Now that the New Year is underway, a lot of people are wondering what 2008 has in store for the real estate market. Industry experts say it could be a tough year for people who put their home on the market.
With more than 4.2 million homes currently on the market and more to come as spring “selling season” arrives, home prices are falling to entice buyers to get off the sidelines. Buyers, of course, are drawn to houses offering the best deal for the money. With home prices threatening to go lower or, at best, remain unchanged, many home sellers are concerned about selling their home for less than it was worth just a year or two ago. Add to that the fact that real estate agents typically eat up five to six percent of a home’s sales price, and that’s even less money that will go to the seller.
This probably explains why many sellers are choosing to forgo working with an agent and save on commission, allowing them to price their homes more competitively. There are now more people using ForSaleByOwner.com, the nation’s largest Web site for these home sellers, than at any other time in the company’s history.
There’s big money to be saved. An analysis performed by the company found that real estate agents and brokers collected $55 billion in commissions in 2007, an average of $13,900 per home sold. People like Joseph De Luca of Enfield, Conn., question the wisdom of paying so much when, with a little effort, he could do the job himself and save thousands of dollars.
“An agent is going to market the home by putting a yard sign out front, posting an ad on the Internet and holding a few open houses. Why pay a five or six percent commission when I can do that myself,” asks De Luca.
Instead of spending thousands on an agent, he invested $249 to market his three-bedroom home on ForSaleByOwner.com. DeLuca’s listing package included a guidebook to selling your own home, and other resources to walk him through the entire real estate process. He also received a ForSaleByOwner.com yard sign that signaled potential buyers to view his home on the Internet, and a home appraisal report that compared his home to others in the area and gave him market information so that he could price his home accurately.
De Luca noticed that similar homes in his neighborhood were listed at more than $340,000 and hadn’t moved. Figuring that he was saving on commissions, he sold his house for $335,000 within 45 days. Had he gone with a commissioned agent, it would have had to sell for $355,000 in order for him to pocket the same amount. “I’ll never use a real estate agent again,” De Luca proudly says.
Another ForSaleByOwner.com customer, Bruce Brandywine of Tampa, Fla., attracted a buyer who saw his online ForSaleByOwner.com property ad and toured it during an open house that he hosted himself. “Who knows my home and can possibly explain its features and attributes better than myself?” he asked rhetorically. To close the deal and give him piece of mind that nothing was overlooked, he hired a real estate attorney to handle all of the necessary paperwork.
Brandywine is not the only one choosing to skip the “middleman.” ForSaleByOwner.com estimates that ‘for sale by owner’ sellers saved almost $9 billion in home value during 2007.
“The real estate market is expected to be tough for at least the first half of 2008, so we expect more people will avoid using a commissioned agent in order to price their home competitively and save more of their home’s value.” says Eric Mangan, director of consumer relations at ForSaleByOwner.com.
Whether you’re planning to sell in the near future, or are looking to buy, log on to www.ForSaleByOwner.com for the help you need today.