HOW FSBO (FOR SALE BY OWNER), Even in Our Sellers’ Market Could Negatively Impact Your Sellers Net Proceeds
We’ve heard it over and over this past year, we are in a historic sellers’ market due to a shortage of real estate inventory paired with voracious buyer demand, the most memorable concept from ECON101, Supply and Demand.
Our feverish housing market may tempt some homeowners to try selling their house on their own (known as For Sale by Owner or FSBO) instead of working with a local real estate professional. When the inventory of homes for sale is as low as it is today, buyers are eager to snatch up virtually any house that comes to market. This makes it even more tempting to FSBO. As a result, some sellers think selling their house will be a breeze and see today’s market conditions as an opportunity to avoid commissions. Before you commit to going it on your own, let’s unpack why it could be a big mistake and how it may actually cost you more in the long run.
According to the PROFILE OF HOME BUYERS AND SELLERS,published by the National Association of Realtors (NAR), 41% of homeowners who attempt to sell as a FSBO did so to avoid paying commissions and/or fees. In reality, even in a sellers’ market, selling on your own likely means you’ll net a lower profit than when you sell with the help of a knowledgeable local agent.
The NAR report explains:
|“FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $217,900 in 2020 (up from $200,000 in 2019), and still far lower than the median selling price of all homes at $242,300. Agent-assisted homes sold for a median of $295,000. Sellers who began as a FSBO, then ended up working with an agent, received 98 percent of the asking price, but had to reduce their price the most before arriving at a final listing price.”|
|LINK TO FULL NAR QUICK REAL ESTATE STATISTICS,
With A Market Overview, Home Buyer Statistics, Home Seller Statistics and FSBO Statistics: https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics
Referencing the above graph, that’s a whole lot of money to risk leaving on the table, and far more than what you’d save on commission or other fees. Despite the advantages sellers have in today’s real estate market, it’s still crucial to have the support of a trusted real estate expert as your guide through the sales process, especially in San Juan County. The San Juan Islands have unique market conditions and influences that make many Zillow Zestimates inaccurate due their inability to account for the differences and subtle nuances in properties here. Additionally, our county has atypical fees, requirements for sellers and buyers, and building codes and utility issues to contend with. Local real estate professionals are trained negotiators with a myriad of housing market insights that average homeowners may never have. A local agent’s expertise can alleviate much of the stress of selling your house and help you close the best possible deal and walk away with the highest seller’s net proceeds.
The bottom line, if you’re ready to sell your home this year and you’re considering doing so on your own, be sure to think through that decision carefully. Odds are, you stand to gain the most by working with a knowledgeable, local and experienced real estate agent who specializes in the San Juans. If you’d like to discuss your options and/or learn your home’s true market value let’s connect and discuss how we can help you reach your real estate goals.
-Cheers to Sold,
I cannot stress enough the importance of accurately pricing property for current market conditions. Market conditions change in as little as 60 days and can be very different from when you consider selling to when you’re ready to call your broker. San Juan County’s transition from December 2020 into 2021 is an example of how quickly markets can change. Though we continue to experience record-low inventory throughout the San Juan Islands our median sold price has grown to $815,000 from $618,750 seen in December 2020. Additionally, our Days on Market (DOM) changed, from 12 in December of last year to our current 44. These changes with your individual real estate goals can impact your listing price. Know, our market is still exceedingly hot, with many accurately priced properties selling quicker than less appealing and overpriced properties.
Accurately pricing property is part art and part science. Using the same approach as your appraiser to evaluate your home, we compare similar properties, make adjustments for differences, track market movements, and assess present inventory stock to arrive at a range of value, to arrive at an educated broker price opinion. This is where a savvy broker with a deep knowledge of your hyper-local, regional, and national markets can be the difference between For Sale and Sold.
Some sellers may feel pricing high allows for negotiation room, offers room for price reductions, and/or buyers will present offers despite the listing price. This is flawed thinking; not only will pricing inaccurately reach buyers outside your target, but data shows pricing your home too high for market conditions nets sellers less than if they’re priced accurately for market value, defined as the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. The financial loss of a stagnant listing often exceeds the extra mortgage payments paid as well as the unrealized hassle factor of keeping your home spotless for showings and affects the value a buyer ultimately chooses to pay.
