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I agree with you that "end users" who want the property to build their personal residence tend to pay more for a lot than a builder which was why earlier in the discussion I suggested contacting an agent to market the property. I've seen many "end users" pay significantly more than a builder would.
Again, there's a difference between merely selling a property and having the most successful sale possible. It's unlikely that a limited marketing plan like yours (merely putting a sign out front) achieved that. It sold which is great but in a hot market like this I've seen one buyer far outpace others in a multiple offer situation and the only way to insure that you've reached that one person who wants your property more than everyone else is widespread and effective marketing. If your goal was merely to sell, then that's great you achieved it. If you wanted the most money possible, I would tend to doubt you achieved that.
I got my asking price (which included a nice profit for me) within a few days with almost no effort on my part, and I didn't have to pay any realtor fee. How much more "successful" could a person want to be? Sure, you can always put a property up for bids, but that entails some risk too. I've seen on several occasions when a seller turned down a perfectly good offer because they were greedy and wanted more. Then, sadly, months later had to settle for considerably less.
I'm not saying that "just a sign" on the property will always be enough, but in my last sale it was. The main point I intended to convey with my previous post was that simply contacting a builder who had previously purchased a lot or two in the area is no guarantee at all of getting top dollar for the property. In fact, it would probably result in just about the opposite... in my opinion.
I got my asking price (which included a nice profit for me) within a few days with almost no effort on my part, and I didn't have to pay any realtor fee. How much more "successful" could a person want to be? Sure, you can always put a property up for bids, but that entails some risk too. I've seen on several occasions when a seller turned down a perfectly good offer because they were greedy and wanted more. Then, sadly, months later had to settle for considerably less.
I'm not saying that "just a sign" on the property will always be enough, but in my last sale it was. The main point I intended to convey with my previous post was that simply contacting a builder who had previously purchased a lot or two in the area is no guarantee at all of getting top dollar for the property. In fact, it would probably result in just about the opposite... in my opinion.
What if listing the property publicly could have netted you $100K more? I've seen plenty of instances where properties have been listed for a fair price and sold much higher than that. Often, you run into a person who HAS TO HAVE IT!!! They're always willing to pay more than what might be considered market value. I just saw a property in town sell for $200K more than the list price and the list price and the list price was pretty much where the last sale price was a few weeks prior to this property being listed. This property sold for 30% more than the last comp because someone HAD TO HAVE IT!!! I have plenty of stories like this too. Also, in a fast moving, appreciating market FSBOs often get the price wrong and dont have a marketing plan in place which gets them enough exposure to give the market the opportunity to correct that. As I said, getting a property sold is not really a measure of success especially in a hot market IMO.
Some people get too focused on avoiding paying an agent and forget that what they should be focusing on is "how much money is going in my pocket?" Instead, they're too focused on how much money is going into their agent's pocket and wondering why it's not going into their own pocket when in fact paying them their fee can result in the seller walking away with more. Being able to give agents the double freedom rockets by selling yourself is also not an indicator of success.
A seller turning down a perfectly good offer and then selling for less months later definitely happens. Some people are just too greedy to be helped by anyone. Although, some agents are not good about setting expectations up front and that can be key.
Agree with you about just contacting one potential buyer about your property. If you're going to sell, why not give everyone a crack at buying it? At the end of the day, you'll get a better price than if you just offer it to one or two people. I have some clients who will not allow me to put their property in the MLS and in those cases I'm hitting the phone and email hard to get the word out. However, I'm bound to miss some interested parties using that method and it can cost my client some money in the sale price but I let them know that up front. Sometimes maximum sale price is not a client's #1 goal.
What if listing the property publicly could have netted you $100K more? I've seen plenty of instances where properties have been listed for a fair price and sold much higher than that. Often, you run into a person who HAS TO HAVE IT!!! They're always willing to pay more than what might be considered market value. I just saw a property in town sell for $200K more than the list price and the list price and the list price was pretty much where the last sale price was a few weeks prior to this property being listed. This property sold for 30% more than the last comp because someone HAD TO HAVE IT!!! I have plenty of stories like this too. Also, in a fast moving, appreciating market FSBOs often get the price wrong and dont have a marketing plan in place which gets them enough exposure to give the market the opportunity to correct that. As I said, getting a property sold is not really a measure of success especially in a hot market IMO.
Some people get too focused on avoiding paying an agent and forget that what they should be focusing on is "how much money is going in my pocket?" Instead, they're too focused on how much money is going into their agent's pocket and wondering why it's not going into their own pocket when in fact paying them their fee can result in the seller walking away with more. Being able to give agents the double freedom rockets by selling yourself is also not an indicator of success.
