FSBO for neighbors

trilobiteSeptember 8, 2011

We were thinking of doing a short FSBO just for immediate neighborhood.

Distribute flyers, mention in the flyer that we think that this is one of the prettiest neighborhoods in our village (which we do), let folks know that if they've ever had a friend, acquaintance or relative express an interest in living here, our house is on the market.

After that introduction, the flyer would include description, features, address, a website with pictures, assessed value and the price we'd be interested in (which is below assessed value and would be well in line with comps).

How does that sound? If it doesn't work pretty quickly, we're going to go the more conventional route, but we're thinking it can't hurt.

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I've just done that. I put together a "Dear Neighbor" flyer with a photo of the house on one side and details on the other. I included my phone number and email address. I had it printed 2-sided on good quality paper at FedEx Office.

I didn't show the assessed value or price on the flyer, nor did I create a website although that would have been easy to do. When someone emailed who was interested, I said that we'd just interviewed 4 agents for the listing and their comps all showed a price of $xxx. If that price was in the range, then the people were free to look at the house.

I put 20 fliers on door handles around the neighborhood, skipping ones where it seemed the owners were out of town and focusing on houses with children. I got a nasty email from one neighbor saying that fliers in door handles just advertised that the owners were on vacation and he'd removed 3 of the fliers plus his and thrown them away. Ok, not a totally invalid point. Anyway, of the 16 fliers that actually got delivered, I got about 8 responses and had 7 families come through the house (the 8th declined after hearing the price).

I'm assuming all the buyers were qualified as my town (and neighborhood) is fairly high-income and a lot of houses are selling with all-cash offers. The reason I didn't advertise more aggressively as a FSBO, on Craig's List for example, is because I didn't want to go through the work of making sure buyers had pre-approval letters from their lender. I think a much larger percentage of random buyers from FSBO websites would have not been qualified, and I wanted to avoid that hassle. But I was willing to be a little more lax with friends-of-neighbors because I'm assuming they'd be financially secure.

Three of the families came back for 2nd viewings and seriously considered making offers on the house, but there were 2 factors that make our house less desirable (no open kitchen/family room which everyone wants these days, and we back on to a street rather than backing on to another house).

When we signed our listing agreement, we excluded these families from the agreement for 10 days.

As long as you don't mind the work of getting the house ready for a showing, and you're comfortable that your neighbors' friends are going to be qualified buyers, I don't think it hurts to try a flyer.

Good luck!

    Bookmark   September 8, 2011 at 1:42PM
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Annkathryn, I'm glad to hear it worked out so well for you!

You've exactly expressed my feelings about doing the whole thing FSBO, too much aggravation, but I think a targeted audience of neighbors won't be bad.

    Bookmark   September 8, 2011 at 1:57PM
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Before you price it publicly, I strongly suggest that you get an appraisal done so you know whether the price you're thinking of is in the ball park, or not.

You can keep the results of the appraisal secret from any potential buyers so you can price it a bit above appraisal, if you like. Or, alternatively, use the number in your negotiations if that helps your position, too.

An appraisal is not the same as a Competetive Marketing Analysis that realtor might offer you in order to entice you into listing with them. A good appraisal should give you an accurate idea of what your property would sell for today, (not what you "might" be able to get for it) That's a very useful number to know.

Appraisals cost $300-600 in most places for SFH w/o acreage or non-residential elements. The amount is deductible from any net sale proceeds when calculating the capital gains. I would never sell, even with a realtor, without one and certainly never as a FSBO without one.


    Bookmark   September 9, 2011 at 3:48PM
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If the Realtor is worth anything, the CMA should be very close to the appraisal value. Both the appraiser and the Realtor are using the same comps, or should be.

    Bookmark   September 9, 2011 at 4:22PM
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NCRealEstate guy,

Of course, the CMA and an private appraisal should be close, but the appraiser is NOT hoping to be a party to the sale, i.e. get the listing and the realtor is.

What a realtor proposes as an asking price, for better or worse, is a huge piece of many sellers' decision-making process over who to list with. We often see that here when people complain that their house isn't selling despite the asking price being what their chosen realtor recommended. And we usually tell them, what? Your price is probably too high.

Also it's been my experience that an appraisal is a useful, gut-check version of what you could get today, as is, from a shall we say, an "experienced" buyer. Not what you might get, not what a novice seller might hope for (or even "have to get"), nor what a novice buyer might be persuaded to pay, etc.

Nope, an appraisal should be as concrete a number as might be used by a court to divvy up assets between warring parties. In other words, a number devoid of all the emotional and personal folderol that seems to stick to many home-sale deals.


    Bookmark   September 10, 2011 at 6:31PM
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