A Rebuttal Against The Widely Publicized Article by Anthony Stokes Pereira Titled “10 Tips for Selling Your Home On Your Own” *
Anthony Stokes Pereira, a Licensed Realtor from Rand Realty, has
written an article about selling your home on your own, FSBO style, but
it contains material that we don’t believe is objective as it could be –
this is our rebuttal of his statements pertaining to selling your home
“For Sale By Owner” and a challenge that the article he wrote is a
self-serving ode to try to save the realtor industry from extinction.
Price Your Home Competitively to the Market: *
Stokes Pereira Says:
You need to make sure that you’re pricing your home according to the
market. Too many sellers (not just those selling on their own) price
their home emotionally, based on what they “need” or according to what
price they purchased the home for. Buyers don’t care about what you need
to get out of your home. They’re going to pay only as much as the
market demands. So you need to look carefully at recent comparable sales
in your area, to see where you should be pricing your home. We have
great resources available on rand-realty web site to help you find
comparable recent sales and allow you to track your local market.
Our Rebuttal:
Because you are not paying the extortionate commission (often about 6%)
that the realtor charges, you can afford to price the property lower
than the comparable – the others sellers are your neighbors who are
using a realtor to sell their home and cannot afford to drop their price
to match yours, because they are giving away 6% of the sale at closing
to the realtor and you are not. If your neighbors want to get into a
discount price war, go ahead and let them – you will always be ahead of
the game by 6% anyway, so they will be on the losing side of the
financial equation.
Keep track of the market: *
Stokes Pereira Says:
Don’t let your home become stale. Your price needs to reflect current
market conditions, which can change over time. If you’re on the market
for a few months, you need to keep track of what’s selling, and what’s
not selling. If you see houses start to sell at prices below yours, it’s
time to reevaluate your pricing strategy.
Our Rebuttal:
We agree with Stokes Pereira
on this one, you should
constantly assess the latest home sales data, although realtors often
try to limit clients ability to see sales data, even though it is
public. Often realtor associations will only allow realtors to see
“public” sales data, which is very frustrating for the homeowner, trying
to do it by themselves. It’s called protectionism in this country and
it stinks of corruption.
Get commitment letters from any buyer presenting an offer: *
Stokes Pereira Says:
One of the great frustrations in selling your home is going through the
process of negotiating an offer with a buyer and maybe even getting into
contract before discovering that your prospective buyer is not
financially qualified to purchase the home. You should not accept any
offer without getting what’s called a “commitment letter” from a
reputable mortgage broker or bank establishing the credibility of your
buyers. Demand such a commitment letter from anyone trying to make you
an offer.
Our Rebuttal:
Commitment letter don’t really happen when you do have a realtor, so why
make the seller who is doing it for themselves jump through these
additional meaningless hoops. Some sellers can wallpaper their house
with useless commitment letters. Let your attorney handle the whole
piece of this, he will work with the buyers attorney to see the
credibility of the offer.
Prepare your home for sale by detailing and staging it: *
Stokes Pereira Says:
If you want your home to stand out, you need to detail and stage it for
showings. Detailing means cleaning the home from top to bottom,
eliminating a lot of the clutter from your closets and cabinets, and
making the rooms look bigger by storing your unnecessary furniture.
Staging is the next step of detailing, where you actually take a
“designer’s eye” to your rooms and try to arrange them for maximum
aesthetic appeal. Spend time making your home look great to prospective
purchasers.
Our Rebuttal:
Savvy buyers are getting very tired of being manipulated at “staged”
homes – they know it’s a scam and savvy buyers will not fall for it.
Perhaps ten years ago it worked, but buyers are much smarter now and
would prefer a home to either be empty, or at the very least
de-cluttered. You see staging happen on the home renovation TV shows all
the time. “Fred and Ginger got an extra $20k because they staged their
home” – but now everyone is wise to it. This reminds me about the story
where new home builders would stage their homes for sale with furniture
that was 30% smaller than normal, to make the rooms look bigger. Those
sort of practices are long gone, buyers are wise to both scams and react
accordingly. They tell the seller to stuff it and find another
property. Appraisal specialists know a dirty little secret. The value of
the home is based on its square footage and the average
cost-per-square-foot in the area. Sure you can tweak a little more for
newer appliances, but the appraisal formula is used so often that it has
become the de-facto standard.
Be ready for showings at any time: *
Stokes Pereira Says:
Once you have your home ready for showings, you need to keep it that
way. The hardest part of selling your home is that you have to keep it
in showing condition at all time. You need to keep the rooms clean, do
the dirty dishes every day, put the garbage out, and all those things
that most of us neglect when we’re living our normal lives. And you need
to make sure you’re available to show the home anytime a buyer wants to
come see it. You never know when your buyer could be coming to visit,
so you have to be prepared every single day.
Our Rebuttal:
This is baloney. This doesn’t happen with realtor listed homes, so why would it happen with FSBO homes.
