A "do It Yourself" Real Estate Revolution Is Brewing Admidst A Paradox

People are fed up with the current real estate system and are bypassing real estate agents and doing things for themselves with the help of the internet in record numbers. Recall that in the past few years, the number of buyers that found their house using a real estate agent decreased by 30%. While the number of buyers that found their house using the internet increased by 400%!

Pretty much everyone agrees that real estate agents aren't doing a great job of selling houses anymore. But homeowners trying to sell their own homes are only copying agents - copying what isn't working.

I'd like to be able to say that this is what the typical for "for sale by owner" seller will do:

- Go to the local hardware store and pick up a plastic red and white "for sale" sign.
- Handprint his cell phone number or personal phone number (can't they see that no one can read it?).
- Post the sign with the wire stake that comes with it.
- Maybe list it on the MLS or on a FSBO (for sale by owner) site.
- Believe he's done all he can, sit back and wait, and hope he gets a buyer.

This is a pathetic attempt at selling a house. Yet, if you only did this you would be way ahead of the pack! This minimal attempt at selling isn't even what the typical FSBO seller actually does. Take a look at these statistics found on Trulia.com, a popular real estate research site:

FSBO METHODS USED TO MARKET HOME:

Yard Sign . . . 50%
Friends/neighbors . . . 29%
Newspaper ad . . . 31%
Open House . . . 25%
Listing on the Internet . . . 21%

This is stunning! Clearly the average FSBO seller hasn't a clue how to effectively market their house using the most basic tools and resources let alone using all the great tools now available. Yet the FSBO movement is growing. So what is going on here?

I BELIEVE THIS COUNTRY HAS A SERIOUS 'MINDSET ISSUE' REGARDING SELLING HOUSES.

Americans historically have always had a strong "do it yourself" mentality. No wonder we so readily embrace "doing it ourselves" instead of using a professional. No wonder we love finding our answers to almost everything on the internet.

I think that almost every homeowner would sell their own house if they thought they could have a successful sale.

Look at how hard you work for your money and what you do to try to save. Maybe you clip coupons and look for sales. Or drive by several gas stations looking for the best price. You almost certainly comparison shop to get the best rates on investments, your mortgage, long distance coverage, and insurance, just to name a few. Clearly, no one wants to spend an extra $10,000, $20,000 or more on a real estate commission if they don't have to. Most people don't believe agents are worth the money, anyway.

So why don't more people sell FSBO? I think there are four main factors for this.

1. The real estate industry runs a great propaganda machine that is doing a good job at scaring the daylights out homeowners. They want to keep their monopoly firmly intact. I read articles and blog posts everyday telling homeowners the myriad of things "they won't be able to do themselves". But most of it is just not true! Most of the "can'ts" they mention aren't things agents do for sellers anyway!

2. Most people don't believe selling their own house is a possibility for them. They think it will be too hard or take too much time. Once again, I call on Trulia.com. They found:
 
THE MOST DIFFICULT TASKS FOR FSBO SELLERS:
Getting the right price . . . 15%
Understanding paperwork . . . 18%
Preparing/fixing up home for sale . . . 15%
Attracting potential buyers . . . 9%
Having enough time to devote to all aspects of the sale . . . 7%

I think many people like the "concept" of selling their own house, but they are daunted. They are scared and unconvinced that they will be able to sell their house effectively. And with the average feeble FSBO selling attempts, they aren't far wrong. Many people would sell their own house if they understood exactly what they needed to do.

3. Home sellers don't know what else to do. The majority of people just follow the status quo and use an agent because "that's what everyone does", which is NEVER a good reason to do anything! Plus they don't see a viable alternative.

4. The gap left by moving away from realtors has not been sufficiently replaced with a cohesive selling concept. When we've moved away from using other professional services towards doing it ourselves, we have had to fully embrace the technology to do so. You had to figure out how to use Turbo Tax before before you fired your accountant, right?

At best, home sellers are gathering bits and pieces of information from here and there, some of it good, some of it not. Then they apparently aren't even using that much of what they find!