Aazami on Homes
For Sale by Owners: Are They an Asset or an Expense?

By Frank Aazami

The housing market has been strong, especially in the Phoenix metropolitan area, and some sellers are thinking, “I don’t need a professional Realtor®; I can pocket the commission for a down payment on a new car. The house will practically sell on its own. No problem.”

For sure, the demand for resale homes has increased nationwide since the advent of COVID-19. Those who are looking to invest, for instance, have seen the rent roll from single-family homes increase 40–50 percent during the year as inventory has shrunk and seller activity expanded.

And here at Russ Lyon | Sotheby’s International Realty in Scottsdale, luxury home inventory has decreased 61 percent during the past year, while homes priced $3 million or more have spiked 140 percent in market value and jumped 18 percent in median sales price according to ARMLS for Maricopa County as of February 2021. 

Those properties that include spaces making them even more attractive during the pandemic have become particularly valuable. These homes have, for instance, two or more split offices with Zoom walls, inspiring mountain or garden views and sound protection from outside noises and inside distractions such as your children playing a loud hide and seek.

Home gyms are most popular, lap pools are high in demand as are tiki bars; indoor/outdoor disappearing glass sliders are appealing, and private court yards and larger balconies are now necessary luxuries.

Still, slapping up a For-Sale-By-Owners (FSBO) sign isn’t going to ensure your home attracts your price. Homes don’t sell themselves; they get sold by knowledgeable, experienced and seasoned sales experts. We’ve seen it at Russ Lyon | Sotheby’s for years. Self-representation is typically much riskier and often costlier than you’d think; ask folks who chose that path and regretted it.

It Takes a Marketer to Market Right

For one, FSBOs often fail because they have limited marketing power behind them, such as Zillow and that buyer-magnet sign on the front yard. Even if you have great imagery, your design and visual appeal may not be sophisticated. Remember: Your home is competing against all other homes whose owners believe theirs is just as good as or better than yours.

The selling process must be artfully choreographed, and that requires patience, effort and experience. A qualified agent builds interest and momentum and systematically follows up with serious buyers. Homes sell themselves? Salesmanship takes time and commitment.

And when you’re staging the home for showings, basic strategies aren’t enough, such as disburdening it of excessive memorabilia, knickknacks and other items that suggest it’s a home you really don’t want to sell.  It takes an expert to plan a winning sell.

Everything must be in check, ready for the Architectural Digest photo-shoot. Are you prepared to activate all four major senses of your buyers? The home must smell, look and sound well, and, yes, touch well, too. Invite your buyers to feel those special textured upgrades. Or smell the jasmine in the garden or the citrus trees in spring bloom.

Sure, use popular Zoom or FaceTime, but these virtual tools should be handled adeptly to create meaningful experiences, not over-hyped sideshows. The person behind the software should know enough about the best features and benefits of the home in order to portray it accurately. Often that’s not you, the owner; like a parent to his/her child, you’re just too close to the product. As seasoned experts, we involve architects and interior designers to help us navigate that process.

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What FSBOs Often Do and Seasoned Agents Don’t

A common mistake is that FSBOs are often overpriced because owners think they have the best wheel. As a result, properties offered above their trading range, that is, out of line with market value, actually help other properties to sell before yours. Again, unless you hold the keys to the Taj Mahal, the Hearst Castle or Monticello, comparable properties are waiting in your area, and smart buyers know this.

Another is that FSBO sellers often place a value on features that buyers are not willing to pay premium for, inflating the home’s value. For example, you have a swanky waterproof sports court, but your potential buyers don’t play basketball or badminton, and they actually mentioned it might handily convert to a kale, cabbage and rutabaga garden.

A knowing real estate professional will be conversant about the competing inventory and can accurately recommend a listing price that will be perceived as “the next best buy in its class.”

Thousands of agents who are actively working with willing and able buyers will miss a property that has not been properly exposed, often an FSBO. Because of this poor exposure, or not knowing the right keywords to attract buyers, a very fine house may not sell until these marketing adjustments are made. And by then your high-buyer is gone or a seller’s market may have shifted to the buyer’s side.

Those who self-sell their homes might overlook other vital information. And, FSBOs are often hampered because the owners are busy with their careers, the children or other duties. But in this digital world, delays can cause a loss of sale. Buyers just move on to the homes they can access quickly and where they feel the welcoming karma.

FSBOs make numerous errors avoided by reputable agents. For example, as mentioned, they often don’t have dependable showing and follow-up systems. Their initial attitudes, “We don’t have to sell” or “The home will sell itself,” will generally harm them. These owners can also ignore safety issues when allowing unvetted strangers through their doorways, an especially dangerous scenario during a pandemic. And, they’re often too busy overselling at first hello, often denying the buyer the chance to take it all in on his/her own.

When do buyers pay premium? This happens when they value the best features in the house and can envision themselves living in the space, not you. Finding this fit takes talent, practice and experience. The right agent asks the right questions at the right time; again, the owner is often not the person for this job. An experienced agent will listen well, vet sincerely, and ascertain the financial ability and motivation of a buyer.

Often, too, FSBOs lose potentially good prospects. A seasoned real estate professional converts a low offer into an equitable transaction and can turn buyers’ questions or objections into closings.

Selling By Yourself: Are You Really Buying a Pandora’s Box?

Experienced Realtors know how to craft a solid contract, they know negotiation terms, contract conditions, clear title policy conditions, financing, appraisal(s) and inspections. They also know that HOA and inspection repairs can often open up litigation and closing delays. When you fund expeditiously and accurately without dispute: That’s beyond valuable.

Self-representation has risks and cost. These sellers typically leave money on the table and miss negotiating terms that may hurt them.

Most sellers regret going through self-representation partly as it exposes a greater number of liabilities. And, a smart broker/agent will avoid taking on the additional liability of stepping into an unrepresented seller’s situation. Agents who advise without representation rights can put themselves in a precarious professional position.

Self-represented sellers often don’t close the transaction on time. And, if the home is empty, the carrying cost can accumulate, and the home often ends up selling at a greater loss of market value.

The best home sign to heed? The one sending you to a qualified broker.