Formal Education of Realtors

I have come across this bit of information on http://www.realtor.org/libweb.nsf/pages/fg006 It's quite fascinating. There is something supremely awesome in the fact that almost half the time, people who 'run' the real estate market did not graduate from college. What a wonderful statistic. Thank you Realtor.com - this is truly inspiring. I am glad to know that my Master's degree in International Business and my husband's Professional Engineering license combined, do not match up to the realtor's Associate degree from Buttfuck University. Super. We are always happy to be treated like dumb animals, especially when we receive solicitating emails that start out polite, and end up threatening with an immenint nuclear holocaust, if we don't list with that particular broker. Stay tuned for such an email, you know it's coming! Cheerio.

The Signs Saga

In M. Night Shyamalan's movie Signs, crop circle signs mysteriously appear, followed by a full scale invasion of aliens. In our soap opera, our FSBO sign that was posted in front of our development for a month, mysteriously dissapeared the night before our open house, followed by a full scale invasion of ......THE REALTOR, known from here on as The Bitch Lady.

The events of the Sign Saga prior and post the Sunday Open House:

1. Saturday night or early Sunday morning, the Bitch Lady throws our sign over the brick gate at the entrance to our development. Alternate case is that she has one of her colleagues do it. Her motive to kill competitive advertising is due to the fact that the unit she is selling is located right next door to ours. Her Bitch personality helps her on her way.

2. Sunday at 12:00 pm, the Bitch Lady puts up her own Open House signs, but is immediately told to remove them from Development Property. While she is taking the signs down and thinking hard where to put them, my husband confronts her in the following manner: “Hi, my name is so and so. If you took my FSBO sign, please put it back by the end of the day. I just want my sign back.” The Bitch Lady then has a ‘guilty’ reaction to the tune of “Oh, sign? What sign?” To this obvious evasive tactic my brave husband answers “The huge red FSBO sign with our address on it, at the entrance to the development.” The Bitch Lady then proceeds to scream at the top of her lungs some undistinguishable crap, which is nonetheless heard all the way down the street by myself and neighbors engaged in an afternoon chat.

3. Sunday at 12:20 pm, the Bitch Lady proceeds to get on her cell phone and call the cops. Her reasons are as follow: “Officer, one of the neighbors is threatening me and my clients. He is about 5 foot 7 and weighs about 160 lbs. He said that if I didn’t return his sign, he would turn up his base music and make it hard for me to sell the condo. Please come quickly and bring a swat team.”

4. Two cop cars show up and proceed to take the Bitch Lady’s statement. Then they come down the street to talk to myself and my husband. They seem sympathetic to the fact that our only means of advertising for the Open House has been unceremoniously removed by malicious realtors. They offer a possible explanation to the tune of “What if a drunk guy was walking from the bar last night and decided to take your sign?” After this explanation is uttered, it sounds stupid even to them.

5. The cops leave and I run to an intersection in our town, which has another sign that we put up. I take it and place it back at the front of the development. We attach balloons to this second sign and Open House traffic seems to pick up.

6. Sunday at 3:00 pm I go for a casual stroll, mainly to check on the temporary sign. I see that it too has gone missing. At this point, I realize that the Bitch Lady’s signs are missing as well. I speak with someone who saw a van with MORRISTOWN painted on it pick up all signs posted on public property. I deduce that the town has come around and picked up our second sign.

7. Sunday at 3:15 pm, two hours before the end of the Open House, the Bitch Lady calls the family, to come back to their condo. She pretends she has no idea what happened, when they tell her that there are no Coldwell signs out front. She tells them not to worry because they are at the town’s Zoning Board and then proceeds to call the Zoning Board directly.

