FSBO Jane

As America is becoming increasingly decentralized, buyers are quickly buying in the far-out “exurbs” of America. These nascent communities are building their own thriving economies with a culture all their own. While urban and suburban areas are still desirable places to live, people are moving to these exurbs with the hopes of a vibrant life without the high real estate and property taxes that come with the convenience of urban and inner-ring suburban life. Donald Trump notes this trend in his new series, Making your Fortune in Real Estate. The toupeed tycoon himself has observed where the next generation of home buyers is buying, and you should too, since this is where sellers should be selling.

Homes along the I-4 corridor in Florida, for example, were once a haven for retirees, but families are moving in and building thriving communities and increasing real estate value. This isn’t the kind of town that is designed solely around families, but also has a thriving population of single people and younger people as well. David Brooks, author of On Paradise Drive: How We Live Now (And Always Have) in the Future Tense, says that exurbs are “built to embody a modern version of the suburban ideal.” While these areas are developing strong economies based on corporate and retail development, the houses that are already there will become high in demand. As soon as the real estate tycoons see promise in areas like these, it is high time to prepare your home for incoming residents.

Note the trend: when the market picks up in specific, evolving and developing areas, the rest of the market will pick up as well. When buyers are buying, sellers must sell: prepare your home for the near future.

According to this recent article at Money Magazine, home sales have hit an 11-year low. What does this mean for homeowners?

1. Realize your home may be on the market for a while before it sells. There are just too many homes and not enough buyers right now.

2. Do everything you can to set your home apart from the pack: think about curb appeal and marketing strategies.

3. If you’re looking to become a homeowner, now might be just the right time. You might be surprised at the offers sellers will accept. At the same time, this market may continue to plummet, in which case, you won’t want to buy with immediate plans to sell (aka: flip).

A friend was telling me recently that he still isn’t sure if he’s ready to sell his own home. It’s a beautiful place, well-maintained and full of updates. But he’s hanging on to the idea that a realtor is necessary, much like a doctor or a lawyer. He wonders if a realtor could bring something to the table that he lacks-knowledge, skill, etc.

During our conversation, I realized I understand his concern. Selling your home isn’t for everyone (though I definitely think it’s for my friend, but that’s another story). There are some reasons I think people should use a realtor.

1. You don’t value your money.

If you don’t think up to 6% of your selling price is worth fighting for, use an agent. If you feel getting most of your home’s value is good enough, use an agent. If you’re happy to part with hard-earned dollars in exchange for someone’s picture in your front yard, then yes, a real estate agent is for you.

2. You don’t know your home.

If after living in your home, you don’t think you really know enough about its features to sell it to someone else, consider an agent. If a realtor could effectively learn your property in his or her two-hour visit, better than you could, use an agent.

3. You don’t know your neighborhood.

If you’re completely unaware of what shopping is nearby, what expressways are convenient and what attractions are valuable, a realtor might be able to help you. If you don’t know the first thing about where you live and why it’s a good place or if you don’t really know why you bought the home in the first place, use an agent.

4. You are lazy.

If you don’t want to do any work at all-I mean, you don’t want to stick the sign in the front yard, you don’t want to tell people your house is for sale, you don’t want to put up a flyer-you should find someone to do it for you. If you’re not interested in sprucing things up, mowing the lawn or making things look their best, your by-owner sale will be tough. An agent still might not sell your property, but at least you won’t have to do anything about it.

5. You are unmotivated.

If you’re apathetic about whether or not your home sells, when it sells or for what it sells, use a real estate agent. If you don’t really care about your home or controlling its listing process, use an agent.

I know these points may seem cold, and yes, they’re a bit tongue-in-cheek. However, they are so true. The only things a realtor offers you are things you can do yourself!

In one of my recent night classes, a student asked me this question: “What’s the best real estate website?”

I had my opinions, but instead of answering her, I assigned the class a weekend project: do a little online research and tell me. They were told to compare styles, advertising, word-of-mouth familiarity and their own personal experience. Yesterday, we discussed their results.

The most interesting response was from a young guy who’s around 22. He approached the assignment by searching for how many sites claim to be the best. Check this out:

Realtor.com: “the #1 most visited homes-for-sale site, with more than 6 million consumers visiting each month”
Microsoft: “MSN^® HomeAdvisor^TM online home and real estate guide has surpassed Realtor.com as the most-visited home and real estate site on the Web”

Among FSBO sites, it’s even worse:
Owners.com: the “Largest ‘For Sale By Owner’ Marketplace”
Byowner.com: “the nation’s #1 Web based no commission home selling solution”
FSBO.net: “We have combined with HomesByOwner.com to provide the leading, locally
focused For Sale By Owner homes internet site.”

