Dangers of Working with a For Sale By Owner in the Orlando Florida area!!!!
I had a conversation with an owner of a For Sale By Owner recently that shocked me.
Like most FSBO homes, they are overpriced. Not a big surprise -- most For Sale By Owners are valuing their homes on emotion, what their neighbor's sold their Orlando home for two years ago or what they need to get out of the house.
First off, I have to say the property is special in every way, I fell absolutely in love. I want this Orlando home, it is my dream home. It is a lovely lakefront property with fruit trees and lovely garden in a highly desirable community nestled on a quiet street backing up on conservation land. This home has pluses and it has negatives. It is adorable, but the negatives will keep many from purchasing it at reasonable list price, so it is no wonder this For Sale By Owner home is still on the market.
I had great difficulty in achieving the value I assessed to the home by the For Sale By Owner for lack of compatible properties. I could not justify the price that they had it listed for, and I am in love with this Orlando FSBO home. This is the best house, on the best lot, with more upgrades than the average home in this community? Anyone else see a potential problem?
Ok, I don't have rose colored glasses on. There are aspects of this Orlando home that detour most of today's Orlando Buyers! All the bedrooms are upstairs, small bedrooms, only a 1-car garage. Obviously these negatives are affecting the ability to sell this For Sale By Owner home.
After sharing what I thought the home was worth, and why I thought it should be priced at my number, the owner asked that I keep the information between us. They did not want anyone to know what I had come up with. They thanked me for my advice and tips for selling their Orlando home.
This made me stop and think. Why did they not want me to share my valuation? And who would I share this with? Perhaps I should take an advertisement out in the Orlando Newspapers sharing what I think all Orlando For Sale By Owner Homes are worth? What are they thinking? If I let the cat out of the bag they won't be able to sell? I just shook my head and went on my way...
I came up with a couple of thoughts on this particular For Sale By Owner and Buyers in the Orlando Area and the current state of the Real Estate Market in Orlando Florida:
- The For Sale By Owner is stuck on how special the home is and not focused on the ultimate goal - the home SOLD!
- These owners have gotten valuations from several other Realtors who are desperate for the listing (it is an amazing Open House location) so they have told them what they wanted to hear
- Are sites like By Owner, Owners, FSBO, For Sale By Owner Advertising Services and For Sale By Owner helping these owners or taking money ad adding to the frustration to these vulnerable owners?
- This home at this price has competition from larger homes, with more to offer than a special location and charm. Orlando Buyers want to purchase the best home for the least amount of money.
- The FSBO believes everything I just told them, but would rather live in a fantasy world of what was not what is.
- There are some incredible values, reasonably priced Orlando homes on the market. If you are waiting for the perfect time, this is the time to get off the bench and get into the game!
Moral of the Story for Realtors: Provide value to both Buyers and Sellers! If I, the experienced Orlando Realtor can figure this out, what is stopping another Realtor? Stop telling Sellers what they want to hear and get real with Sellers! Buyers and Sellers are using my services because of the value I bring to the table! If I suddenly have a buyer looking for this type of house, I am going to educate them fully as to what the value is.
Moral of the Story For Buyers: If you are shopping the For Sale By Owner market without an experienced Realtor you could overpay and not get the best home for you! Worse yet, you are purchasing on emotion and could be making a mistake unknowingly. An experienced Realtor can provide you with the information you need to make an informed decision.
Moral of the Story For Sale By Owners: If your home is listed FSBO it is important to know that you need an experienced Realtor to guide you through the process of selling your home. If one experienced Realtor came up with that valuation, others might come up with that analysis too! You can't hide the truth, it always comes out... So what is it? Do you really want to sell? Or are you having fun chasing the market down? Can you really afford to keep doing what you have been doing?
This information is provided by Colleen Kulikowski, Realtor. Colleen writes about the Florida lifestyle and Real Estate in Western New York.
If I, the experienced Orlando Realtor can figure this out, what is stopping another Realtor? True
If you are shopping the For Sale By Owner market without an experienced Realtor you could overpay and not get the best home for you! True
If one experienced Realtor came up with that valuation, others might come up with that analysis too! You can't hide the truth, it always comes out... True
100% all true statements!! I love this post, Colleen
Colleen, it is hard to be objective about yourself and your property. Most people do not want to hear the truth.
It is the same way with Borrowers. They fall in love with a house they can't afford. You tell them that you can not qualify them for that much house. So what do they do? They go out and find someone that will tell them what they want to hear, and put them in a negative am mortgage. Once the neg am adjusts and they can't afford the mortgage payment, they claim that they did not know what they were doing.
People have selective hearing, until reality sets in and then they wish they had listened to you.
