The FSBO Blog

For those of you who didn’t see or read the story already, Newsweek’s Jane Bryant Quinn gave some much-needed publicity and credibility to discounted real estate options.

You can read the full text of her July 18th article here: http://www.msnbc.msn.com/id/8525635/site/newsweek/

Michael Poythress

Answer: Send your lawmakers the new AEI-Brookings Joint Center report.

A new policy analysis by the Joint Center starts off with:

“We find that the traditional model for residential real estate brokerage services may be dated, and could be improved substantially with some public policy interventions that spur innovation.

“We believe that there are numerous barriers to entry that are slowing the emergence of new models for serving consumers. Some of these barriers are likely to be anti-competitve. Examples include discrimination against new brokerage models and online brokers who wish to join multiple listing services; state legislation that would require minimum service requirements, effectively preventing “a la carte” offerings; and prohibitions by real estate commissions on providing rebates to customers. In our opinion, none of these practices should be allowed.”

Written by academic analysts from Stanford, MIT, University of Maryland, Harvard, University of Chicago, and others, the report comes to 3 main policy recommendations:

1. Federal and state antitrust authorities should carefully scrutinize efforts to limit competition in the residential real estate brokerage market.
2. State governments should refrain from adopting laws or rules that inhibit competition in real estate brokerage.
3. Congress should allow the Federal Reserve Board and the Treasury Department to permit banks to offer residential real estate brokerage services through separately capitalized affiliates.

I’m not so sure about #3, but the first 2 are right on.

The 24-page report delves deeper than most people would want to get, but if you’re interested you can read the entire report here.

If you, like me, are a concerned consumer, make sure your lawmakers get this report - especially if you live in a state considering new real estate policy. Because…

“We do not know which business models are likely to succeed in the marketplace for residential real estate services in the future. We do believe, however, that judicious public policy interventions could have a marked impact on improving services and lowering costs for home buyers and sellers.”

And we also believe we don’t want the National Association of Realtors (NAR) deciding which models will succeed in the marketplace.

~Robert Creek
The FSBO Blog

FSBO now has it’s very own Podcast! (what’s a Podcast?) Launched earlier this week and headed up by FSBO service pioneer Kevin Wood, FSBOtalk.com has a growing list of downloadable audio programs covering a variety of topics relevant to home buyers and sellers.

Kevin says that FSBOtalk.com will eventually include downloadable seminars and training for the entire FSBO process. His reason for creating the radio-style audio programs was to be on the cutting edge of bringing attention to and providing information for the growing trend of selling by owner. He said “it’s far less boring than reading about it.” I’d like to think The FSBO Blog isn’t boring reading, but still, Kevin has struck a chord with the Podcast - it IS an interesting and very helpful tool. Check it out!

Michael Poythress

This is a rather humorous diversion, but it definitely fits on-topic:

What do you do when you’ve revolutionized everything on earth, and you still have energy left? Google believes other worlds need revolutions, too.

Google Maps > Google Moon (be sure to zoom all the way in!)

~Robert Creek

Much indeed has been said about the dangers of for-sale-by-owner (FSBO) transactions, for both home buyers and home sellers. Toward dispelling the popular myths of the FSBO market, let us get one thing straight: the same resources that are available to Real Estate Agents can be available to home sellers and buyers. The difficulty lies in merely knowing where to locate those resources.

In spite of widespread nay saying, primarily from Real Estate Agents, for-sale-by-owner transactions are increasing in both popularity and practicality. Selling without an agent can save thousands of dollars in commission, while Agents would have us believe that the savings are not worth the risks taken. Let’s not forget the negative press coverage that successful corporations such as eBay got, for putting too much responsibility in the hands of non-professionals. And all the “risk education” we were given turned out to be a bunch of hogwash. EBay is wildly popular, successful, and (surprisingly enough) safe.

Good news: buying or selling your own home has the potential to be just as secure and exhilarating an experience as selling that old autographed Sandy Patti vinyl for 100x what you paid for it. In order to make selling your home as enjoyable and carefree as possible, there are indeed certain resources that should be taken advantage of. But the point is that they are out there, and you can sell your home “by owner” without having to sell by yourself, like many Real Estate experts would have you believe.

This is where FSBO companies come in. In order to provide their customers with the same security offered by Agents, FSBO companies on the whole do an excellent job of directing sellers and buyers to invaluable tools to assist you and your buyer in the process of purchasing your home. Among these resources in many cases, is the provision of the selling price trends in a given neighborhood. In this way, for a fraction of the cost of a Real Estate Agent, buyers can protect both their pocketbooks and their family relations.

katherine ellie
The FSBO Blog

I’m constantly amazed at the number of people who list their home for sale, get a contract, and immediately begin turning away interested buyers. So with this quick note, I would like to advise one single thing sellers can do that can, more often than not, make the difference between you scrambling around in pain at the last second because a contract fell through, or a perfectly smooth sale.

It’s simple: ONCE YOU HAVE A SIGNED CONTRACT, KEEP ACCEPTING BACKUP OFFERS.

Don’t turn away people who are interested in your home, even if you already have a signed contract with another buyer. Bad, unexpected things can happen. Financing can fall through. They can find something they don’t like in an inspection. They can have trouble finding a buyer for their home. These things can happen even to buyers you are very confident in. The sale is not complete until you both make it to the closing table and the transaction is concluded.

The best insurance to protect against a failed sale during the 11th hour is to have backup contracts in your hand, so if your primary buyer drops out of the picture you can go to the next in line.

Sellers in some states are already used to this due to the hot market - in some areas, it’s actually common to have buyers competing/bidding for a home (e.g. most parts of California) with their offers. This practice should be adhered to if you’re selling, no matter where.

There’s nothing complicated to it; just explain to potential buyers who call or e-mail that you’ve already accepted an offer, but that you are willing to accept backup offers if they are interested in the home. If and when you get a backup “Offer to Purchase” from a buyer, simply hold it without signing, and explain to the buyer that you will contact them a) when the primary contract falls through, or b) when the sale successfully concludes - that way the buyers are sitting indefinitely waiting for a home that sold weeks ago.

Accepting more than 1 backup offer/contract is no different. When you have multiple offers, as a seller there is no rule on which must be given precedence - you can choose completely arbitrarily which backup contract(s) to give a higher priority.

So sellers, when you get a call from some interested buyer and you already have a contract, don’t turn them away! It’s for your own good!

Michael Poythress
The FSBO Blog