Thursday, October 20, 2005

Debunking the do-it-yourself myth

This is for everyone who asked for more information about educating sellers on the risks and perils of selling on their own. If you have a company who is strong in marketing your area with FSBO material, compare their sale values to sellers, and show them that these companies are not saving these people money. I've written this in a tongue and cheek format as if the seller is my friend, and he's my hero, so I applaud his genius. Let me know what you think, and if you have any ideas that work for you.

You go girl!

Wow you're going to sell it on your own…Congratulations! You are on the verge of being a do it yourselfer. I mean how hard can it really be? You’ve pulled your own children’s teeth, you don’t need to take them to the doctor when their sick because you’ve made a home remedy, for them and you do all your own investing and research online. You’re definitely ready. Don’t let those agents tell you how expensive it is, they’re just trying to trick you. Trust those web companies that say you can save thousands. Why trust them - just because they’re unregulated, and they say they have professional service, doesn't mean they won't mislead you does it? And who needs errors and omissions insurance anyways? Its not like you’re going to get sued are you? I mean honestly, that’s what a lot of buyers are afraid of but you’re not one of those sellers selling on their own because you have something to hide, that’s not why you’re using one of those so called pesky agents because they ask some tough questions, and besides, you are perfectly capable of handling the family nest egg. You are brave beecause that's a lot of money but you invest that much with out the aid of a financial advisor don't you?

So back to trusting these web companies… I mean they have great ads, and the costs look reasonable, don’t they? They may even help you price your home, and that’s the best idea I’ve ever heard, how do they do that? These guys really know what they are doing, don't they? So you pay them a fee before you sell, and if you pay some extra fees, you get some extra services. They’ll even recommend you to a professional or two that can assist in the transaction. This is so great it’s the next best thing to sliced bread isn't it? Sounds too good to be true, tell me more.

Forget those goofy rumours that you will sell under market value. You can afford to, right? Besides, you’re not using an agent so you can undercut the market becasue you're not paying an agent. Perfect you’re set. Oh yeah…forgot the marketing, it may take more than the sign on the lawn and their internet ad which looks great (sort of) but that’s ok, 95% of the buyers buy MLS listings so you’re only going after 5% of the buyers anyway, so that shouldn’t cost too much to market to that small group. Maybe you should pay for some of that extra marketing the nice person at the do-it-yourself place said they had available just to cement the deal.

Ok, so what now? Oh yeah, you negotiate with your kids every day, negotiating with the buyers of your house should be no problem. Knowing what to say and when to say it can’t be that big of a deal. Besides, everything they tell you will be accurate, and they won’t string you along or go for last minute concessions or anything like that. It’s probable they won’t even have an inspection or have any problems with the inspection.

Alright you’ve negotiated the offer but the price is a problem. You’re saving the commission so the buyers don’t want to pay you the commission. Split the difference - that’s a great idea, seems fair. That way, you save half the commission you would have paid one of those pesky agents. Oh yeah, you have the time you spent marketing, showing and negotiating and the learning the ropes, the costs of the marketing you paid the do-it-yourself company - you’re ahead right? Well you priced below market to get activity from buyers, the negotiating didn’t go exactly the way you wanted it to, and you have the costs and your time. What do you mean you might not have saved any money? You didn’t lose money did you? Well $1200 is better than nothing. You did lose all that family time and the extra stress, but you at least didn’t have to hire an agent. You’re my hero but I’m not as smart as you, I’ll probably have to use an agent.

Bottom line

  • There are costs to every transaction
  • The market is more complicated than just a sign and an ad
  • Negotiations can be complex and ongoing, and mistakes can be expensive
  • Your time is money
  • The buyers are looking to save the commission too
  • The more exposure you have, the more likely you’ll get more money - that is an economic reality
  • Lawsuits are a major reality for sellers, just look at all the court cases of sellers being sued for saying something or not say something. This in the end will be your undoing


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