Missy -- thanks!
Neal -- and sometimes they don't....
George -- the best thing you can do with folks with selective hearing is select to not work with them.
Matthew, that's precisely what i was going to say -- so many FSBO's think they CAN'T afford a Realtor's fees, but they don't realize that the extre months on market, the average lower selling price of a FSBO versus a listed home, and the potential pitfalls that run up a bill can do just the opposite. It just takes them a while to realize that they can't afford NOT to have a professional in their corner!
Great post Colleen --
Great post.
I pursue FSBO's.... Agressivly. They are almost always overpriced, still basing things on last years values. We have about 20% of the market here FSBO. The are on the market for ever!
Some people just dont get it!
The number for Orlandop (Orange County) like everywhere else are declining. Most home owners trying to sell themselves rely on the news, advise from friends and neighbors and the occasional Realtor who will give them current market stats. But the real problem For Sale By Owners face in addition to the ones you mentioned is that they and opportunity buyers share the same objective. To save money. The seller does not want to pay a fee for the marketing expertise to achieve the sale. The buyer sees the Seller is looking to save money by using a Realtor, so therefore feels the seller can absorb what they would have paid in fees. Both parties cannot benefit under this assumption. In addition to chasing the market downward, in almost every case the For Sale By Owner, will no doubt be behind the curve.
Colleen- you win some and you lose some- but knowledge gained is priceless.
This is a terrific post. And, one that I may share with others in my office....Thanks!
;) Pamela
George -- it is best to move on... They either get it or they don't!
Neal -- you are right and that is all you can do is be helpful...
Matt -- there really are not any short cuts now are there?
Ian -- That is our job isn't it?
Jack -- Thanks! It is sad...
Dan -- so very true!
Donna -- Thanks!
David -- Thanks!
Allison --- so very true " Colleen- you win some and you lose some- but knowledge gained is priceless."
Jeffrey -- and we are stupid because we give them a number that they don't like!
Elaine -- it gets even better this FSBO was under the impression that she was going to get a CASH buyer and they wouldn't need an appraisal ...
Irene -- the conditions here change from block to block in many instances!
Chrissy -- Thanks!
Christopher -- Absolutely!
Statistics in New York from the NAR report show that FSBO, when sold, provided a sales price (on average) that was $8,000. plus over what Realtors achieved on average. What this told me is that, for those sellers that ARE successful, there is likely a BUYER that is...not so fortunate. What I wonder about is how those sellers managed to convince the appraisers of the value that didn't exist. And areas like my own that have companies unwilling to pay a buyer agency? Are you kidding me??
hey Laurie M , can you reference that statistic?
I think we need to examine the psychological thought of a FISBO. My hats off to them for trying and sometimes it works. I have no real need to beat up on the poor FISBO. Why should they not overvalue their home? This is their most important possession right? Yes they are not thinking with a business head and hopefully one day they will. Stick to what the comps say b/c the numbers do not lie. don't make them feel like they are the enemy b/c they are not. They will either succeed or call an agent one day. If you are helpful they will call you. If you underlying ridicule them then they will call the next guy. The other guy may have given them a higher price but his presentation may have been a bit softer to swallow. Prices can be adjusted after all. Don't write the FISBO off b/c they are just trying to save a buck. The same thing each of us do everyday.
Colleen,
First, the home sounds just lovely. Do you want to purchase it for yourself. Secondly, sounds like the sellers are very emotionally attached---that's the hard part when negotiating time comes.
Sometimes you just have to think that FSBOs feel that time is on their side... that the money will find them at the right time
in the meantime you have to tolerate their effect on the market...
IRRE -- Rose Colored Glasses are over rated!
Renee -- Thanks!
Laurie -- thanks....
Sharon -- pretty amazing...
Cristina and Kevin -- but if we keep those rose colored glasses on, they will never really understand what it will take to sell their home.
Laura -- true...
Diane -- Can't afford it at the price I came up with so I am not a potential buyer. But it will be interesting to see if they sell or if they decide to take it off the market.
David -- All these unrealistic sellers are making it that much more difficult to sell the homes that are reasonably priced...
Gary -- Thanks!
Lanre -- Thanks!
Great stuff Colleen. We can always count on you to organize and educate. Thanks.
Great advice and thoughts Colleen.......Thanks.
Duane Hosek in the Black Hills of South Dakota
Rebecca -- It is the hardest segment to work with, but it can be rewarding too!
Duane, Victoria & Tracey -- Thanks!
David -- Appraisals are key these days!
Bob & Carolin -- very true!
John -- you always have great advise!
