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Market Changes Favor FSBOs
Drastic paradigm shifts in how the residential real estate market works have been on the way for several years now. The change has really become apparent over the last year. It is easier for people to sell their homes themselves as FSBOs (for sale by owner) as a result. Let’s look at how things used to work and how they work now in regard to the traditional method of using a real estate brokerage firm, and I think you’ll see why.
Real Estate Sales – The Old Way
Not so long ago, most people who wanted to buy a home would go to a real estate broker’s office. They would meet with an agent and tell him or her what sort of home they were looking for. The agent would advise the buyer to get a lender letter (if they didn’t already have one) and give them a short list of lenders. The agent would then do a computer search of the Realtor multiple listing services for them.
After the agent found properties which met the buyer’s criteria, the agent and buyer would develop a list of properties the buyer wanted to see. The agent would print these out and make arrangements for the buyer to see them. They’d get into the agent’s car and go from house to house until the buyer found something he wanted to buy. Then they’d work up a contract offer together. Sometimes this process could be completed in one day (especially if the buyer already had a lender letter in hand). Sometimes it took several days’ sessions.
Real Estate Sales – The New Way
Today most homebuyers do their own computer searches. They may have favorite sites like realtor.com or homes.com, or they may do a generic search engine search to find a site. Some do search engine searches specific to the area where they want to buy, such as “San Diego + California + homes for sale.” Results tend to turn up both sites with Realtors’ listings and sites with FSBO homes.
Today’s buyers tend to call an agent about Realtor listings (often making an appointment to meet at the home) and call owners about FSBO listings. Many buyers are confident enough to look at both. Less experienced buyers may do their own searches and then ask an agent to show them the Realtor listings which interest them. Then, if they feel comfortable with the agent, ask if the agent can show them the FSBO homes as well. Most will. Especially if the buyer is willing to sign a "Buyer Broker” agreement.
There are now (and perhaps always will be) people who prefer to work with an agent in the old way. People who are very busy earning a good living are an example of one group which is apt to want someone else to do “pick and shovel work” for them. Older people who have lived in their homes a long time and want something they can handle with less work are also apt to appreciate full, old fashioned real estate service from agents. Still, larger and larger numbers of people are doing their own initial searches. These searches tend to turn up FSBOs as well as Realtors’ listings. In fact more and more people are actually doing searches specifically designed to seek out FSBO listings.
The New Tilt
I think you can see why this movement toward buyers’ doing their own initial searches on the Internet works in favor of FSBO sellers. The propensity for some buyers to include “FSBO” in their search criteria tilts things even further in favor of owners who are selling their own properties. These seemingly simple changes have completely restructured the way the residential real estate market works. If you’re a FSBO, you can smile all the way to the bank.