A seller turning down a perfectly good offer and then selling for less months later definitely happens. Some people are just too greedy to be helped by anyone. Although, some agents are not good about setting expectations up front and that can be key.
Agree with you about just contacting one potential buyer about your property. If you're going to sell, why not give everyone a crack at buying it? At the end of the day, you'll get a better price than if you just offer it to one or two people. I have some clients who will not allow me to put their property in the MLS and in those cases I'm hitting the phone and email hard to get the word out. However, I'm bound to miss some interested parties using that method and it can cost my client some money in the sale price but I let them know that up front. Sometimes maximum sale price is not a client's #1 goal.
I agree with most of what you're saying. However, we could play the "What if..." game forever. What if someone offered you triple what your asking price is? Maybe someone else is out there who will pay four times your asking price!!!!! When do we say "enough is enough"?
My point is that eventually, the seller has to make a decision. There is no way of EVER knowing if the offer you have is the highest offer that someone will pay. There's always a chance that there might be someone out there who will pay even more. This has to be balanced against the possibility that if you turn down the current offer, you may end up regretting it later. A good rock solid offer in hand is often worth two "what if" offers in the bushes.
As for listing the property with a realtor, sometimes that's a good idea and sometimes not. There are other ways of getting the word out to prospective buyers that cost little or nothing and don't require a contract. Each property has to be evaluated on an individual basis. And likewise, each seller has to assess whether he has the knowledge, patience, and temperament to handle a FSBO successfully. IMO, there is no one answer that is always the right answer. It always depends on the circumstances.
I got my asking price (which included a nice profit for me) within a few days with almost no effort on my part, and I didn't have to pay any realtor fee. How much more "successful" could a person want to be? Sure, you can always put a property up for bids, but that entails some risk too. I've seen on several occasions when a seller turned down a perfectly good offer because they were greedy and wanted more. Then, sadly, months later had to settle for considerably less.
I'm not saying that "just a sign" on the property will always be enough, but in my last sale it was. The main point I intended to convey with my previous post was that simply contacting a builder who had previously purchased a lot or two in the area is no guarantee at all of getting top dollar for the property. In fact, it would probably result in just about the opposite... in my opinion.
Getting “your asking price” is not the same as getting the highest price. If you sold for “your asking price” in a few days, you definitely left money on the table. Probably significant money. If your definition of success is selling without proper marketing, you achieved your defined goal. Most people want the highest price, not some number they mostly pulled from a cursory look at what sold recently without any detailed analysis of the internals of those sales.
Our previous house was in a hot, tear down neighborhood. We sold it four years ago as a FSBO for lot value plus sq footage comps. It has since sold two more times with each owner selling as a FSBO. In all cases, it was just a matter of posting on NextDoor/and or Zillow and dealing one on one with prospective buyers. No realtors were ever involved. It might be said we left money on the table by not hiring a realtor but the commission probably would have eaten that up.
Seems like a sure way to get no buyers. We tried FSBO and offered 3% to an agent if s/he brought us a buyer. None did. Our house was priced reasonably as compared to similar properties in the area. It was also in a desirable area. It was up on zillow and comparable sites.
So we tried a flat-rate agent who would add it to the MLS, but little else. Had a few showings, no takers.
We finally decided to go with a local realtor with a well-known realty company. We already had it staged well, had good photos and a matterport, but the new realtor is taking the effort to modify the staging a little, take new photos, with a twilight shot and a drone shot and a new matterport. We HATE paying 3%+3% to sell the place, since for this fairly high-priced home, that amounts to a reasonably good yearly income for honestly not that much effort, but if that's what it takes.....
Like anything else it’s all relative.
Personally I would at least negotiate the commission if I was using a agent . Nothing is written in stone a d right now with such low inventory I bet you’ll find agents who will do the work for 4%. C side rig the hoise prices are at all times they aren’t losing any money. 4% is better than 0%
And plenty of places sell FSBO. If the buyer is savvy a d u derstands the process having their closing costs paid for by the seller is a nice bonus. The seller doesn’t have to pay the closing costs or even help with closing costs.
I agree with most of what you're saying. However, we could play the "What if..." game forever. What if someone offered you triple what your asking price is? Maybe someone else is out there who will pay four times your asking price!!!!! When do we say "enough is enough"?
My point is that eventually, the seller has to make a decision. There is no way of EVER knowing if the offer you have is the highest offer that someone will pay. There's always a chance that there might be someone out there who will pay even more. This has to be balanced against the possibility that if you turn down the current offer, you may end up regretting it later. A good rock solid offer in hand is often worth two "what if" offers in the bushes.