Don’t scrimp on your marketing: *
Stokes Pereira Says:
Remember that when you’re selling on your own, you need to be your own
marketing professional. That requires making high-quality marketing
materials (flyers, postcards, brochures) for your home, including
high-resolution photos and an expansive and appealing description of
your home’s highlights. You can find online resources for doing all of
that, so it is possible to do it yourself. But don’t scrimp on your
marketing. When you’re selling on your own, you have a limited ability
to reach the public, so it’s particularly important to make a strong
impression when you attract a potential buyer’s attention. And remember
to freshen up your marketing. You should probably do new marketing
materials with new pictures every few months or so.
Our Rebuttal:
Realtors will always tell you about how much money they sink into
marketing and its mostly baloney. Forget all the crappy marketing
materials they produce and just get listed on your local MLS by using a
flat-fee MLS listing company. Print out a 1 sheet spec sheet for a
takeaway for people who come to see the property.
Be careful about your home security: *
Stokes Pereira Says:
When you’re selling your home on your own, you don’t have any buffer
between you and potential visitors. Make sure you hide away your
valuables, and that when people visit you don’t inadvertently reveal
your security codes, the location of hidden keys, or anything else that
might compromise your security. You should also make sure to get
identification for all your visitors, having them sign in when they see
your home.
Our Rebuttal:
This is clearly no different when you use a realtor. Realtors don’t make
very good security guards either, so its contrary – we anticipate that
you actually take better care of your belongings than they do.
Be honest about the property condition: *
Stokes Pereira Says:
Remember that New York State law requires sellers to be honest about the
condition of the property they are selling. If you have well water as
drinking water, for example, you might be required to get the water
tested for buyers. And if you know of problems with the property that
the buyer could not discover upon reasonable inspection (like water that
collects in the basement after rains), you may have an obligation to
tell buyers about that.
Our Rebuttal:
We agree, disclose everything. Your lawyer would advise this regardless of how you are selling your home anyway.
Hire an experienced real estate attorney: *
Stokes Pereira Says:
If you’re going to sell your home on your own, without the assistance
and advice of a real estate professional, you should absolutely make
sure to retain an experienced, local real estate attorney to handle your
sale once you have an acceptable offer. Do not scrimp on a good real
estate attorney by hiring an out of town relative, or your “family”
attorney. Get someone experienced in local real estate law.
Our Rebuttal:
Local real estate attorneys are usually family attorneys, maybe at Rand
Realty there is a lawyer who specializes in Real Estate, but we are not
sure where you could even find such a thing – the Bar Association
doesn’t say there is such a thing either – where in New York is there an
attorney who only does closings?
Consider cooperating with buyer agents: *
Stokes Pereira Says:
Lastly, if you’re going to try to sell on your own, you might still
consider cooperating with buyer agents. Most buyers work with agents, so
if you sell by yourself you’re probably not reaching the largest
possible pool of buyers. Even if you’re not listed on the market,
though, some buyer agents might approach you for a “FSBO Listing
Agreement” in which you will pay a commission if and only if that agent
finds you the buyer for your home. In that case you only have to pay a
commission if a buyer agent procures your buyer, and you get an
acceptable offer from that buyer that is sufficient to pay that agent’s
commission. Not all buyer agents will agree to such an arrangement, but
some will. If they will, it’s a good deal for you, and can help you find
the right buyer.
Our Rebuttal:
OK, if you have to sleep with the enemy, then this would probably be the
time to do it as it adds value to your FSBO process and helps you find
legitimate buyers. But 2% or even 2.5% commission, you are going to feel
like you were stiffed, but it still beats a total commission of 6% by a
long chalk.
The following are 7 statements that Rand Realty made why you should NOT sell your home FSBO with our rebuttals. *
Basic economics says that brokers will get you a higher price: *
If you’re trying to get the best price for an item, you need to
expose it to the largest potential pool of buyers. That large pool of
buyers can then bid against themselves to drive the price up to the
highest level possible. If you list with an MLS broker, you create the
largest possible demand for your home by putting your home into the open
real estate market, with hundreds of brokers and thousands of agents
working to sell your home to an enormous pool of buyers. Basic economic
theory says that the larger the potential buyer market, the higher the
price. But if you don’t take part in that broker-generated market,
you’re not going to get that broker-generated price. You’re the only one
working to sell your home.
Our Rebuttal:
Baloney, get on a flat fee MLS (Multiple Listing Service) and you will get the maximum exposure you deserve.
You don’t get the internet exposure: *
If you’re trying to sell your home in the internet age, you need
maximum internet exposure. When you list your home with a broker like
Better Homes and Gardens Rand Realty, we list your home on our website
which gets thousands of unique users every day. On top of that, we also
list your home cooperatively with all the other real estate broker
websites in the region, including our competitors. So any buyer looking
on any conceivable real estate website is going to find your home. Yes,
you can list on some sites that take FSBO listings, but not on the local
broker websites, which is where most buyers look.
