Why not FSBO?

Melanie C. from Baltimore asks: "We're relocating to the midwest, and many of our friends are suggesting we sell our own home (fsbo) to save a lot of money. I've heard I can save $25,000 on our home - maybe more. If that's true - why would anyone use an agent?"

Melanie, you ask a very good question. And first, you need to understand what a real estate agent offers you that you cannot easily get on your own.

First of all, real estate agents are trained pros. They help you determine your selling price by preparing a series of comps (comparables) in your area. As we discussed in the previous post, you CAN get valuations on your own, but that doesn't mean they'll be very accurate.

Secondly, real estate agents help you show your property, and have learned the tips and tricks for how to show a house well. They may suggest you clear off a table, or add a vase of flowers. Small things can make a big difference to potential buyers (have you seen that show on HGTV, "Designed to Sell?") Skilled agents also help qualify buyers BEFORE they bring them through your home to make sure they aren't wasting your time and energy with people who aren't likely to purchase your house.

Good agents, of course, will also often list your home on the MLS. In today's internet world, even buyers without agents are looking on the MLS to see homes in their area. Sure, some FSBO companies will give you an MLS listing, but a savvy agent knows what picture angles to take, how many photos, and whether or not to include a virtual tour. All of this can make a difference between someone buying your home or passing it by.

Professional agents also help you negotiate. They know how to do the dance back and forth with the other agent or broker to get you the best deal for your house. They also know what questions to answer and which to avoid. On your own, you may tip your hand about a lot of things that let a potential buyer and their agent know things they shouldn't.

Imagine you are selling your home on your own and a potential buyer comes to see your house with their agent. The agent is friendly, and strikes up a conversation with you about your home, your kids, and your moving plans. You may tell him that you have a new job in Pittsburgh and you're hoping to sell the house and find a new one out there before school starts. Now the agent knows you have a time frame, which may mean you are willing to go a little lower to sell it faster. You've just given him an edge over you.

Your agent won't likely want you home when your house is shown to avoid just this kind of seemingly harmless conversation.

In the end, using an agent may save you months of inactivity and frustration, along with a great deal of money. That $25,000 you're worried about may be less than you'll end up losing in a sale. On the other hand, if you have the time, the patience and the interest in selling your own home, make sure you do some research into how to do the job, to ensure you get the best price in the best possible time frame.

One of the things I offer my own FSBO clients is a "FSBO Kit" that gives them yard signs with a 1-800 call capture service, help in prequalifying potential buyers, advertising materials and tips, a library of information on how to avoid costly mistakes, and more. If you do decide to forego using a real estate agent, this kind of help is invaluable.

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To Zillow or Not to Zillow

One of the hottest new online tools out there today is Zillow (www.zillow.com) which gives you free valuations and data on a home almost instantaeously.

You can determine the value of a home, calculate the cost per square foot, review the local schools, look at an unlimited number of comps in the area, and prepare a comparative market analysis in seconds.

In theory this is a great tool for realtors, mortgage professionals and even consumers. But you have to make sure you look at this new tool with a critical eye before accepting every valuation.

First of all, these valuations are based on public records, so if a homeowner has added a bathroom or family room and not notified the county assessor, the valuation will be calculated without the upgrade.

Secondly, this technology is new. Zillow is in the beta stage, which means they are still working out a few bugs. I've personally found more accurate home valuations at RealEstateABC.com although you can adjust the various criteria on Zillow more easily (to indicate an additional bathroom or other upgrade, for example.)

Finally, valuations don't take into account the overall condition of a property. One poorly maintained can be worth much less, and vice versa. While you can allow for this with both tools, the math is still a little fuzzy. But keep your eyes peeled, because as these tools improve, they are going to make everyone's job a lot easier!

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