Why FSBOs Fail - The Real Story
Sure (you’re thinking), real estate agents are ALWAYS going to tell me they are better than selling “By Owner.”
Agents are both “agents” and “salespersons.” As agents they represent you and provide advice and guidance. As salespeople, they don’t earn an income if you sell by owner. So…they will always tell you that selling by agent is better than selling by owner, and they will give you lots of reasons why that is true.
A lot of those reasons are valid.
But that’s not the point - not what we're here to talk about today.
You see, a LOT of what homeowners think about real estate just isn’t true.
Homeowners see the agent put a sign in the front yard, they see ads in the newspaper, they see the agent holding open houses and they see the online listing of their home.
So when attempting to sell by owner, homeowners copy what the agent does. They put a sign in the yard, hold an open house, run an ad in the paper, and put their house online on some site that very buyers people ever visit, much less buyers from the local area.
About ten percent of FSBOs sell their home successfully.
About ten percent of homes listed by agents get sold by the listing agent.
You see, agents do things that homeowners DON’T see and don’t even think about.
They talk to other agents.
Most listing agents are NOT trying to sell your home directly to a buyer (though some do). They are trying to convince other agents to sell your home.
That’s the secret.
How does it work?
Well, they try to get other agents to “preview” your home. You aren’t home when they do this, so you don’t actually see it happen.
There are two types of previews, and both aren’t necessary, but the “office preview” can be really fun to watch. One day a week, agents in big offices have an office meeting. They discuss all kinds of neat stuff, have guest speakers, then they pile into a bunch of cars or even a bus, and drive around to all the office’s new listing.
When the office agents arrive at a listing, they all pile out of the cars and start walking through the house in this big long snake-like single file as if they are playing “follow the leader.” They go through very quickly because most have been in similar houses before and they just want to get the “general feel” of the house. Then they get back in the cars and go to the next new listing.
Some of those agents might have clients interested in your house.
The other kind of preview is “broker preview.”
For this, there is a set time once a week where all the new houses are “open”…but not open to the general public. They are open to other agents. Your listing agent sits in the house and “waits” for the other agents to appear. But…these are crafty agents. There isn’t time to visit ALL the new listings, so sometimes they have to be “enticed.”
So those are two things that your listing agent might do, that FSBOs cannot do. And they work. They spread the word about your house to other agents who have buyers that are looking for houses.
Wait, there’s more…
You probably think these are the flyers sitting in your house to highlight all the good things about your house. Sort of. But these flyers aren’t sitting in your house and they may have some different information on them than the flyers sitting at your house. Your agent may have printed one up for every single agent in the local Multiple Listing Association.
They don’t deliver them personally.
There is usually a guy that makes a living just by delivering flyers to real estate offices. Did you know about this? He takes all the flyers and puts them in a big collating machine in his garage and it creates an entire STACK of flyers for each local agent.
Then he delivers one stack of flyers to every agent.
What does the agent do with this stack of flyers?
Truthfully, some never even look at them. Others will pull their chair out from their desk and lean over their waste paper basket. They will look at the flyer and most will get tossed in the trash.
“Bad location.” Trash.
“Poor condition.” Trash.
“Too pricy.” Trash.
“Discounted commission.” Trash.
“No client for this house.” Trash.
And…some flyers will end up in a stack on the agent’s desk.
Because they fit the needs of one or more of the agent’s buyers.
Once again, your agent is marketing your house, not directly to buyers, but to agents who have buyers looking for houses.
Meanwhile, your listing agent is talking up your house to all the agents they meet.
And then the bonus.
The Multiple Listing Service.
You probably think it is like those listings you see on line. Sort of, but with much more detailed information, and there is another difference. On line, you are just reaching one buyer who is looking for a specific type of home at a certain price in a general location – maybe.
With the MLS, you are reaching people who know exactly what they are looking for and have several buyers who might be interested.
Those are the things that sell your house - things you don’t even see the listing agent doing. The sign, the newspaper ad, the online listing…why don’t they work?
Suppose someone calls on a newspaper ad about your house.
Very few people buy the house they call about.
They buy another house. One the agent knows about. The agent has an entire INVENTORY of houses to sell.
You only have one.
And you only have one shot at the buyer.
And very few people buy the house they call about.
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