Robert Darrow, @properties

Archive for the ‘FSBO’ Category

Part 1 on Corporate Relocations here

Part 2:  The Internet Empowered Consumer

More and more home buyers are starting their home searches on the Internet.  The convenience of looking at homes 24 hours a day, even in your underwear (see this article) is a powerful convenience.

Some statistics from N.A.R.

Homebuyers’ Use of the Internet

80% of home buyers used the Internet as a source.
81% of Internet home buyers also used a real estate agent.
63% of non-Internet buyers used a real estate agent.
74% of buyers who searched online drove by or looked at a home they first saw online.

To reach the Internet Empowered Consumer, you must answer the fundamental question that forms the basis for all decisions undertaken by this consumer:  What’s in it for me?

Since it stands to reason that these buyers are looking online because it is convenient, they are also going to look for the source of homes that offers the greatest convenience. 

These convenience seekers are unwilling to scour the Internet for multiple sources for homes.  They are going to Google search for “Real Estate ______” – and where the blank is located, they are going to plug in the name of the city they are interested in.

Here in Chicago, that means they are going to land on the web pages for the major brokerages, and the major real estate portals. 

Neither source caters to listings offered “By Owner.”

The number 1 source for homes on the Internet is www.realtor.com – the website that Realtors put all their listings on.  Every single Realtor who belongs to a local MLS or Realty Board sends their listings to www.realtor.com.

And by definition, none of those properties will be “By Owner.”

The source for all the real estate information on AOL’s real estate search portal is www.realtor.com.  Several others, too.

As a FSBO, you have access to several classified advertising web sites, and a handful of “By Owner” web sites.  But remember the credo of the Internet Empowered Consumer?  What’s in it for me?

The buyers that search for listings on the classified ad web sites are likely looking for something in particular:  to save a commission, too.

Buyers who search out FSBO properties often do so in order to do the same thing that the seller is trying to do.  So even if you have taken the commission savings into consideration with your list price, seekers of FSBO properties are going to try to negotiate even more off the list price of your property.  Perhaps another 2%, 3%, 5% or even 6% off since he thinks you’re trying to keep all that money for yourself!

In the immortal words of one of my esteemed competitors at another company “It ain’t all big hair and Cadillacs.”

Corporate Relocation clients or Transferees. The creme-de-la-creme of buyers! A buyer is relocating to a new city – yours – and has a limited amount of time to spend searching for a new home for his or her family. Most of these buyers are assigned a corporate relocation specialist inside a relocation company to take care of as many details as possible for the busy executive so he or she doesn’t have to worry about the move. This busy executive needs to hit the ground running, identify property in a minimum number of visits and then select one so he or she can get to work.

Corporate relocations are handled mainly by two large nationwide companies in the US, and when they receive a new executive, the begin working on handling all the details of the transfer. One of their main tasks is to assign the exec a professional agent in their new home city. Typically, the exec has two days to locate a home, and the Realtor assigned the task of helping the exec books approximately 10 showings a day for each of two days. Half the time, the exec chooses one of the homes without input from the rest of the family. The other half, the spouse flies in and views the top few homes and a selection is made together.

This buyer is the most high-quality buyer in the marketplace. He or she is extremely qualified – these kinds of relocations are expended mostly on top-tier executives with commensurate salaries. The executive is motivated – he or she needs to locate a home as quickly as possible in order to settle the family comfortably into their new surroundings. And the situation for the exec us usually urgent. There is a limited amount of time for home viewing as the start date in the new city is already set.

For Sale By Owner homes miss out on these ideal buyers by not having their homes listed with a Brokerage Company and having their home listed in the MLS. Even those FSBO’s that do have their homes in the MLS frequently miss out on these buyers when they cannot accommodate showings on the agent’s schedule. Of course it makes sense to a FSBO seller that if someone is truly motivated to see their home, they would be willing to come back a day later after work, or perhaps to a Sunday open house. But these sellers fail to realize that the agent leading the tour will simply select a different house that meets the criteria for the exec AND fits into their busy showing schedule.

I’m always amazed at homeowners trying to sell their homes on their own – but cutting corners. This house is available for over $1-million and yet “the under-a-buck” for sale sign is in the front window promoting the sale. Homeowners – Google ‘real estate signs’ and spend the $100 on a professionally made sign. This is the most expensive thing you’ll ever sell, and you’re trying to save tens of thousands of dollars on marketing costs. A well made sign may be the very best investment you’ll make in this endeavour.