How many buyers must see your ad before you get an offer? How many buyers will respond to your ad if you’re asking $30,000 over market value for your home? What do you do once you receive your first purchase offer? This article will help you be prepared to address each of these questions because you’ll need to when selling a home on your own.
How many buyers must see your ad before you get an offer?
The short answer is: As many as it takes. There is no secret formula for the quantity of advertising that must be done as a for sale by the owner (FSBO). The general rule of thumb is “the more, the better”. Most FSBO sellers that end up listing with a real estate agent underestimate what is required in the advertising department. They think posting a sign in the front yard and making some flyers to hang in local grocery stores will be sufficient. Some even think posting an ad in the local newspaper for a weekend will do the trick. While these are all good things and highly recommended, they should not be the only things done.
Around 75% of all buyers begin their home search on the internet now. In case you weren’t paying attention let me just say that again. Around 75%, or three-fourths, of all buyers, look on the internet first when shopping for a new house. How should that statistic be interpreted? Well, it seems fairly obvious that placing an ad on the internet is pretty much an absolute must. There are a number of web sites where for sale by owners can advertise their home for sale with a mountain of details along with a variety of photographs. Buyers love information, so provide as much as you can.
How many buyers will respond to your ad if you’re asking $30,000 over market value for your home?
The short answer is none (unless they are total suckers). Pricing your home fairly and according to market value is one of the most important things you need to do as a for sale by owner. If a for-sale-by-owner prices their property too high, there is a good chance of little or no buyer response – no matter how much advertising is done by the seller. Contrarily, if a house is priced too low, there will likely be an enormous response and the seller may end up taking $1000’s less than they should. Pricing too low isn’t as common as pricing too high, however.
The problem is that most FSBO sellers overprice their homes, and as a result, they get little response. With little response, the seller grows tired and/or loses confidence that they can sell on their own, and they eventually hire a real estate agent. Often, the real estate agent will simply help the homeowner price the home better and a buyer suddenly appears.
You can find out the market value of your home by ordering a professional appraisal ($300-$500), using an electronic appraisal service online, or by requesting a Comparative Market Analysis (CMA) from your local real estate agent. Without knowing the market value of your real estate you are just guessing. Do you have the time to waste while you try to guess right?
What do you do once you receive your first purchase offer?
Real estate agents charge between 3-6% of the final sales price of a property. Avoiding this cost is one of the major incentives for most FSBO sellers. But by avoiding the Realtor, the home seller also forfeits the agent’s experience and know-how. This void causes many FSBO sellers such as heartache and distress that a successful sale is often not achieved, resulting in the eventual hire of the agent.
Wise FSBO sellers fill the void created by the lack of a real estate agent. Some do this by using their own experience and doing their own research. Others do it by building a team of professionals who will be involved in the transaction anyway: a mortgage broker, a title company, an appraiser, and possibly an attorney. These professionals have oodles of experience when it comes to completing the transfer of real estate from one person to another. They know what is required in their particular niche and they can often point a seller in the right direction when a question arises.
Don’t sell your home on your own without having planned for the three questions listed above. Advertise the fact that your house is for sale like crazy, find out what it’s worth, and make your asking price reasonable, and know what to do once you get an offer.