For Sale By Owner Programs Offer Sellers an Edge
MEMPHIS, Tenn.--(BUSINESS WIRE)--When homeowner Michael Meyer carefully positioned a for sale sign in front of his Detroit-area house in late March 2006, he joined the increasing ranks of individuals who are choosing the proverbial road less traveled - the for sale by owner route.
Three months later, Meyer was back in his yard - this time triumphantly plastering a SOLD banner on the sign.
As the U.S. real estate landscape has transitioned into a buyers' market the last few years, thousands of homeowners like Meyer are competing with the surplus of homes by getting creative and turning to a new pool of agents - themselves. And the strategy seems to be working, shifting the FSBO model from the road less traveled into a dynamic and heavily trafficked real estate expressway.
In addition to selling the property more quickly than neighbors, Meyer said he saved $14,334 by not having to pay commission to a real estate agent. The secret to the many do-it-yourself successes like Meyer's? Look no further than the Internet.
According to the 2005 National Association of Realtors® Profile of Homebuyers and Sellers, 77 percent of homebuyers began their search on the Internet. Detroit-based magazine publisher Steve Mallires recognized this burgeoning trend in 2002 when he became an affiliate of HomesByOwner.com, http://www.homesbyowner.com/detroit/.
According to the company partners, HomesByOwner.com boasts the largest network of FSBO affiliates ever and is the oldest and most established FSBO Web site in existence. The site - present in more than 685 metropolitan areas across the country - has almost 200 sites locally owned and managed by people like Mallires, who are looking to provide cost-effective ways for sellers to sell their homes in today's competitive market.
As the owner of the local For Sale By Owner magazine in the Motor City, Mallires believes the HomesByOwner.com site and others like it have evolved into highly functional, feature-packed sites that allow homeowners to showcase homes to potential buyers while reducing costs.
According to industry net rating reports, the most trafficked FSBO sites include ForSaleByOwner.com, HomesByOwner.com and Owners.com. Internet destinations such as these have become valuable marketing tools for FSBO sellers, especially those in hard-pressed markets like Detroit.
"The local economy is in rough shape due to our dependence on the automotive and manufacturing industries," Mallires said. "High-ticket expenditures like real estate have taken quite a hit as companies are scaling back overtime, trimming jobs and creating an environment of uncertainty. Days on the market are up, and median sales prices are down. Fortunately, our business model provides a lot of value in both good and slow markets."
Meyer, who used Mallires' program, believes the homes by owner approach is the way to go in today's market. In fact, the next time he needs to sell a home, he knows exactly where to go.
According to Wayne Strobel, president of HomesByOwner.com, sellers around the country are looking to FSBO programs to give them a competitive edge in an overly saturated market. The first advantage - competitive pricing.
"Sellers can be more aggressive and competitive with prices, yet still net the same amount at closing as the seller of a similar house who is paying a full commission," he said. "Sellers can then pass the savings to the buyer and beat out that seller down the street."
Mallires agrees competitive pricing truly sets FSBO sellers apart.
"Our no-commission program allows customers' homes to get fantastic multimedia exposure without the commissions," he said. "Their homes, therefore, have the ability to be the best priced in their respective neighborhoods and the logical choice for buyers."
Craig Jackson, another Detroit-area seller and Mallires customer, credits the program with allowing him to set a lower, more attractive asking price. The Internet ad placement was instrumental in selling his home in a little more than a week.
Strobel cites other advantages for sellers who choose to sell their homes on their own.
"Homeowners can invest the commission savings beforehand into sprucing up the house with paint, carpet or landscaping," he said. "By spending the amount they would have paid for commission on updating the house, they can increase its marketability - which is paramount."
Going the FSBO route also affords homeowners such options as offering strong incentives to buyers at closing, such as paying closing costs, paying points toward buyers' loans to reduce interest rates or giving decorating allowances.
"These opportunities really can make a home stand out from the competition," Strobel said.
Though various forms of the for sale by owner model exist - those with zero commission to sellers' agents, additional seminars to guide sellers through the process and lease-to-purchase options - they do share a purpose, according to Strobel. They all provide sellers with the ability to choose a program to best suit their financial needs and make them more competitive in today's increasingly challenged market.
"FSBO programs like ours are here to help get homes sold," Strobel said. "And it's a trend that shows no sign of decline."
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