My FSBO experience so far...

[dwford]

Before I bought my flip, I investigated how to sell it. At the time, I assumed I would use my realtor, but very quickly I figured out that this flip didn't have enought money in it to pay a realtor. So I looked into FSBO.

I decided to list the property on Forsalebyowner.com the 1st week I began renovating, with the idea that a potential buyer could make me an offer during renovations, and then have a say in the final product. I got this idea from Richard Davis from Flip This House on A&E, who says the marketing needs to start before the work is complete. I listed all the improvements I intended to do, and an estimated time frame. i got a couple of inquiries, but none repsonded to my follow up emails.

As the project progressed, I updated the info in the ad, and started putting photos. I also created an ad for Craigslist. Again, I got a couple emails but no followup.

Recently, as I have posted pics of the completed house here, I have posted them on my ads as well. I have shown the house to 1 couple so far. I had a brainstorm yesterday that I should email all the people who have inquired so far to:

#1 let them know the house is finished and available, and

#2 to let them know (just by seeing the cc on the email) that other people have shown interest - the idea being if they are actually interested they might have a renewed sense of urgency knowning they are not alone. I informed them of the open house this weekend and offered them the chance to schedule a showing prior to the open house. I sent the email out this morning, and have gotten 2 responses, 1 to make an appointment for tomorrow and another to let me know they are coming to my open house on Saturday. Genius!!!

I also got another inquiry this evening, and will get that showing scheduled hopefully tonight. And just for fun, my appraisal is scheduled for tomorrow. I have 7 "suggested" comps for the appraiser to consider, all 3 bed 2 bath 1200 sq ft in my town that sold for more than my asking price this summer.

So far the FSBO experience has been a positive one.:thumbup:

[dwford]

By the way, if you want to check out my ad, it is on Forsalebyowner.com, ad #20686975..

[Debbie]

Man, why didn't we get that bright idea like yours?

For someone who is a novice, you seem to get all the luck! :praise:

We've attempted to do FSBO on couple of our properties and it seems as if every realtors are driving potential buyers away from FSBOs. It seems inevitable that we'd be stuck with realtors....

Next time, with our primary house to sell (when our new house is built), we are going to try it your way!

[Debbie]

I just now checked your advertisement.

Sooooo, three bedrooms/two baths along with this statement of "Prior owners raised 8 children in this house, plenty of room for your family!"

No wonder you're getting responses! You're a sneaky, sneaky guy!!!! :thumbsup:

[dwford]

It is hard not to get excited when people express an interest in your handiwork, but I am trying not to . Right now all my ideas are just that - unless they work!

I will feel much more confident when I have an offer in hand.

Last night I put my house in the Thurs/Sun real estate sections of the Hartford Courant. In CT people live for the ads in the paper, so I should get some bites.

...And I bought a shower curtain to minimize the yellow bathroom...

My house with a little landscaping out front:

[Debbie]

I can see it is well watered....flowers/plants live for it!

Got a suggestion for you----
Since the plants are not yet established, make sure they get watered on a daily basis for about a week. Then every other day for about a week. Then about an inch or so per week. Unless there's certain plants that requires less water. Did you save the plants' labels with instructions? If so, make sure you read it otherwise you'll find yourself replacing plants.

[dwford]

Trust me, they're well watered - its rained every day since we planted them!! Or are you commenting on my pond below the front step? Still working on the drainage issue.

Had my 2nd showing tonight, 1st time homebuyers who saw my ad on craigslist. Seemed interested. Got another showing tomorrow at 10am.

The house looks great, I am running out of things to do inside. I will be forced to work outdoors tomorrow.:SM145:

[dwford]

Had my 1st Open House today - NOBODY CAME......

I had it advertised in the most circulated paper in the state with a photo. I had my signs up, I even had fresh baked chocolate chip cookies! My sister and I had fun playing Gin for 4 hours!:sleep:

On a better note, I am asking $217,900 and I got my appraisal back today - $228,000, so if anything I have underpriced it.

Hopefully I will have better luck tomorrow.

[Debbie]

Had my 1st Open House today - NOBODY CAME......

I know exactly why nobody came----it's Labor Day weekend. :SM108:

[dwford]

I was expecting a low turnout due to the holiday, but i figured since it is raining all weekend, people may have cancelled some of their plans. One of the couples I showed the house to earlier in the week came because they were going to be out of town this weekend.

Today i will be there by myself, so I guess I will be playing Solitaire :SM069:

[InvestorJoe]

Man, why didn't we get that bright idea like yours?

For someone who is a novice, you seem to get all the luck! :praise:

We've attempted to do FSBO on couple of our properties and it seems as if every realtors are driving potential buyers away from FSBOs. It seems inevitable that we'd be stuck with realtors....

