The business model for selling a home these days has changed, an industry executive said Thursday at the FSBO Publishers Association conference in Las Vegas.
With real estate in the dumps and homes lingering on the market for months, homeowners are turning to "hybrid" selling options ranging from a listing on the Multiple Listing Service to full service at a discounted commission rate, said Wayne Strobel, principal of HomesByOwner.com.
The "For Sale By Owner" movement is growing among homeowners who feel frustrated by the marketing efforts of their Realtors, he said.
"The Internet is a big force in it," Strobel said. "There's a whole slew of new services by brokers helping owners. Of course, the NAR (National Association of Realtors) wants to count it as MLS and, in reality, it may be."
The bottom line is homeowners pay a flat fee starting at $800, regardless of home value, which allows them to price the home where it needs to be, FSBO Publishers Association President Dale Pearson said.
If it's a $100,000 home, Realtors are probably going to list it at $109,000 to cover their commission and marketing costs, he said.
"They'll tell you they have some kind of magic dust to sprinkle on your home and make it worth 6 percent more," Pearson said. "Buyers are more educated, more prepared than ever before and they're more likely to make an offer on a reasonable price."
The market isn't what it was two or three years ago, he said. Buyers want to negotiate, so listing that $100,000 home for $102,000 and getting an offer for $98,000 allows you to split the difference and get the full value, Pearson said.
Establishing the right price is the absolute key to selling a home, Strobel said.
He suggests using a market analysis or comparable sales report to find the asking price and actual closing price of similar homes in the neighborhood. It's an inexpensive way to get started, he said.
Pay $250 to $300 to get a professional appraisal, which takes the guesswork out of the equation for both the seller and buyer, and then advertise the home $2,000 below appraised value, Strobel said. Without having to pay a commission, you'll still net more in the end, he said.
For example, if a house sells for $200,000 through a Realtor, the seller pays $10,000 to $14,000 in real estate commissions. If the seller prices the appraised $200,000 home for $195,000, it probably sells in less time and the seller walks away from the closing with more money.
"It's a tough market. You need some advantage in today's market," Strobel said. "Everybody's out there looking for deals and they're afraid to buy. This puts their mind at ease and the appraisal becomes a good deal. Overpricing means you'll spend time, money and effort and get nothing for it, except discouraged."
Strobel also suggests sellers "spruce up" their house, clean the interior and remove any clutter. "Everybody talks about 'staging' your house," he said.
Contact reporter Hubble Smith at firstname.lastname@example.org or (702) 383-0491.