I just came across a great article about how the founder of ForSaleByOwner.com (a US based site similar to duProprio.com here in Quebec) just sold his own condo… by using a real estate broker!!
“FSBOs” are properties that are For Sale by Owner. Every year, hundreds of thousands of properties are listed, not by real estate brokers, but by the owners themselves in an attempt to save the broker’s commission. Sometimes this works out for the seller but more often than not, the seller ends up listing with a broker down the road (less than 26% of homeowners are successful in selling their property without the help of a broker).
Many FSBOs are just owners who have unrealistic expectations of how easy it is to sell a property — just list it on the Internet and the buyers will come, they theorize. That’s why it was a sweet tale for every real estate broker to hear that Colby Sambrotto, one of the founders of Internet listing site ForSaleByOwner.com, ended up hiring a real estate agent to sell his $2.15 million condo with a full 6% commission!
According to the Wall Street Journal, Mr Sambrotto spent six months trying to sell his 2,000-square-foot apartment at The Lion’s Head building near Sixth Avenue in trendy Chelsea through online listings and classified adverts.
The DIY home selling guru eventually decided to turn the sale over to a professional.
Not only did broker Jesse Buckler set the price $150,000 higher than the original asking price, he went on to secure the elusive buyer Mr Sambrotto’s FSBO methods had failed to attract. According to Mr. Buckler, the owner wasn’t asking enough for the apartment and was consequently not attracting the right buyers. Broker Jesse Buckler encouraged Mr. Sambrotto to increase the asking price of the apartment as a sales strategy.
‘At first he wouldn’t let me increase the price,’ said Mr. Buckler. ‘I told him I know what I am doing—the market is picking up.’
At that 7.5% higher price, the condo received multiple offers. So it can be argued that Buckler paid for himself and then some.
Are agents really so magical that hiring one is going to generate an extra 7.5% in sales price? Not always, but a working agent does have a big advantage over an FSBO seller — the owner is selling only one property, but the agent is involved in multiple transactions.
As a result, the agent can often get a better immediate “read” on the market, due to having a broader sample of information.
In fact, nearly a quarter of FSBOs surveyed said that “Getting the right price” was the hardest thing for them to do, even ahead of “having enough time to devote to all aspects of the sale”.
Mr. Sambrotto bought the apartment for $2 million in 2007, a year after he sold his ForSaleByOwner.com website at the height of the real estate boom.
He told the Journal that he still believed in owner sales and discounted commissions, but added: ‘The apartment market in Manhattan was tightly controlled by agents.’
‘So many buyers don’t even bother to do a search online.’
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