As for listing the property with a realtor, sometimes that's a good idea and sometimes not. There are other ways of getting the word out to prospective buyers that cost little or nothing and don't require a contract. Each property has to be evaluated on an individual basis. And likewise, each seller has to assess whether he has the knowledge, patience, and temperament to handle a FSBO successfully. IMO, there is no one answer that is always the right answer. It always depends on the circumstances.
Aha! But all the "what if's" that you left behind are my point. Sure, you can always ask "what if there's someone out there who would have paid more?" However, the question has a lot more gravity to it when the most effort you've made to find that person is to stick a sign in the ground. When you've truly made the effort to reach that one person that's a much weaker question with a much lower likelihood that you've missed that one person.
When is enough enough? Well, that's always up to the seller and you seem happy so I'm happy for you and I've had a couple of clients in the past like you who at a certain point felt the money was "enough" and "let's just take it." However, just because you define your sale as a "success" does not mean others would judge it by the same metric. The goal 99% of my clients put before me is to assist them in the sale of their house at the highest sale price possible in the shortest amount of time needed to achieve that price. Most of my clients do not share the bar you set for yourself of merely achieving your chosen listing price and would not agree that your sale was successful.
Again, you achieved what you feel was a successful sale and that's great. My point is merely that most others typically set the bar higher and you likely did not reach that bar.
Quote:
Originally Posted by Marc Paolella
Getting “your asking price” is not the same as getting the highest price. If you sold for “your asking price” in a few days, you definitely left money on the table. Probably significant money. If your definition of success is selling without proper marketing, you achieved your defined goal. Most people want the highest price, not some number they mostly pulled from a cursory look at what sold recently without any detailed analysis of the internals of those sales.
It's hard to make the blanket statement that if you sold in a couple of days then you left money on the table. Most of the homes in my market sell in a couple of days because the market is HOT right now. Are all of these hundreds of sellers missing out on a higher sale price when they're getting 10, 20, or 30 offers that are 10's and sometimes 100's of thousands above their asking price?
I think the level of marketing they did is a much stronger indicator that they left money on the table. My clients pay me to achieve a minimal market time. They don't want to be on the market for 60 days if they could achieve the same price in 6 days.
Quote:
Originally Posted by Electrician4you
Like anything else it’s all relative.
Personally I would at least negotiate the commission if I was using a agent . Nothing is written in stone a d right now with such low inventory I bet you’ll find agents who will do the work for 4%. C side rig the hoise prices are at all times they aren’t losing any money. 4% is better than 0%
And plenty of places sell FSBO. If the buyer is savvy a d u derstands the process having their closing costs paid for by the seller is a nice bonus. The seller doesn’t have to pay the closing costs or even help with closing costs.
Just keep in mind who you're likely hiring in that scenario where you're trying to slash the agent's pay. A successful agent who has clients blowing up his phone is not going to accept your listing at a cut rate commission. They're going to move on to the next client that's willing to pay the commission they're asking for. So, you end up getting someone who's not successful, likely not very skilled, and basically desperate to make a buck. I wouldn't encourage anyone to hire an agent desperate to make a buck. These are the guys who often will put their own interests ahead of yours.
Simply creating a sale does not indicate that you have been as successful as possible. This is the mistake most FSBO's make when thinking about whether they have been successful or not. To have the highest degree of success, one must sell for the most money possible in the shortest amount of time needed to achieve that price. Simply, throwing your house up on Facebook and saying "anyone want it?" is not going to accomplish this.
This being said, I have had clients who's goal was not necessarily to achieve the highest sale price possible in the shortest amount of time needed to achieve it. Their idea of "success" was something else, but those people typically are in the minority. There were a little bit more of those folks this year as some people wanted to move but didn't want the whole world traipsing through their house.
I agree with you that "end users" who want the property to build their personal residence tend to pay more for a lot than a builder which was why earlier in the discussion I suggested contacting an agent to market the property. I've seen many "end users" pay significantly more than a builder would.
Again, there's a difference between merely selling a property and having the most successful sale possible. It's unlikely that a limited marketing plan like yours (merely putting a sign out front) achieved that. It sold which is great but in a hot market like this I've seen one buyer far outpace others in a multiple offer situation and the only way to insure that you've reached that one person who wants your property more than everyone else is widespread and effective marketing. If your goal was merely to sell, then that's great you achieved it. If you wanted the most money possible, I would tend to doubt you achieved that.
It might as well be a vacant lot. The house is just going in the dumpster. The nice plus is that the utilities are already on the property. You don't get that with every truly vacant lot.
The most important factor is what you net, not what you gross.
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