Next time, with our primary house to sell (when our new house is built), we are going to try it your way!
I never list with an agent but I do protect agents who bring me a buyer.

But, beware, because some will claim that a commission can only be paid if it was listed with a broker. Total BS but then they aren't always the most honest lot.

[dwford]

Today I had 4 prospects tour the house, bringing my total to 7 in the last week. Everyone seems to like what I have done, a couple were concerned about the size of the yard. I feel much more comfortable about my flip, knowing that it appraised so well. It is a pretty nice feeling to go from $17k in equity to $75k overnight. I plan to hold firm on the price now.

Reading Dan's e-book (all morning while waiting for anyone to come in), though, I plan to investigate refinancing/ HE loan to get the equity out and renting it out instead. I don't know if I could rent it for enough to cover the higher mortgage payment, however. At the very least I can get rid of PMI now.

Next weekend I plan to try a more local paper, and will shorten my hours.

[dwford]

My advertising has generated a lot of calls/mail from RE agents, all looking for my business. Most I have brushed off/thrown out because they come at you with the premise that you will get tired and frustrated trying FSBO and run to an agent for help.

The one today was different. She called and asked how it was going, told me I was in a great neighborhood and that my price was great - giving me an example of a recent sale she had nearby at a higher price/poorer quality. She asked whether I would entertain offers brought to me by an agent. When I asked about the commission, she suggested that sometimes in that situation, the commission is paid by the buyer by adding it to the selling price, and then given back as a credit at closing. Does this happen? I have no problem compensating an agent that brings me a buyer, but why should I pay another agent and 2 brokers also?

[SlumLordMike]

dw, you sure have your thinker doing its job. Now, since that you have done a good job talking to the respectful realtor, start planning your next talk. Make sure she knows that the door is always open to negotiation, to include the possibility of a 3-day listing if she has a buyer that refuses to compensate her. 2.5 to 3.5% is more than fair, but try hard to get the buyer to comp their buyer's agent;) I'm not a realtor , but I keep one on staff, and I can tell you it is a very good thing to be friends with an experienced teacher. Just pick a good one.

[dwford]

Considering I am selling at $10k below appraised value, I am sure I could work something out with the buyer, but I have no plans to hire an agent to sell the house for me. I think I will put it out there to all the agents who call me that I will work with the buyer to get the agent paid, maybe we could split the commission expense.

[oreinvestments]

Has the property sold? Thank god for craigslist its amazing site. Few ideas

1. Where is that water coming from by the stairs i do not see gutters if there are not any little you can do besides pouring higher section of walk. The others on the sides can be structured diff. Go to Home depot get PvC pipe connect elbow to them under ground dig out away from home maybe into lawn and at the end run another elbow with pop up drain just below grass line. These look better and keep water away from house. I know its probably rained for like 5 days in that picture but this is something to do no matter what the weather. If gutters by porch repeat the same.

It cost 30 dollars to do one so you can do 2 its not hard youll figure it out if you decide to do it. Good curb appeal by the way.

2. For selling are you offering and incentives like no down payment, or pay closing costs, or even lease option in your ads. You may not want to do all of them but if you can do one then youll get so many more buyers. We run ads on craigslist all the time and we always get multiple hits people who want to buy but do not think they can. Then we take control get them financing that they though they never could and bam i have made myself a buyer. We also go to the real estate needed section or apartment/home for rent and post and reply the message: why rent when you can buy. Explain simply how, and again youll get even more buyers. Store these people up ask them exaclty what they are looking for so when you do another one you may have buyer ready. Ask them what they need to make their purchase easier too, thats the key!!!

Great job looks nice, going to your ad now. Night

[oreinvestments]

Didnt see the other posts, was going to mention that you can say that you will give 3% bonus or commision to buyer agent who brings you a buyer. Do what the realtor mentioned add it to the price and you will basically walk away with a wash. That may be your best bet having an agent bring you a buyer. Keep it up it will sell unless it already has.

[dwford]

I am having my 3rd Open House this weekend. So far I have had about 12 different people tour the house in 2 weeks, with 2 making return visits with family.

No offers yet. I am advertising on Craigslist, Forsalebyowner.com, and in 2 newspapers.In my latest ads, I added the line "Agents Welcome." My plan is to continue showing the house through the end of the month, then either list with an agent or rent it out.

If I rent it, I should be able to refi and get my money out so I can move on. I keep reminding my self that it has only been 2 weeks since I started advertising.

[Debbie]

I am having my 3rd Open House this weekend. So far I have had about 12 different people tour the house in 2 weeks, with 2 making return visits with family.