8. Monday at 12:00 pm I go to the town’s Zoning Board to pick up my sign. I only find the second sign with the balloons, which confirms our suspicion that the Bitch Lady sabotaged the first sign. I ask the Zoning Board personnel why the signs were picked up, and they tell me that they receive phone calls from realtors to pick up competing signs. This explains why the town came around first time in a month. Bitch Lady called in our second sign, and her own signs, to cover her ass. It explains why she called the family to come back as soon as the signs were picked up around 3:00 pm the previous day. It also explains why she was so sure where the signs ended up.

9. Monday at 9:00 pm we find our first sign on top of the brick gate by our development entrance. It was returned to us after all. So, who do YOU think too it? Did you think that the Bitch Lady sabotage our Open House or not?

Managing Stress

The one claim realtors make about FSBO’s, that rings absolutely true (at least with me), is how stressful it is to sell your property. Managing the home selling process can be like a full time job. And at one point I let it consume me. I was constantly reading real estate articles (the depressing ones), checking and changing our listings on multiple websites, but most of all I became dependent on the process as a whole. If we weren’t getting phone calls, I was feeling bad. If people were calling and coming by, I was feeling good.

Managing stress is not a factor to be overlooked, when making a decision to sell your home FSBO. If you are the type of person who doesn’t handle stress well in every day situations, I would advise against this route. It is very difficult to let go of something that is looming so large and can seem so important. There are days when I ask myself “Is it worth it? Is the money really worth it?” Because let’s face it, the money is why we are really doing it.

Three weeks after we listed our condo, the stress became unmanageable. I was having back pains, became irritable, and stopped sleeping well. Something had to change, because that was no way to live. So I made a conscious decision to try and focus on something else, and that is when the idea for this blog was born. The blog would provide me with an outlet I desperately needed. The first day that I felt the stress lift, we had our first offer. Chance or not, it was a lesson for me, that stress actually prevented buyers from coming and perusing our home. Imagine yourself walking into someone’s home, and the owners being all stressed out. Subconsciously, you would be turned away, no matter how nice the inside. Please, don’t do this to yourself and your buyers! Learn from my mistake instead.

Realtors who mislead themselves

I copied this article from one of the most popular realtor websites - www.realtor.com. It conveys false information to the realtors, buyers and sellers alike. This goes to show that realtors will go to any length, in order to convince themselves that FSBO sellers fail to do get the job done.

http://www.realtor.com/Basics/Sell/Why/Fsbo.asp?poe=realtor
FSBO Woes: Why It's So Hard to Sell Your Own Home
By Marcie Geffner

Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselves are very experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five reasons why.

1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including the gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS. This claim is plain wrong. FSBO's can and do list their homes on the MLS. Our MLS listing number is MLS#2308810.
   2. Agents won't show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects. Again, this claim is untrue. We've had a number of agents calling and coming by in order to show to their clients. Our neighbors and friends had similar experiences.
   3. FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers. This statement contradicts the popular claim, that a realtor usually sells the owner's home for a higher price than the owner would himself.
   4. Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer. Any FSBOs who've done their research, will know to leave the house for the buyer to peruse. And if the buyer wants a large price reduction, trust me - they won't be shy asking questions about appliances, electric bills, etc.
   5. FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (e.g., California). A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes. This statement is an exaggeration. FSBO sellers will and should hire a real estate lawyer to represent them in the transaction. Those who don't, are asking for it.

Have you had any offers?

After our condo has been on the market for one month, we had one offer. It came from our 'perfect' couple described previously and had one big problem. The couple wanted us to drop the price $35K. Hell no. But was this the case of a greedy buyer, a buyer who couldn't afford it, or a buyer who bargained hard knowing the market was on their side? Likely, they were looking for a huge price reduction because they thought they could get it due to market conditions. They were also looking outside their price range, hoping for a desperate seller. And finally, they believed that they deserved to live in our condo, even though it wasn't affordable.

I don't really blame them. A lot of condos in our area are crappy. I just hope that the next offer we receive will be much more reasonable and not start out with a question: "So what price range were you thinking about when you went to sell your condo?" The price range is $495K, which happens to be the listed price posted on all our brochuers, websites and the MLS. People please, if you want a price reduction, don't shop at Prada. Even though I believe that everyone totally deserves to wear it!

