FSBO in Massachusetts

I remember when I first started in real estate. I had seen a home that was For Sale By Owner in Massachusetts, tracked the owner down (who was now in California) and spoke with the wife for a while. We talked about older homes (which theirs was, and which I love), pricing, and marketing strategies, and the wife asked me to forward papers to them so that they could give me the listing.

The next day, the wife called me. She said that her husband had decided that they couldn’t afford to pay an agent and they were going to continue to have their nineteen year old continue to stay in the home and open it for potential buyers. Then she burst into tears and ended the call.

I wish I could say that I called her back. I wish I could say that her story had a happy ending. Short sales were very new and risky at the time. Today they are still a tedious process but they aren’t as iffy as they once were. Today her story might have ended differently.

But what happened then was that I was contacted by the bank that held the mortgage to do a BPO (broker’s price opinion) for the property a short time later, which was later listed by the bank after the foreclosure.

Whenever I see a For Sale By Owner sign I think of this woman and our last conversation. I applaud any homeowners who want to go it alone without the assistance of a Realtor. It can sometimes be done, although in this market and financial climate selling your home by yourself is extremely difficult.

We usually see two reasons that homeowners list their homes on their own. The first is to save money because they do not see the value of the marketing and transactional assistance of a Realtor.

The second is the reason that my distraught homeowner voiced: they felt that they could not afford a Realtor. If there had been any way that they felt that they could have paid me they would have hired me: they saw value in my marketing plan which went well beyond the three P’s (Plant a sign, post it to the MLS, and pray), and they saw value in the fact that if I represented them, their home would be open to buyers when buyers were ready to see it. In a buyer’s market, this is huge. They also knew that if I were to bring them an offer, it would be the offer of a qualified buyer.

This is an interesting note from the Massachusetts Association of Realtors®:

The survey also revealed that 61% of homeowners selling without assistance used yard signs to market their homes while 37% used newspaper ads and 29% used open houses as their principal marketing tools. On the other hand, an overwhelming majority of buyers, 90% nationally and 91% in Massachusetts, relied on real estate agents to buy a home.

This set of statistics more than any others may indicate why about 80% of all homeowners starting out FSBO end up with an agent. That’s where the buyers are.

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