Our Rebuttal:
More baloney. Get on a flat fee MLS broker or agent (Multiple Listing
Service). You will get the maximum internet exposure you deserve. MLS is
where everyone is looking. Even Zillow picks up its data from MLS. The
only internet exposure you do not get is the realtors own website, but
who cares about that? It hardly gets any traffic anyway, anyone that is
looking for a house online is looking at MLS.
Who are your buyers going to be? Bargain-hunters: *
If you’re selling on your own, you’re really marketing to a small
segment of the buyer population that has chosen to work without a
broker. Why would people work without a broker, who will do all the leg
work for them, particularly when most buyers perceive that the seller
pays the broker anyway? The answer is that buyers who work without a
broker are looking for bargains. They’re looking for bargains. They
think that people who sell on their own are likely to be more
negotiable, less likely to price well to the market, and more desperate.
So your buyers tend to be bottom-feeders, looking for the best deal
they can get. That does not put more money in your pocket, it puts money
in their pocket.
Our Rebuttal:
Where is the evidence to support this – sounds like empty rhetoric to us, or even worse “scare” tactics.
The people using MLS service are the very same people the realtor would get for you.
Well, you’re not paying a broker, so: *
Even if your bargain-hunting buyers make an offer, they’re likely to
use your FSBO status against you in low balling you. Most offers will
come with this qualifier: “well, you’re not paying a broker’s fee, so
this offer is almost what you’d get if you sold with a broker.” In other
words, buyers will always deduct the perceive commission from their
offers, justifying it because you’re not paying a broker. So you end up
saving them money, not you.
Our Rebuttal:
Maybe it comes in the negotiation, usually the saving gets split between
the parties and then the negotiation is over, the buyer doesn’t get two
bites at a discount.
Do you really have the time for it? *
What’s your time worth? Selling a home is a big job, and takes a lot
of time. That’s why most people hire professionals to take all the steps
to sell a home: taking pictures, putting up signs, putting in ads,
staging and detailing the home, placing listings in internet sites,
writing descriptions, arranging showings, attending showings, getting
feedback, holding open houses, and keeping track of the market. And
that’s before the entire offer and acceptance stage, which requires even
more work. Yes, you can do that work yourself, but how much is your
time worth? If it takes you 30-40 hours of work to do the agent’s job
for her, in order to try save a few thousand dollars, was it worth it to
you?
Our Rebuttal:
Listing agents are often quite lazy when it comes to actually working
for you, but will be quite vocal when blaming you when things do not
sell. A couple of photos, some quick write up and get it listed on a MLS
flat fee service and you are golden. 30-40 hours of the agent’s time
are usually taken up getting massages and getting laid, maybe 3-4 hours
is all they spend on you. They do, however, have some great contacts;
but things are changing, very much in your favor – welcome to the
internet age.
Our marketing is more powerful than FSBO marketing: *
Our marketing is more powerful than FSBO marketing People who sell on
their own see only the superficial aspects of what an agent does, and
think that they can do those same things. They can put up a sign. They
can put an ad in the paper. Why should they pay an agent thousands of
dollars to do it for them? That’s understandable, if that was in fact
all that an agent did. But our sign is different from a FSBO sign, and
our ad is different from a FSBO ad. When someone calls on our sign or
ad, and finds that the home they called on isn’t right for them, our
agent handling the call transitions them to other comparable homes that
might meet their needs – like yours. If someone calls a FSBO ad or sign,
and the home is not right for them, the seller is not about to
transition them to being interested in other homes. When you’re part of
the broker-generated market, you get the value of that market.
Our Rebuttal:
Baloney, get on a flat fee MLS (Multiple Listing Service) and you will get the maximum exposure you deserve.
You’re not really paying the commission: *
Why do people think that the seller pays the commission? At the
closing table, all the money comes from the buyer, not the seller. Yes,
the seller is the one who actually writes the check for the broker’s
fee, but it’s the buyer who provides that money to the seller. Really,
it’s the buyer who pays the commission, by paying more for the home than
she probably would for a FSBO sold without a broker. Finally, if you
are in a short sale situation, your bank pays the commission. People
think that that if they are underwater on their mortgage, they need to
sell on their own to save as much money as possible. That’s exactly
backwards. In those situations, you absolutely need a professional,
trained real estate agent to handle your sale with the bank. The bank
will pay the commission, not you. And your agent can help make sure that
your bank will take the short sale, helping you through the process.
Our Rebuttal:
This is obfuscation at its very worst,- of course the seller pays the
commission – they get paid less than they would if they didn’t use an
agent. Stokes Pereira should rethink this one. It’s an outright lie.
In Conclusion *
The realtors at Rand Realty are scared of change. But change is all
around us, especially in the in the real estate market. People are
selling their homes on their own and doing very well without realtors.
This is similar to the way Uber Car revolutionized the way taxis work,
how eBay and Craigslist revolutionized the classifieds and how amazon
revolutionized retail. Realtors need to wake up and provide a service
that will be invaluable to buyer and seller, otherwise paying a realtor
will be a thing of the past. Next to change is car sales and how the
sleazebag car salesmen operate. Real estate sales and car sales are the
last bastions of the old world and when it is gone, no one will miss it.
