Is FSBO the New Industry Standard?

3 months ago
Andrew Bazan
9

There are a lot of misconceptions we’re led to believe about the For Sale by Owner (FSBO) and For Rent By Owner (FRBO) market. However the digital age is empowering more people than ever towards making their own deals and saving thousands on the realtor’s commission fee.

Realtors VS. FSBO and FRBO

FSBO and FRBO is more common than you think. For instance, in France FSBO accounts for 40% of all residential real estate transactions. In the U.S., it’s only 8%. Why such a large discrepancy? Most people in the states are led to think they simply can’t handle FSBO, or there are certain benefits to working with an agent.

For instance, many believe that their home will sell for more with a realtor, but that’s simply not true. Independent studies by Stanford University and Northwestern University concluded FSBO sales were 4 – 7% higher than if a realtor had been involved. Other studies, which disagree with this premise, are funded by the National Association of Realtors (NAR).

The selling process is also much faster with FSBO. While agents have other clients to focus on, you can place the listing yourself and adjust as needed, without waiting for a third-party to do it for you. More than that, the listing will reflect your authentic voice as a homeowner. You know best all of the features that make buying your property a worthwhile investment.

If you still feel you’re lacking experience or knowledge, you can easily hire professionals like real estate lawyers to take care of certain tasks for you, for much less than the cost of an agent. For instance, a lawyer can draft contracts and leases as well as any financial documents that need to be secured. An attorney offers sound legal advice and helps you review all transactions.

Why Technology Changes Everything

FSBO and FRBO is quickly proving to be more than just a trend. Increased access to technology and inexpensive tools are the cause of this meteoric rise. Today nearly 92% of consumers conduct online searches for their next new home. This places more authority in the hands of landlords and homeowners, who save the money they would have spent on a real estate agent fee.

The increased use of dynamic technology has some pretty major implications for realtors and brokers moving forward. Online marketing tools level the playing field for those favoring FSBO and FRBO options. This new empowerment has taught them a valuable lesson that brokers have been trying to cover up for years: homeowners are more than capable of handling the task.

Anyone can access and use local real estate data. Anyone can stage their home and snap photos for listings. Anyone can host the perfect showing. And they can do all of this from their home offices. This means homes, condos, and apartments spend less time on the market and you don’t have to wait for a middleman to accomplish pressing tasks.

How to Find FSBO and FRBO Success

Smart consumers must now find new approaches for selling and renting to succeed in the market. It doesn’t take long for first timers to quickly see the benefits. The average consumer will save the 6% commission on the sale of their home. So if a property is sold for $250,000, then the savings is $15,000. This is money that can be invested back into the property, or for a future one. So how do you snap up some of these benefits on your own?

Many new companies are opening their doors for exactly this purpose. beycome, for instance, offers the tools you need to market your home and maximize its value. More than just a Multiple Listing Service (MLS), it gives detailed instructions to guide you through the FSBO or FRBO process with access to local professionals, such as real estate lawyers, to complete the sale. These businesses do not take the standard 6% but rather a much smaller one-time fee.

Homeowners can easily prepare for FSBO or FRBO by:

  1. Gathering important documents: the title and deed to your property, financing documents, insurances, and a final budget for how much you want to spend on renovations before selling.
  2. Hiring a professional appraiser: the cost is low and the benefits are high! An appraiser will tell you the value of your home and what fixes need to be made before you hand over the title to a buyer. They also give documented proof of these items, which will help you out when you’re negotiating the selling price of your house.
  3. Get the listing details: once you choose a range for your selling price, write out the details of your property, such as square footage, number of bedrooms and bathrooms, and the unforgettable details that make your home unique. Once you take the proper photos, simply place the listing online.
  4. Marketing: create signs, flyers, posters, hand-outs, or other materials for listing and showings. Don’t forget to add links to the listing on your social media sites like Facebook!
  5. Closing: once you confirm an interested buyer’s qualifications, now’s the time to coordinate with a real estate lawyer for closing documents and details.

Of course this is not an all-inclusive list by any means. But it does give you a good idea of how FSBO or FRBO tasks can be handled on your own.