No offers yet. I am advertising on Craigslist, Forsalebyowner.com, and in 2 newspapers.In my latest ads, I added the line "Agents Welcome." My plan is to continue showing the house through the end of the month, then either list with an agent or rent it out.

If I rent it, I should be able to refi and get my money out so I can move on. I keep reminding my self that it has only been 2 weeks since I started advertising.

Keep in mind that we had one lady who came by 6 times. Last time she brought her agent after an appointment with us to make an offer. She didn't make an offer because of her agent.

[SlumLordMike]

Deb, call that lady and ask her what turned her off. It might be something you can fix, but my guess is the agent wanted to sell her one of her full commission listings.

[Debbie]

Deb, call that lady and ask her what turned her off. It might be something you can fix, but my guess is the agent wanted to sell her one of her full commission listings.

Mike, we didn't have to call the potential buyer. You see, I'm a pretty darn good lip reader when I need to be. I read their lips from across a couple of rooms (clear view) while they thought I was a smiling numbnut....

The agent was making a big deal about the truss lift that had been fixed ages ago (before we bought the place). Jeff tried to smooth out the rough edges and the patching didn't quite match the popcorn ceiling. Hence the agent saw the slight mismatch and made a BIG deal to the potential buyer.

Plus, the agent flat out refused to see the AmeriSpec (home inspection) reports that included the truss lift. Nevermind that the truss lift had not been a problem and will not be a problem. She was pretty aggressive about that as well as "gently" persuaded the buyer from looking at the reports.

Of course, I also read the agents lips that there also a very nice side by side duplex that is only $7K more than our duplex. Off they went waving bye-bye and that they'll give us a call......Yeah, right! :SM108:

All that happened during FSBO. Now that we've signed up with RE/MAX almost a month, the lady's agent called us just last night at 9:30pm asking if we would sell to them for 8K less plus not sharing commission with our agent.....Yeah, right!

[gofsbo]

We publish a for sale by owner magazine in Western Massachusetts and have helped many investors market their properties. We started the magazine here because we knew the area was ripe for a change. Classifieds aren't appealing to buyers. Websites alone have their problems as most are affiliated with companies that try to use sellers and or buyers for their purposes, keeping lots of junk online. We have been here for over five years, starting out in a strong seller's market, now entering a buyer's market. What we've found is that sellers who learn to price properly (we recommend an appaiser, not agent CMA), who have a realistic expection of selling time, who understand that buyers are more likely to buy regionally and who learn how to work with real estate agents to their advantage, have the best success.

We recently sold a property in my husband's family using our magazine (Picket Fence Preview) and website, http://www.ma4salebyowner.com as the sole source of marketing. We received over 35 phone calls during the first 2 weeks, had nine showings and accepted an offer mid-August. We continued to advertise it in the September issue as we closed Sept. 8th. I'm still getting calls even though the website lists it as "pending". What has been interesting is to hear the agent calls when they don't know that I own Picket Fence Preview. Quotes like, "I have several buyers looking in your price point. I'd like to come do a walk through." and "I have sold many houses in your area, la de dah." We had several emails through our system, some from agents all touting the fact that they'd seen the property through Picket Fence Preview. That just confirmed what we already knew. The impact of a successful for sale by owner magazine is certainly being felt in the agent market.

For anyone reading this in other parts of the country, try picking up a regional for sale by owner magazine and looking at what they have to offer. A good link is http://www.fsbonetwork.com, an organization of over 35 regional FSBO magazine publishers throughout the US.

Should anyone have questions that we might be able to answer, we'd be happy to share our experiences.

[Dan Auito]

I've seen your magazine for some time. I'm thinking your potential FIZBO's would find my tutorial helpful, no? http://www.magicbullets.com/gifts/final%20cows%20from%20kendall-1-s.pdf

[gofsbo]

I checked out your tutorial this morning. Lots of interesting information. Check your links as some are now outdated. I noticed that when you discussed advertising you made no mention of the many regional for sale by owner services throughout the country who provide print publications (magazines). If sellers live in an area where a magazine is available they should certainly check out the services provided by the publisher. Many times publishers maintain walk-in storefronts and are most able to provide state specific information, disclosures, forms, etc. As buyers tend to purchase locally, within a given region, this form of marketing targets buyers where they're looking, providing them with adequate information and pictures. Every magazine is now accompanied by a website and almost all of them offer virtual tours, post open houses, etc. A regional publisher knows the local market and can provide information that national websites cannot.