To illustrate the impact of accurate pricing in the real market, the below chart is data pulled for the homes sold in Area 901 on Orcas Island which includes the communities of Crane Island, Deer Harbor, Doe Bay, Eagle Lake, Eastsound, Obstruction, Obstruction Island, Olga, Orcas, Rosario, and Westsound. The chart outlines data from the 154 single-family homes sold over the last 365 days comparing the number of days each took to sell, the median sale price, and the percentage of sale price against the original list price.
As seen, accurate pricing directly influences the amount of time your property spends on the market and impact your Return on Investment (ROI). Property values are not set in stone; they change in value depending on many key factors. If you’d like to know your property’s value within our current trends, please contact us. We offer free, no-obligation assessments and would love to talk about your real estate goals.
– The Wally Gudgell Group
Why LOCAL Is The Right Choice For The San Juan Islands
‘Buy Local’, ‘Island Grown’ and ‘Eat Local’ are phrases heard from many an islander and seen throughout the islands and on our transportation. We experience the benefits of these ideals to our island sphere in something as small as purchasing dog treats from Jeff at Pawki’s for Pets or in more important investments such as hiring local firms like Madrona Point Insurance to protect our island lifestyles.
You may ask in regards to one of the largest purchases made in our lives, real estate, will buying or selling with a local real estate expert translate into better representation? To answer your question, undoubtedly yes. You will enjoy a more distinctive and personal experience along with the benefits below:
1 :: Local Knowledge Is Power
When buying or selling in The San Juan Islands an advocate with extensive understanding of our remarkable island market and lifestyle significantly increases your insider knowhow easing your real estate voyage. An island grown and trained agent arms you with knowledge of the myriad of idiosyncrasies of island real estate, including and not limited to shoreline regulations, archeology, septic systems, wells, community water systems, building regulations and local financing options which in real time equate to saved money when either selling or buying in The San Juan Islands.
Local Island Knowledge, a negotiation tool that can be offered only by local brokers is developed while immersed in our unique market over time paired with interactions within our island communities. This local insight atop a solid understanding of real estate can be a dynamic advantage offered by local brokers who have spent their career studying, working and living in the San Juan Islands.
2 :: Readily Available Boots On The Ground –
As many know, our market is smaller than that of our mainland neighbors and as such can require the reflexes of a cat to seize an opportunity. The opportunity to show property NOW, Not now, but right now, around ferry schedules or around the less predictable Orca Whales. Having a set of boots on island has also helped uncover on the ‘street’ the ideal, one-of-a-kind perfect opportunity sometimes weeks before Mainland America brokers discover the property through online tools such as the Northwest Multiple Listing Service, NWMLS.
Your real estate expert on the ground, in the Orcas community allows buyers and sellers the advantage of time, an increasingly more significant element in the real estate equation.
3 :: The Ultimate Social Networking Channel –
With over 85% of Mainland America real estate transactions starting online, island brokers have capitalized on web marketing channels while continuing to thrive in the traditional. True to our island roots, our community is firmly rooted in traditional face-to-face while embracing the ever-growing online networking channels to build one amazing blend of community.
Local brokers are connected in the island community. We network at community events, volunteer at our many non-profits and still talk real estate over lunch with friends. Enlisting a local broker with strong community ties and values along with a significant regional, national and worldwide network can offer buyers and sellers a micro and macro networking advantage that has a huge impact.
4 :: Trickle Down Community –
Shaping our island’s character and vitality may be the most important of all the reasons to “Shop Local”, “Eat Local”, purchase “Island Grown” products and to enlist a local team for your real estate needs. Island businesses and ardent residents give rise in our community to its distinct personality. Local community-serving businesses and residents build our community; we create jobs and opportunities that expand the landscape for local entrepreneurs ultimately promoting the prosperity of local organizations, residents and our real estate market.
“Hiring local talent does not mean limiting exposure or professionalism – It Means nurturing local businesses, our island community and prosperity, creating jobs, supporting local non-profits, And All While signing up for more attentive personal service and a deeper understanding of our unique island real estate market. I’m here, call me let’s do lunch and talk real estate in The San Juan Islands – One of my favorite subjects.”
