Most For Sale By Owner Homes Likely To Need Realtor

Mortgage Executive Says Professionals Know Market

Sunday, June 6, 2004 - by Irby Park
Homes marketed by their owners was the topic of discussion at the monthly meeting of the Women's Council of Realtors (WCR). Taking part in the program were, from left, Sharon Smith, WCR vice president; Susan Chastain, secretary; Jack Shelton, with Wells Fargo Home Mortgage, featured speaker; Jean Smith, president- elect, who introduced the speaker; and Nickie Schwartzkopf, president. Click on photo to enlarge.
Homes marketed by their owners was the topic of discussion at the monthly meeting of the Women's Council of Realtors (WCR). Taking part in the program were, from left, Sharon Smith, WCR vice president; Susan Chastain, secretary; Jack Shelton, with Wells Fargo Home Mortgage, featured speaker; Jean Smith, president- elect, who introduced the speaker; and Nickie Schwartzkopf, president. Click on photo to enlarge.
- photo by Irby Park

An estimated 15 to 35 percent of the available inventory of existing single family homes at any given time will be on the market as “for sale by owner” (FSBO) homes but about 80 percent of those will end up listed by Realtors before they are sold, according to Jack Shelton with Wells Fargo Home Mortgage.

Mr. Shelton, speaker at the monthly meeting of the Women’s Council of Realtors (WCR) at the Chattanooga Golf and Country Club, said about 80 percent of the FSBOs will fail to sell over a period of time and the homeowners will turn to Realtors for help.

He said about 83 percent of home sales are by Realtors. Most homeowners who try to sell their own homes usually don’t understand the market, what it takes to sell a house or the multiple legal requirements in a sale. If running an ad and putting a sign in the yard was all that was needed, no one would need a Realtor.

He suggested that Realtors contact FSBOs and offer to help. Generally, he said, the Realtor who first contacts a FSBO is the one the owner turns to when the house doesn’t sell and a Realtor is needed.

Mr. Shelton and his Wells Fargo company was the “super sponsor” for this month’s luncheon.

During the luncheon, Nickie Schwartzkopf, WCR president, presented to Jennifer Grayson, past president, the Chapter Excellence Award for last year received at a recent national meeting.

Addressing the luncheon, Mr. Shelton said, “What you do today has a direct relation on what you will become tomorrow and what you are today is the result of decisions you made yesterday.”

Many people, he said, don’t know what success it. He defined it as “a journey” and said success depends on knowing your purpose and maximizing your potential to fulfill that purpose. The secret is daily setting goals, being disciplined to reach the goals and making a habit of it.

Owners who try to sell their own homes often overprice them. They think because a neighbor got a certain price, they should get the same, but they don’t know what amenities were inside the house, like marble countertop, hardwood floors and may not know that the inside was remodeled to bring it up to date.

FSBOs, he said, are “commission sensative” and “you must justify your job.”

Nationally, he said, the industry is starting to see “fees for services” as “a new wave” in real estate selling. There are also hourly fees and flat fees. For instance, he said, “if you’re asking 7 percent, you need to be able to justify every penny of that.” If you can’t, he added, it gives the homeowner a reason for not hiring a Realtor.

He suggested that Realtors may want to look at changes in the way charges are determined.

Many of the owners who choose to sell their own homes are “do-it-yourselfers” but they likely are uneducated about requirements for selling a home. They may have gone online for information or bought a book, but still don’t know all the legal pitfalls that can kill a sale.

A Realtor may make an arrangement to get some payment if a buyer is found and may offer to hold an open house for the owner or take the owner out to look at other property to get a better idea of the value of the home.

Owners trying to sell their own homes often are not aware of the dangers involved in allowing strangers to come into their homes. He also told of a case of a phone call that resulted in a burglary. The called asked about seeing the house and found that both the husband and wife were working and could not show the house during the daytime. The owners later found the house had been burglarized while they were gone.

There are also cases of owners being robbed or attacked by would-be buyers.

Owners may neglect to research deed restrictions, fail to have a termite inspection or prepare disclosure statements required by law. Failure to meet legal requirements can nullify a sale.

He said an owner trying to sell a house must be available whenever a potential buyer needs to look at the house, needs to be able to get off work and should be able to hold an open house.

The owner should also consider how to handle criticism and faults found by those viewing the house and whether they can be handled without getting upset.

A Realtor asking, for instance, 7 percent commission, must be able to justify the commission. If it can’t be justified, it gives the owner a reason for selling without a Realtor.

He said the main reasons homeowners may try to sell the home themselves is that they don’t trust Realtors, they think they can sell the house themselves and they don’t want to pay the commission.

It is up to the Realtor, he said, to offer them something they didn’t expect and justify the charge for services.

Jennifer Grayson, left, immediate past president of the Women's Council of Realtors, was presented the Chapter Excellence Award for last year by Nickie Schwartzkopf, president. Click on photo to enlarge.
Jennifer Grayson, left, immediate past president of the Women's Council of Realtors, was presented the Chapter Excellence Award for last year by Nickie Schwartzkopf, president. Click on photo to enlarge.
- photo by Irby Park

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