For Sale By Owner (FSBO) Statistics

Did you know?

FSBO Methods Used to Market Home:

Yard Sign . . . 50%
Friends/neighbours . . . 29%
Newspaper ad . . . 31%
Open House . . . 25%
Listing on the Internet . . . 21%

Most difficult things FSBO's Found
Getting the right price . . . 15%
Understanding paperwork . . . 18%
Preparing/fixing up home for sale . . . 15%
Attracting potential buyers . . . 9%
Having enough time to devote to all aspects of the sale . . . 7%

Source: 2007 National Association of REALTORS® Profile of Home Buyers and Sellers

HomesByOwner.com/Guelph can help with all these factors. Over 80% of people begin their home search on the Internet. We list your Home on FOUR websites. You need expossure to sell your Home. We can also help with pricing, paperwork etc.

FSBO is the way to Go!!

“Home Seller Consumer Insights; 2002-2003”
by Realty ViewPoint. The report concludes that
people that sell their home on their own typically
see 6% more in gross profits on the sale of a home.
This number increases to 29% when commissions
are included in the calculations. Also, people that
sell their home on their own typically sell in 8.1
weeks, while real estate agents take, on average,
11.5 weeks to sell a home. These conclusions show
statistical evidence that there is both a time and
monetary benefit to selling a home privately.

HomesByOwner.com/Guelph

We can help you save money and sell your Home for less than The Other GUYS!

Selling a home with an agent costs approximately 5% + GST. 5% of your home’s value usually ends up costing the home owner $15,000 - $20,000. Ouch! But is that 5% the correct amount? What percentage does using an agent really equal when you compare that to your actual home equity (ie - without your mortgage). Let’s do some more real estate math…

Your home is worth $400,000
Your mortgage is $250,000
Your equity is $150,000

So if you sell your home with an agent at 5% commission, you will need to pay $21,000 in commission and GST.

Now you have $379,000 from the sale of your home, but you need to pay back your mortgage of $250,000. So the amount of money that you have in your pocket is $129,000. How much did that agent cost you? What was the actual commission rate? You actually paid more than 14% of your own money in commissions ($21,000 / $150,000).

With HomesByOwner.com/Guelph, you now have the choice to sell your home and keep $150,000 instead of selling your home with an agent and keeping only $129,000.

Contact us today to SAVE your equity!!

The Real Commission Revealed!

If you think that a typical commission on the sale of a home is 5% to 6% you may find this article quite enlightening. The figures above would hold true if you have no mortgage on your property whatsoever, as for the rest of the population perhaps 99% of us these figures are remarkably low. When you hold a mortgage on your property, the commission percentage is closer to 60% or 90%. The 6% commission is based on the sold price of the property, but yet the entire commission is taken from your equity in the home, and therefore the real commission percentage is unbelievably higher. With the average commissions in Canada now over $20,000 you should know the facts. We surveyed several mortgage brokers to find out what the average loan to value might be for the average home owner, it is about 75% on properties owned for longer periods and 95% to 100% on recent purchases. It is this high loan to value ratios and low equity property owners that are hit the hardest. If you would like to know what kind of money a listing agent wants to take from you, get out a calculator, pencil and a sheet of paper right now and make sure you are sitting down when you are hit with the real commission percentage answer. If you have any kind of medical condition we would advise you to avoid these calculations. If you experience prolonged headaches, pains, vomiting or diarrhea after completing these calculations please contact your physician right away. Let your doctor know that you have completed these calculations so that he or she may also become aware of the truth. The 3 step formula is simple: 6% of your sales price, divided by your equity in the home = the true commission percentage. Follow these keystrokes; Step 1: Key in your sold price, Times 6 %, write your answer on a sheet of paper. Step 2:Clear the calculator, key in your sold price, Subtract the total amount of all mortgages against your property, Write your answer on the sheet of paper. This is your equity position. Step 3: Clear the calculator, key in the answer from step 1, Divide this amount by the answer from step 2, hit the percent key; this is the real commission percentage answer. Example: $300,000 property, 90% mortgaged and sold with agents Step 1: $300,000 sold price, times 6% = $18,000 (the false commission) Step 2: $300,000 sold price, subtract total of mortgages $270,000 = $30,000 (your equity position) Step 3: $18,000 divided by $30,000 = 60% commission (the true agent commission). Why is this? Because, in step one, the sold price of $300,000 is not the amount that goes to you, the $270,000 you owe to the mortgage company never even touches your hands, the remaining $30,000 has your name on it, BUT, first the agents take out $18,000 (60% of the $30,000) leaving you with $12,000 (less closing costs). Oh Yes, Don't forget to add GST on to that Commission!!! So have a Tylenol and remember… Save Thousands, sell your Home your self!!