So there you have it. A lot of claims, a lot of hype… but do they deliver? Only one website has satisfied me: www.buyowner.com. I’ve said it before, but I’ll say it again: Buy Owner is the single FSBO company for which I have no complaints. Buy Owner gave me no problems and exceeded my expectations. If you’re thinking about going with a FSBO company, please check out my post on How to choose a FSBO and the culminating entry about my experience with Buy owner: here.

Madison has an incredibly strong FSBO market–about 20% of the total real estate sales in the city–and there may be a few reasons why.  Like other popular FSBO cities such as Tampa and Miami, Madison has desirable traits that can be conveyed as easily via the internet photos and descriptions as through a real estate agent.  Madison also has a decent and a heavily trafficked FSBO website (although their alleged 6.6 million hits seem a bit inflated!).

A solid website and a livable city equal tremendous FSBO success, and this is changing the structure of the real estate market in fast-growing cities like Madison. According to the.next.net, “Of the 2,000 homes listed on the [FSBO Madison's] site last year, the estimated commissions on those that sold would have been $17.3 million under the traditional 6 percent commission structure.”  The site, however, only took in $300,000.  This inevitably sets a standard for the changing real estate culture by via internet-based FSBOs: that huge profit gap stays in the pockets of the seller and the buyer. With such a bustling market in a small city, it’s no wonder that this trend has continued in other areas of the country.

Unlike the smaller, less competitive market of Madison, large FSBO companies like BuyOwner tackle a tremendous chunk of bigger FSBO markets in Tampa, Orlando, Jacksonville, Houston, Atlanta, and the Chicago area. With that sort of spread in so many desirable cities, it is no wonder why a desirable location + one of the strongest FSBO sites in the market = a successful sale in the post-housing-boom era.

I just got off the phone with my cousin, and she was telling me that her daughter is looking for a job. The daughter (K) just finished a summer trip to Europe, where she backpacked through France, Spain and Italy. It was very exciting, I’m told, and pictures are coming soon. K has a degree in a Liberal Arts field, and she’s unsure of her future career goals. Right now, she just needs something. I remember how that was.

K is spending today registering with a variety of staffing agencies, hoping they’ll have the connections she needs to get placed somewhere. I asked my cousin what her other strategies were.

“None,” she told me. “She’s just betting on these agencies.”

I told my cousin what I would tell anyone in that situation: that’s just plain stupid, and I hope she tells K so. Why expect someone else to find the job for you? Job-seekers need to get out there, be sending resumes proactively. In a staffing agency, lots of people are competing for those jobs, and the agency is getting a cut of the salary (a cut the company can afford and that you should be getting!).

It hit me a few weeks ago how similar staffing agencies are to real estate companies. Both pride themselves on having the inside information. Your staffing rep will find out about jobs that meet your criteria, tell you about them and give you a chance to interview. Your real estate agent will find out about homes that meet your criteria, tell you about them and give you a chance to view them in person. Sounds good, right?

Well, sure. Good, that is, if you’re OK with waiting until the rep finds you something, OK with having to settle for something–anything–because the rep tells you you should, OK with paying a big chunk of money to this rep for doing the dirty work for you.

I’m not OK with that, and you shouldn’t be either. You, as a thinking human being, have the ability to search classifieds, be proactively searching, putting the word out and networking. Whether you’re buying or selling, you have the ability to be your own agent.

This interesting study explains the most recent information about the FSBO/real estate agent divide.

Contrary to popular belief,
FSBO sellers actually made just as much on the sale of their homes as did sellers with agents.

The major difference is the length of time the houses were on the market; while a realtor may be able to sell a home in a few days, the money spent on commission is no bargain.

I’ve spent the past week walking you through the most important steps in preparing for your open house. Following these tricks will improve your home’s appearance and ensure buyers see it in its best light. Your home’s buyer may be at this open house; isn’t it worth the extra time to impress that someone?

In case you missed something, here are the steps, in order:
1. Clean Everything
2. Think about Smells
3. Declutter
4. Rid Distractions
5. Stage Furniture
6. Brighten Up

This is the final tip, and I think it’s the easiest. You’ve cleaned, you’ve decluttered, and you’ve worked hard preparing for your open house. Now, you just need to brighten things up. Turn on any decorative track lighting you may have. In fact, turn on lights everywhere. It will make your home seem larger, brighter and more spacious. Pull up window blinds and open curtains. In this crisp fall season, you might want to have a crackling fire prepared for the open house, as well.

Supply the bathrooms with fresh, clean towels and nice hand soap. Put an impressive potted plant by the front door and give that door a fresh coat of paint as well. Decorate your dining room table with an attractive centerpiece, and set it as if for a dinner party. Add similar touches elsewhere throughout your home, paying attention to increasing space and removing clutter.