Nice post,
The FSBO companies you talked about, they all charge a non refundable fee to these people, and the main thing of value they offer the FSBO is the sign that the FSBO puts in the front yard.
The FSBO companies all talk a good game about advertising on their websites and how much traffic those websites get, but by my guess at least here in NJ probably 70% of that traffic is from Realtors and Mortgage people looking for warm prospects to market too. So the websites of the FSBO service companies really are not that great of a deal after all.
James Boyer
Colleen, This FSBO Seller is in Fantasyland and unless they are strongly motivated to sell sounds like they have chosen to stay there. Just like most folks in DENIAL, it's almost impossible to break through with the truth.
It is a shame that self serving members of our profession enable their fantasy....
I have never worn any rose colored glasses. Not quite sure what you meat by that one. I just thing we should quite hating on the FISBO. If you put your listing presentation to them with the aspect of being helpful then there is no need to be so analytical about the situation.
It sounds like some of you begrudge them the chance to sell their home themselves. Yes they are at a disadvantage but this is their right.
Would you trade in your car or sell it yourself??? I would sell it myself. The same with my house. After all this America and the choice is ours to have. If you treat a prospect with courtesy then it will come back to you 10 fold. So what if they used you for a little info. I give out free advice everyday. That's part of my job. I just love my job so helping people is what matter to us.
I agree that parts of your story were strange. This particular FISBO was a bit odd. My point was to embrace the FISBO. They deserve the chance to try on their own. You have to examine the psychology of the situation. Understand where they are coming from. The reason these people interviewed so many was b/c they never found the party they clicked with. I do applaud you for being honest I just hope it was not with the tone you took in this email. I am just really sick of agents hating on FISBO's. Not that you are but I feel that tone in these posts. No hard feeling guys. Just love the FISBO. That attitude will get you farther then not embracing their choices.
Sarah -- thanks...
Ginger -- it is hard to believe that there are so many people that are still with their heads in the sand as to what has happened in the Real Estate Market in the past 18 months...
Christina & Kevin -- Who hates the FSBO? As for my comment about Rose Colored glasses, I was referring to myself. I just stated how much I loved the house. I did not name the FSBO or the specific community in the Greater Orlando Florida area. I used this as an example of the many conversations that I have had over the years. That it was important to have a discussion on this topic. WE all share our information freely.
I think that too many Realtors share what the Seller wants to hear not what they need to hear. What needs to happen is that we need to be real. If you believe that you are doing a service by giving them what they want to hear and having them chase the market down that is your choice. Meanwhile it is no wonder the public has such distrust.
The public should have distrust b/c half the agent out there are only in it for their commission. Turn down a client if it does not feel right. I just get sick of agents complaining about the FISBO in general. They have rights guys. That is my entire point. I just hope you did not express your surprise to them although they are interesting as you said. They are just confused. Thankfully you gave them what they needed to hear.
Christina
Christina -- I deleted your comment and reposted here because you placed your websites on it which did not add to the conversation. You make a good point. But they are not confused. They are hoping to find someone who will pay that amount they are asking for. I hardly think I was attacking the poor FSBO... My point was to have a healthy discussion and that is what that has gone on here.
Nora & Susan -- Thanks!
Steve -- Wow! I am so honored! Thank you!
Bill & Barbara Jo -- They do, but I think they are also getting a lot of bad information from Realtors that are desperate for the business. Realtors that are willing to tell Sellers what they want to hear instead of what they need to hear are part of the problem. Sellers that are stuck in what was are another!
Colleen,
As a mortgage professional I occassionally have a client that is working with a FSBO, the buyer has also shorted the service that a Licensed Professional brings to the table. What happens when there is an issue with the home inspection, or the appraised value is not equal to the sales price. Please do a blog on a how a Realtor benefits the buyer in this market.
Doreen Hargreaves
Fidelity Mortgage Services
Good post, Colleen.
Some sellers don't want to hear that their property is overpriced! They think the cost of resurfing the pool or updating a 30 year old bathroom significantly increases the value of the home! I have contacted FSBO sellers to show the property many times. Some will cobroke with a buyers again and some want nothing to do with an agent! Playing the FSBO game can work but many times, the sellers are just frustrated when they speak to you and don't want to pay to market their home! They don't get that they are paying to market their home....it's just that they are paying themselves in terms of time, advertising, and risk.
Some buyers think that they are getting the deal with a FSBO and that is not always true! I was recently working with a prequalified buyer who was insistant that she could get a house that was worth about $50K more that she was prequalified for! She was not listening. She did a FSBO/Lease Purchase on her own but she will never prequalify for the necessary mortgage! She listed to the owner telling her, "no problem". It will be interesting to see how that plays out in 6 months when it's time to close a loan!