Most of the FSBO website links that you have provided in your tutorial may offer free listings, but how do buyers find them? Most of these websites fall very low in search engines. It's one thing to use a website in local classified ads, but you shouldn't have to place classifieds if you have the use of a regional FSBO magazine. Less than 53% of buyers look in classifieds anymore. If sellers fall into the trap of using free services and think that they will be successful, all the careful preparation, appraisals, inspections, etc. will be for naught if no one knocks on the door. Our website, www.MA4salebyowner.com is easily searched on Google and other major search engines. Just type in keywords like "Massachusetts for sale by owner" and we generally come up #1 in over 9.2 million results. Type "western mass by owner" and we're again #1. Try "selling by owner mass"...yup, again we're #1. This kind of ranking draws buyers from all over the country right to our marketing area. I would hope that you will include a link to www.fsbonetwork.com which will help locate regional fsbo services throughout the country.

[dwford]

Well, after 6 weeks trying to sell my investment house FSBO, I am taking a different direction. I signed papers to put my residence on the market instead, and listed it with an agent.

What I have realized (which really I knew from the start) is that my finances were not in order enough for me to quit my job, buy an investment house, renovate it, and wait for it to sell, all while living on my savings. That coupled with the thin margin I had on it, means I've run out of money...

So, I got a job :SM145: and listed my home. Myself, my sister (she pays rent), her 2 kids, 3 dogs and 4 cats are moving to my investment house, which is 1000 sq ft smaller :SM121: . God only knows how we will squeeze. We also have 3 cars and a camper, and are giving up a 2 car garage....

On the plus side, when this deal is done, I will be able to pay off all the bills from the renovations, refinance the mortgage to 15 years and lower the balance, get a better rate (than 9%, interest only for 1st 10 years), lower my payment, and still have $50k left over.

So in the end I will be in a much better position to buy my next flip than I was for the 1st one. Lesson learned.

Hey, at least I know what a great house I am moving into!!:D


BTW, in the time I was listing my investment houses, 2 houses in the same development,listed with realtors, sold......

[gene]

.

What I have realized (which really I knew from the start) is that my finances were not in order enough for me to quit my job, buy an investment house, renovate it, and wait for it to sell, all while living on my savings. That coupled with the thin margin I had on it, means I've run out of money....

That's what's kept me from becoming a serious flipper. I've made money on renovations to homes I've had over the years, but it's pretty hard to find that diamond in the rough. Add to that the SLOWWW RE market and it's really tough to make a buck.

Ya gotta buy low and sell high, but that's easier said than done. I can't believe some of those TV shows when they buy at $500,000, add $50,000 in renovations and then turn it for only $50,000 profit. Way too thin for me.:SM101:

PS, I don't think they should be able to air those episodes until the house closes and they can give some real numbers.:smiley21: I always wondered how many are still on the market?:SM123:

[dwford]

I definitely want to try to flip again, but next time I will have actual cash to use (instead of credit cards) and will have the resources to wait for the sale.

I plan to keep the investment house on the market FSBO while living in it, and if a full price offer comes along, so be it. Then I would buy a fixer upper and live in it while renovating.

[TommyOH]

Stick to your guns dwford. There is money to be made flipping. We all read that real estate goes in cycles, and it won't be long before the cycle turns again.

[dwford]

Update. I had a 2nd showing of my flip house to a young couple yesterday. When we spoke on Saturday, they told me that the max they could pay was $205 for any house (Iam asking $218). I countered with $212 w/ $3 cash back at closing. I want to close before the next tax bill is due, and that price still nets me a small profit.

They seemed to like the offer and agreed to see the house again. After they toured the house, they told me again that they could only spend $205 + closing costs. I am offering $212 - $3 in closing costs. Assuming about $5 in closing costs, by their method they need to come up with the full $5 out of pocket (they are planning 100% financing - so they have no cash), but with my offer they only need about $2 in cash. The difference in payments is about $30.00.

My view is that if a $30.00 difference in a payment is what breaks the bank, they shouldn't buy any house. Thoughts?

[dwford]

BTW, she drives a Saab 9-3, he drives a Volvo S60, and both dress stylishly.

[atlvalet]

For future reference, you may want to consider a flat fee broker. That's what I did and it seems to have worked. 1% to the listing broker and 2.5 to the buyer's broker, unless I find my own buyer in which case I only have to pay the 1%.

I priced my condo at 379,999 when all other comparable units were listed at $409,000 to $420,000. Now the unit that was at $409,000 is down to $375,000 and another unit that came online at $399,000 is now at $379,000. THe $420,000 is still at $420,000. It only took about 4 weeks for the other sellers to drop their prices to my level.

This California market could turn ugly in the next 12-18 months. That's why I'm selling.

[dwford]

At this point I am pushing to sell my residence and to move into my flip house. I'll live there for the next year and 1/2 then sell it, saving the capital gains tax. Then I plan to buy another flip house, but live in it while I fix it up.