Over 85% of For Sale by Owner homes fail to sell. Why??

Our friend Loreena Yeo, a Realtor in Texas, offers some excellent reasons. Her remarks are well worth reading.

Failure to price correctly - It is usually because of the bottom-line price that most Sellers decide to sell their homes For Sale By Owner. Here in Texas, we are in a non-disclosure state, which means the sold prices of homes are not publicly published. We feel that it is nobody's business how much someone pays for his/ her property. With that said, it makes For Sale By Owner sellers find it challenging to find out how much his/ her neighbor sells his/her house for.

Sites as such Realtor.com, Trulia and Zillow may give a For Sale By Owner a sense of how his/her neighbor is pricing the property, but in the real estate business, we know more people (including Realtors) are more positive about pricing their home than what it really can bring.

Zillow readily admits many of its Zestimates are not accurate. Zillow comes up with a mathematical formula based on what it thinks the owner has a mortgage and other external factors to guess its market value. For instance, if a home has foundation issues, Zillow would never be able to figure price adjustments for the property.  In addition, as a regular homeowner that does not work with buyers often, how do you know how much "premium" today's buyers would pay for amenities?

Failure to market effectively - Real marketing dollars go into marketing the property to give it its maximum exposure. Maximum exposure brings in traffic and showings. With enough showings, there should be enough serious interests assuming you priced your home correctly.

Some For Sale By Owners may be more successful than others simply because of location. If it is located on a busy street where many people constantly drive by, may see that your homeis for sale. At the same time, a home located on a busy street may not be highly desirable. The traffic noise and the safety issue of young children playing in the front yard are real factors home buyers consider when deciding to buy a property.

Many home sellers are also unaware of the latest tools in home marketing technology. Many For Sale By Owners still advertise in the newspapers. It costs over $300 per week to advertise a property for sale on the Dallas Morning News. It would easily costs over $1,000 just to market a property for sale in 30 days. Heavy marketing is usually done upfront (60 days) to bring in the maximum number of showings.

Case in point - A successful real estate agent turned trainer tried to sell her home recently. After all, she was very successful in the real estate business. It would be silly to not sell the home herself. She has an active real estate license, but that's about it. She also sold homes successfully in the past utilizing the skills of the day. She paid over $700 in newspaper ads, with still no interests. She thought to herself, "The real estate market must be bad. There are no people looking at houses". So, she thought to herself, maybe she should do a price reduction and re-advertise her new price for the next 2 weeks. Still no takers. She did another price reduction. By now, she was frustrated in selling her home herself. Plus not having any showings while still needing to keep her home in top notch condition were just not fun. She decided to call her Real Estate agent friend to list with her. Not only did she sold her home 2 weeks later, they relisted it back to the original price she first put it on the market. This lesson taught her with the right market exposure and correct pricing, any home sells.

There are also Flat Fee listing service that For Sale By Owners can put their homes for sale on the MLS. A Real Estate Broker must provide a minimum of service to you as a client. There is no policy simply to list the home on the MLS.

Failure to recognize that a real estate transaction goes beyond bottom line numbers - How much you walk away from the transaction is highly important in the home selling process. Many sellers may decide to sell (or not) simply based on this number. However, in a real estate transaction, there are just as important factors to consider such as contingencies that lead up to closing (buyer financing, property approval, buyer's sale of other property, HOA and title commitment contingencies and possession of property). Although even the best Realtor(R) cannot guarantee a bullet-proof transaction, one with more expertise and experience can see through some potential setbacks that most Sellers may not recognize upfront. When an offer comes in, the battle is only half won. How you take your transaction from start to finish depends many highly trained skills that most Sellers do not recognize.

The Miranda warning, You have the right to remain silent. Anything you say can and will be used against you in the court of law - used by police officers against suspects applies in Real Estate too. Real estate professionals (the good ones) are trained to read between the lines about what you say. As a regular home seller without much experience, more often times, you will volunteer information even without your realizing it. In real estate,  knowledge is power.

Can a For Sale By Owner sell his/her home successfully? Yes, for sure. There is higher success if you price a home correctly, market it effectively and watch the transaction beyond the bottom line numbers. The National Association of Realtors(R) NAR reports thatabout 14% of For Sale By Owners are successful in selling their home and over 80% of these sellers who are not successful eventually list with a real estate brokerage.