Pricing and Affordability

Pricing your home correctly is probably the most important factor in selling your property within a reasonable amount of time. Don't be greedy! The key thing to remember is that people searching for homes are also greedy. For people who've been on both sides, this must ring true. When buying, we always complain of high prices. When selling, we are always trying to get the highest possible price. So, greedy seller and greedy buyer combined = no sale.

Realtors think that by running their CMA or Competitive Market Analysis, they are giving you something you couldn't figure out yourself. That is probably true for highly customized single family homes. Not for a condo in a development with two other similar condos up for sale and ten similar condos that have recently sold. This is why I think CMA is stupid and it was stupid of Foxtons to try and convince me otherwise: I can figure out the fair price of my condo by the criteria listed above, and skip the Foxtons sales pitch at 10:30 am on a Saturday morning.

However, putting our condo on the market at a fair price, was a mistake. We did not attract a single buyer. Thankfully, it took us only two weeks to figure that out. Once we've dropped the price a whopping $15K, we started to get interest. So, was it because 'it's a buyer's market'?

People drop the expression 'buyer's market' all too often. In my opinion, it's a buyer's market due to vast amounts of inventory available to them. There is just one small catch - the prices have not come down enough to align with the rising interest rates. It's like this: you can look all you want, but you can't actually afford it! Wonderful. Where does it leave us?

Not in a very comfortable zone. We are aiming to attract young professional couples, since our condo is exactly what such an archetypal couple would want. It is clean, modern, spacious, inviting, bright and in perfect location for NYC commuters. Our generation X or Y couple doesn't have any kids yet, but might be thinking of them. The couple shops at Whole Foods, Trader Joes or in the worst case scenario Stop&Shop. The couple has an SUV or a luxury car. The couple is either moving away from the urban NYC to the 'urban' suburbia or it is looking for a better location within NJ. And thankfully there are many such couples. But can they afford it?

Hard question, and I don't know how to answer it. If we were the aforementioned couple, we couldn't. We can only afford our next property because our current one appreciated at a 33% rate. Lucky us! Unlucky first time buyers, who totally deserve to live in our awesome condo, and not the typical 1980's NJ abode with wall to wall shag carpeting and mirrored closet doors.

Market Research - Part II

Here are some more eye catching facts about the demographic makeup of Morris County NJ. Here, an index greater than 130 signifies an outstanding skew.

This is just a small part of the research that we've done in order to be a successful FSBO. So, when we get rude phone calls from people who think they know something we don't, it just reinforces the negative image that realtors perpetuate.

Market Research - Part I

Realtors think that the general public is not informed. In some cases they are right, since not everyone has access to all kinds of useful information. But I may! If I wanted to know exactly who my target buyer audience is, I don't need a realtor to tell me and in the process eat a chunk of my money. Instead, I suggest realtors stop treating people like sheep and stop showing them crap housing. But who is my buyer audience in Morris County?

Demographic Key Findings for Morris County, NJ
Reference: State

Skew Attribute
very good - Affluent Suburban Spreads
very good - Whites and Other Races
very good - Income $100,000 +
very good - College Graduate
good - Own

**Source: Spectra Marketing Data Release 06B

Well, looks like we've eliminated pretty much everyone 'undesirable' and we end up with a relatively agreeable public (at least according to the demographic report).

While the statement above is sarcastic, people coming to view the condo actually drop statements like that. One woman who came in had the indignity to say: "Morristown would be OK if it weren't for those Mexicans, scattered like cockroaches on Elm Street...." If we were prepared for anything, we were not prepared for this. Not from our nice demographic profile above. It is sad but true, that those people exist everywhere, and are continuously undermining efforts to accept diversity as a fact of life. Needless to say, I wanted to pull that woman out of the house by her shaggy hair, and give her a nice kick in the backside.

