finally, the third type of callers are wholesalers. These “investors” attended a weekend seminar and that are taught to call tons of FSBOs to try and find a seller to sign a contract to your house for no money down. These “investors” want to tie up your property for 30-45 days for a significant discount (usually 70% or less of your house value) and then try to assign it to a buyer.
If FSBO isn’t successful (typically only 3-5% are), then sellers begrudgingly turn to a local real estate agent to help sell their home. Without much thought or research, many sellers choose an agent from word of mouth because everyone seems to know an agent (there are a lot of the out there 🙂 Most sellers don’t even bother to interview multiple agents to see what each can offer, read online reviews from reputable websites, if real estate is the agent’s full time job (real estate is a side job for a lot of realtors) or how many transactions an agent has completed in the last 12 months. I think some people research their Amazon purchases more than they research selling a home…ha ha! Would you trust a doctor to perform a surgery on you if they’ve only done it 2-3 times a year or the surgeon who has the experience and knowledge of doing 2-3 a day?
The National Association of Realtors (NAR) statistics state that 87% of buyers purchased their home through a real estate agent or broker. (https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics) That being said, the best statistical chance sellers have to sell their home is through the Multiple Listing Service (MLS).