Developing Your Marketing Plan

GETTING THE HOME READY

A potential buyer should have a good impression of your home. Chipped exterior paint, loose gutters, overgrown shrubs and lawn, marred interior walls, cluttered closets and counters, and stained or dirty carpets are simply unacceptable to home buyers. These are all examples of problems that are easily resolved with very little expense. The objective should be to get your home in good condition with minimal expense. Make the decision of what must be replaced or repaired and get it done. Painting some, or the entire interior, is usually necessary and should always be done. Fresh paint is clean and clean is mandatory. Clutter must be eliminated because clutter, whether it’s in the closet, on the counters or on the walls, closes-in space and will make any space look smaller. In some situations, it can be advisable to even remove some furniture. If you’re selling your home because you need more space, then chances are you have more furniture than the home can really accommodate and probably, more clutter. The feeling someone should have when they enter your home is that it’s well maintained, spacious and clean.

Getting your home ready to market does not mean renovating. In fact, it’s probably the worst thing you can do because you most likely will not recoup the expense of renovation. The most recent national figures provided below indicate the cost vs. resale value for various home remodeling projects.

If you decide that remodeling a certain area of the home is absolutely necessary to achieve a sale, then make sure that the job conforms to the home and the neighborhood... in other words, don’t over-remodel. Homes that overachieve in their neighborhoods often underperform on the resale market.

MARKETING THE HOME

You’ve got a house to sell and it’s time to let the world know it. First determine your budget. Recognize that you may well spend $500 to $1,000 advertising your home. Next, target your market. Answer the question: "Where do people find homes for sale in my price range"? Don’t waste time, effort and money advertising in a local shopping paper when you’re trying to sell a $400,000 home... it's not where your buyer is looking.

SIGNS
First and foremost, have a professional, easy-to-read yard sign. The sign should clearly say that the home is for sale by owner and should have the owners phone number in large bold print. Do not go to your local hardware or discount store for signs. Presenting your home in an attractive professional way is essential and the typical red and black "house for sale" sign found in stores is not the answer. The sign should also say that the home is shown "by appointment only". There are many reasons for this. You should always be prepared for a showing and setting appointments is the only way to be properly prepared.

Some buyers find a home simply by riding around in the neighborhood where they would like to live. Many homes are sold as a result of signage alone and its value should not be underestimated.

ADVERTISING

INTERNET
Advertising your home on the Internet in today’s world is not something you need to think about, you just do it. You do need to make the decision where on the Internet you should advertise. Creating a home page and putting your home "out there" should not be an option. Your ad, and your home page, will simply get lost. Advertise on a site that has hundreds of other homes for sale. The best approach is to go to the various search engines, i.e. Yahoo, Netscape, Internet Explorer, Snap.com, etc. and search "for sale by owner homes", "FSBO", "homes for sale by owner", etc. Find the sites that have the most merit. Visit the sites and manuever around in them. If they’re difficult sites to find and they’re difficult to navigate once you’re on the site, then you don’t want your home to be there. Prospective buyers will have the same feeling and will simply "click off" the site and go somewhere else.

HomesByOwner is convinced that this is the site where your home should be advertised. It’s easy to navigate and displays the home exceptionally well. Internet ads should be the same as your other ads, complete with photograph and a full description. In the Guelph Wellington Area your Homeis advertised on FOUR websites.

NEWSPAPER
You must consider this a primary source for advertising. Be careful that you get your moneys worth. If the newspaper offers photographs in the ad, do it. Do not advertise on a holiday weekend, rates are cheaper but there’s a reason. Provide the basic information especially price. Many sellers think they will generate more interest if you don’t put a price in your ad... all you generate is more phone calls from people who probably aren't interested once they learn the price. Target your market by including all pertinent information about your home. You do not want people calling you who either can’t afford your home or who want something you don’t have.


INFORMATION SHEETS/PHOTO FLYERS
These are a must. They should be in a tube or box attached to your yard sign for prospective buyers driving in the area, as well as having them available inside the home. Providing these can substantially eliminate unnecessary phone calls. Again, if you don’t have what a buyer wants, you really don’t want to even hear from them. Information sheets are inexpensive but vital. They should provide a photograph and a complete description of the home.


OPEN HOUSES
This type of marketing can be very successful for a builder with a new subdivision but with existing, owner-occupied homes, it’s questionable. First of all, if a prospect has driven by the home, seen it in a FSBO publication or the local newspaper, chances are they would prefer a private tour. They already know the price and the amenities of the home. Generally they want to ask questions and get very detailed responses. Also private showings allow you to ask questions of your prospect that you probably would not ask during an Open House. Last but not least, you can lose control in an Open House. What if thirty people show up and start heading in different directions? You must control showings and you want feed back. It just doesn’t happen with an Open House.

It’s interesting that different parts of the country view Open Houses differently. In some major Midwest cities, for example, Open Houses are expected if you’re going to sell but in similar size cities in the South, having an Open House is the exception rather than the rule. Therefore, you may need to adjust your marketing strategy to local custom. If having an Open House is expected in your market, then by all means, do it.