FSBO Resources

In this day and age there are a ton of resources for anyone who wishes to sell their property FSBO. The internet has revolutionized the way we search for homes. This might not apply to the Silent and Boomer generations, but it is a perfect fit with Gens X and Y. Generation X didn't grow up with the internet, but they quickly adapted to it once they've entered the workplace. Most of Gen Y grew up with computers, and surfing the net is second nature to us. We decided to take advantage of the digital age and create a massive advertising campaign using the internet as the anchor.

1. We created our own website www.34TAFTLANE.com using Microsoft Internet publisher. At www.godaddy.com we got a domain name for $15.
2. We posted on www.craigslist.com. Craigslist is key to any successful post as it's constantly browsed by thousands of people of all ages. The best thing about craigslist, is that people who search on it are usually serious buyers who know what they want.
3. We took advantage of websites like www.FSBO.com, www.ForSaleByOwner.com and www.Owners.com. These websites are well organized and get a good amount of traffic. It is questionable however, whether any prospective buyer leads come from these websites, or if they are mainly used by sellers.
4. We posted on Garden State MLS - www.gsmls.com. The MLS, which stands for Multiple Listing Service works in conjunction with www.Realtor.com. The MLS posting costs $500 and lasts until you sell. These websites are not so much for principle buyers, as they are for buyers' agents. Buyers' agents are realtors who help buyers find and negotiate a property sale. They are usually compensated 2% by the seller/owner for bringing in a buyer. Working with them is OK, but the last thing they are is your friend.
5. We tried out NYTimes.com, which brought absolutely no results and cost $125 for 14 days.
6. We've put large, laminated FSBO signs around town with our website spelled out in reflective letters. This cost about $30 and was totally worth it. People driving around come by attracted by the sign, and check out the website because they are intrigued.
7. To reach the older public we've put ads in the newspaper. I ran a NY Times ad in the Sunday Times for our open house. This cost $175 for one day and brought absolutely no results. Total waste. The only phone call I received, was from the annoying Foxtons Realtors, who insisted that we needed their services. They were adamant about coming and showing us 'What we bring to the table'. Well Foxtons, I am happy that you only charge 3% vs. the usual 6% for an exclusive listing. However, you obviously lack in listening skills, because when told 'Not interested' you kept pressing. They called 3 times and will probably call again.
8. We've posted on all small and obscure FSBO sites that we could find. Luckily that paid off, as we are seeing a large number of people referred to our own website through these smaller ones.
9. We are holding an open house bi-weekly. According to research quoted on National Association of Realtors website, open houses are ineffective. They mostly bring in curios weekend gawkers. That's OK, since we firmly believe that "You never know".
10. We have posted tear-off ads around town. No way to track that.
11. In summary - most leads we've got came from #1 Laminated signs and #2 Craigslist. So you may ask if all the other efforts above were fruitless. Perhaps and perhaps not, since you never know and we haven't sold our condo yet.
12. The one website I found very useful is www.realestateabc.com. It covers many questions you might have, concerning the sale of your home, in a clear and unbiased way.

Why Go FSBO

My husband and I decided to put our condo up for sale FSBO. Our friends and neighbors understood immediately the reasons behind doing it ourselves, as opposed to going through a realtor. The question that realtors can't stop asking us is "Why are you selling FSBO?"

The answer doesn't vary too much: for 6% of my $500K dollar condo, I can do the job. The realtors don't think so. In their minds, FSBO sellers are threatening to take away their business. In some way realtors are right. FSBO sellers are challenging the traditional buy and sell real estate transaction. However, they have all the right to do so. After all, it's their property, and there is no reason why an owner can't decide to sell on his own.

Oh, and one last thing. Realtors are essentially middlemen in the transaction. They produce no output. They get a cut of what's not theirs. And I would rather give my money to a lawyer to mediate through a complex real estate transaction.