-Wally (360) 507-5443 mobile
It’s difficult to think anyone who has seen The San Juan Islands and Orcas Island specifically would need even one more reason to call Orcas home, or at the very least, their home away from the millisecond pace of a Mainland America Home. And, without further ado for those in need I present a few reasons to get on the next ferry to change your zip code and call Orcas Island Home!
I will go deeper into each reason on my top five over my next blog posts, but for now a few notes to mull over while stuck in traffic.
#1 – COMMUNITY
Orcas Island is a community like no other. Reminiscent of the Mayberry friendliness of the Midwest paired with culture rivaling the sophistication of many micro-neighborhoods of metropolitan cities. Think SoHo, Silver Lake, the Mission District or Wicker Park surrounded by the Pacific Northwest’s finest troposphere, organic farms, the crystal clear Salish Sea all at a pace that tops out at 45 mph on island thoroughfares. Savoring the flavor of life, its bounty and beauty is at the top of any good Islander’s to do list.
#2 – REAL ESTATE OPPORTUNITY
The opportunities and nuances of Orcas Island Real Estate is something as a second-generation island realtor I know a bit about. Our market is as unique as they come. Buyers can choose from waterfront cabins poised on breathtaking shorelines for as little as $400,000, majestic cottages or homes tucked into our beautiful island starting at $150k or if you’re in the market for luxury, choose from one of our exquisite multi-million or million dollar island retreats bringing to mind the finest art or architecture and comforts with one thing in common: Excellence.
#3 – QUALITY OF LIFE
For those who dream of slowing life to an organic 45mph pace with nature from concrete cookie cutter surroundings there is no better oasis than Orcas Island to indulge this call. Lapped by the iridescent Salish Sea and views of the snowcapped peaks of Mt Baker, Rainer and the Olympic Mountain Range and shaped of tranquil pastures, organic farmlands and mountaintops boasting marine and mountain views painted in fir, pine, madrona, ash and birch with ferns and moss accents finished with natural ponds and springs to frame. Orcas Island is the most diverse topographies in the San Juan Islands with truly something for every taste.
#4 – EDUCATION
Education is important to families, retirees as well as young or young at heart adults alike and Orcas Island offers one of the finest educational solutions in the Pacific Northwest. In addition to an award winning public school system grades Pre-K through 12, Orcas has a wide variety of private options. From an eclectic array of retreats, seminars, workshops and independent higher-education offerings, aspirations and educational passions are limited only by time. Many find there is simply not enough time to explore all the fascinating subjects available made possible through the amazing population of famous authors, Oscar winning directors, master gardeners and chefs, world-renowned artists and spiritual guides that call Orcas Island home and keep us happy, active, healthy and fulfilled.
#5 – EMPLOYMENT
Working on island time has many advantages that cannot be found in the Mainland America workforce. Beyond the most enjoyable commute time imaginable, many who call Orcas home come to retire, but still fill their internal need to keep busy and contribute by volunteering with one of our many nonprofits to create the island and world they wish to live. Others still, continue in their chosen fields downgrading their workweek to a part-time schedule or sharing their wisdom as community mentors or in local government.
Having a wealth of exceptionally talented industry leaders and creatives as your community gives rise to exceptional opportunities to build a resume. Folks normally overlooked in a sea of applicants often find the small community experience a chance to intern, learn or work with amazing mentors. We get to know each other at the post office, the grocery or hiking the beaches – We learn of each other’s dreams, goals as well as character. An opportunity you rarely enjoy racing through big box stores. Though I will add, we do run into fellow islanders at those Mainland big box stores, where we wish each other a quick “Hello, yes I made the trip over today… me too, cant wait to get home and I will see you on the ferry.”
As I said it’s truly difficult to imagine anyone after seeing photos of beautiful Orcas Island would need another reason to call Orcas home and it has been my pleasure to provide a quick overview of my top five reasons I call Orcas home. As promised over the next few blogs I will explore deeper the top reasons I feel Orcas is an optimal place to live and I look forward to helping you indulge your inner voice telling you Orcas Island is your new zip code.
Please also know I am here to directly answer any questions you have about life on Orcas, buying, selling or upgrading an Orcas Island home.
(360) 376-2172 mobile