Friday, June 8, 2007

In Response to channel 5's local story: Internet Spawns Boom In Homes For Sale By Owner
(CBS 5) SAN FRANCISCO One look on Craigslist, and you can see dozens of Bay Area homes for sale by owners. The practice used to carry stigma, but these days, with the market slowing down, sellers don't want to see any of their home's value lost in fees.
I am all for friendly competition, but there is a side of the story that has not been told amidst the onslaught of reports pertaining to saving the expense of commission. There are huge profits to be gained through the use of an expert. In an area of older housing stock, nearly each listing we take goes through its own "mini-flip" prior to coming on the market. This is much more extensive than just a bit of staging. We do full color consultations, organize a multitude of contractors and on occasion even move walls. And we do this with the expertise and know-how only gained through years of looking at houses through buyers' eyes. No one is better equipped to help you spend your pre-market prep dollars better than an experienced, active realtor. I have seen this create monumental gains for sellers. Much like the benefits obtained by traditional property flippers, our sellers see wonderful returns on these concentrated efforts (expertly designed to spend only the dollars that make the greatest impact.) I should add the obvious here: Even though we spearhead this effort, we do not take any of this windfall other than the agreed commission. Our efforts are designed to create greater opportunities for our sellers.

There is also a theory out there that Realtors paychecks have gone up exponentially throughout the housing boom. This may be true in some cases. However, good agents have added value and additional services to their repertoire. In addition, the Internet has made a techno-savvy realtor's job exceedingly more expensive and time-consuming (a myriad of sites to optimize, property websites to build, web locations to create a presence, email lists to maintain....)

The homeowner in the interview also stated that it doesn’t make sense to him to price something low and hope that it gets bid up. "Starting to price the home with $100,000 less than what other homes have gone for doesn't make any sense," he said. One final truth from the streets: Things are worth more when someone else wants them. This is never truer than in the current real estate market. If listed at the high price (where some of the homes do ultimately sell), we would likely see many more homes languishing on the market. In truth, there is often little more to justify an aggressive sold price other than “it had a lot of competition.” Absent competition the home's value may in fact be $100,000 less. Only an experienced agent can advise you on how best to cultivate competition.

Buyer Tip:
Keeping an eye out for "for sale by owner" (FSBO) listings on Craigslist and through other sources is never a bad idea. Your agents commission can still be part of your offer (most FSBOs recognize this as necessary and may already offer a buyer agent a commission in the MLS) and their talents will serve you well. Your agent will help you navigate the process, negotiate items discovered during the inspection process and keep the unguided seller on track throughout the escrow.

Note: Although Berkeley Hills Realty maintains a large list of resources and service providers, the Agents are not licensed as general contractors. Your project may require the services of a general contractor in addition to the valuable advice provided by your Realtor.

1 comment:

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