Typically, when selling a home, you partner with a real estate agent and agency for marketing support. With the growing for sale by owner (FBSO) market, however, homeowners are venturing out independently in an attempt to secure a sale. This can create significant barriers to success, compared to selling the same home via an agency.
How can you build market appeal for an FSBO home? It’s all about knowing your audience and using the many tools at your disposal. In the age of social media, you don’t need to be a marketing expert to succeed – you just have to be a savvy digital citizen.
FSBO In Decline
According to the National Association of Realtors, FSBO sales are at an all time low, constituting just 8% of all sales in 2015, and for those committed to independent sales, there are real challenges. For example, FSBO take 19 days longer to sell on average and they sell for about $41,000 less. How can you make up the gap?
One key way to improve sales for your FSBO property is by learning the lingo that makes a home sell. This is what real estate agents do when they put a home on the market: they identify the characteristics and keywords that reel buyers in such as hardwood floors or marble counters. When you find the right language to promote your home, you make it more likely to sell and to sell at a higher price.
Know Your Audience
It’s much easier to sell a home independently in some areas than others, so if you’re going to go the FSBO route, pay attention to your community. Not only is selling your home more common and simpler in some places, but areas vary in popularity based on the support site used. For example, Florida has the greatest number of homes for sale, while the state of Oklahoma has very few. If you’re marketing your home, then, it’s important to choose a site where your state is well represented. You want to be part of a community.
In addition to choosing the best site to support your FSBO efforts, you need to understand which buyers are most likely to engage in the FSBO process. Millennials are the most likely to buy or sell via the FSBO route, so you’ll want to choose marketing strategies that appeal to younger buyers. This is why social media marketing has become more important in real estate. By putting a little money behind boosting social media advertisements for your home, you increase the likelihood of a quick sale with higher profit margins.
When trying to build property appeal, real estate agents typically take numerous high-quality pictures so they can provide a digital tour. Do you have the tools to do this yourself? Probably not – but for less than the cost of hiring a real estate agent, you can hire a professional photographer to take tour photos. If buyers don’t have a good first impression of your home online, they won’t come see it in person – and that’s when sales are closed.
Be Price Wise
As noted above, FSBO properties typically sell for far less than homes sold by real estate agents, but there are several factors that need to be considered in this observation. First, when selling without an agent, you don’t need to pay a commission, which can result in significant savings depending on the price of your home. Second, current market conditions are such that, despite the lower sale prices of FSBO homes, buyers are spending more than expected on homes. In other words: don’t be afraid to ask for more.
With buyers spending over their budget on homes, many FSBO sellers are receiving bids above their expected price, even if that price is below what a real estate agent could close for. Since most sellers are more than happy to close for their minimum asking price, especially when working without an agent, few see these lower sales prices as a loss.
The Future Of Sales
Many real estate insiders expect that online sales platforms and FSBO sites will displace the traditional real estate industry in the near future, but in reality this migration is uncertain. As an FSBO seller in the here and now, though, the most important things you can do are understand basic sales trends and put them to work. If you can write a description of your home that makes it sound appealing, and if you can research local sale prices and understand basic home appraisals, the DIY approach can put control back in your hands as an owner. Add to that the support of innovative FSBO sites and real estate tools are going mainstream.
As millennials become more financially secure, the FSBO process is likely to gain more traction – the younger generation feels more empowered to manage the sales process independently. As the most social media savvy age group, they’re may be the generation that can act as their own liaisons, reimagining how we’ve approached real estate for decades.
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