7 reasons most FSBOs crash and burn

We’ve all heard the mythical reasons FSBOs think they can sell their house without a real estate agent. But few can, and many fail because trying to sell a home without a real estate agent can be a lot tougher than they realize.
A 2017 Zillow study showed that about 36 percent of FSBOs try to sell their homes sans agent, but many hit roadblocks and eventually hire an agent. Only about 11 percent of sellers successfully complete the deal.
Zillow research shows that sellers think they:

Can save money (57 percent)
Will save time (36 percent)
Know their home better than any agent could (27 percent)
For-sale-by-owners have good intentions, but their knowledge is weak. They simply don’t know what they don’t know. Here are seven reasons FSBOs tend to be unsuccessful — and eventually hire a real estate agent.

1. FSBOs struggle to price their home correctly
FSBOs tend to rely on a home evaluation based on the sale price of a neighbor’s home or the amount of money they put into renovations.
As professionals who are well-versed in the market, agents know that just because you spend $10,000 updating something does not mean you will get $10,000 more for the home when it sells.
Do-it-yourself home sellers also fail to recognize that an updated home is worth more than a home with no updates.
I have lost count of how many times I’ve encountered homeowners with 10-year-old carpet and Formica countertops who think their home is worth the same as the neighbor who has hardwood and granite.
Pricing a home right is an art form that many real estate agents spend years mastering, and even then it’s something that many will hone their entire career. The odds of a FSBO hitting it right on the money the first time are slim, which means there are likely price reductions in his or her future.
2. Emotional attachment is a barrier
Selling a home is an emotional transaction for the owner. Most FSBOs have a hard time separating their personal feelings from the business transaction.
Think about it. How do your clients react when you bring them a low offer. They’re insulted, right? Now imagine FSBOs who just received an offer way under asking price. Or someone tells them their house smells musty or like pets. As agents, we can be a buffer and use the situation constructively. A FSBO cannot because they are in the line of fire.
3. Marketing is a huge undertaking
FSBOs are usually given a packet with guidelines for marketing. However, if you don’t have experience marketing, efforts often end in an epic fail.
Agents hone their marketing efforts as time evolves, and they tailor make marketing campaigns to appeal to the right buyer for a home. It’s not a skill learned overnight. Yard signs, friends, family and social media will only go so far. Also, if a FSBO is not offering a fee for a buyer’s agent, marketing attempts are even more moot.
In the end, most DIY sellers hit obstacles along the way that are out of their comfort zone, or they eventually realize they don’t know what they don’t know (as with any area of expertise). There’s a lot more to selling a home than meets the eye, and most listing agents earn their keep by dodging bullets and avoiding common obstacles that a novice home seller would not be able to avoid.
4. They have to show their own home. Most of my buyer clients feel restricted when a homeowner is lurking during a showing.
For-sale-by-owners have no other way to show the home other than to be present unless they allow buyer’s agents to show their home through a non-MLS lockbox. This makes potential buyers uneasy. They often feel like they cannot ask real questions for fear of insulting the owner.
5. They set themselves up for legal liability
I have had FSBOs ask me how to write clauses in a contract. I have had others ask me how to fill out a property disclosure or if they needed one at all.
I always refer them to an attorney. I explain that if they become my client, I will handle the items on their behalf. But for me to answer their questions without a formal agreement, I would be practicing law without a license.
As Chris Rediger points out in his Inman article about why FSBOs are a bad idea: Everyone makes mistakes. A seller (or buyer) who doesn’t have the representation of a licensed agent pays for those mistakes. Attorneys can close a real estate transaction, but they don’t carry errors and omissions (E&O) insurance. So if homeowner Sandy lists “hardwood floors” as a feature and the buyer discovers it’s just a wood veneer, chances are Sandy is going to pay for that mistake. An agent would have either caught the mistake or covered it with E&O insurance. Let’s face it: this is a litigious society, so what homeowner wants to be a target for lawsuits?
6. Scams are real
As Rediger also points out, scams are a real concern for FSBOs, or at least, they should be. With headlines about Zillow scams and even Realtors falling prey to wire fraud schemes, how can an untrained homeowner be sure?
Common scams include fraudulent appraisal and loan documentation papers, overseas buyer deposits, fake third-party purchases and phishing for personal information. There’s little recourse for FSBOs aside from hiring an attorney.
7. FSBOs sell for less
As a result of all of these issues FSBOs are unequipped to face, their homes tend to sell for less.
According to the 2017 National Association of Realtors Profile of Home Buyers and Sellers, FSBOs accounted for 8 percent of 2016 home sales, and the typical home sold for $190,000 compared to the $249,000 and agent-assisted home sale drew.And as for FSBOs thinking it’s all worth it in the end because they saved that 6 percent commission, research says otherwise.
A 2017 analysis released by automated valuation model (AVM) provider Collateral Analytics found that homeowners will net about the same proceeds whether they sell on their own or through a real estate agent.
The study attributed this to the fact that agents often fetch higher sales prices for homes than comparable FSBO listings, which are enough to offset the commission fee agents charge for their services. So in the end, homeowners who sell with an agent net about the same proceeds, if not more, and have far fewer headaches than those who try to do it themselves.

by: Missy Yost, real estate agent in SC

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Things to Do in Raleigh, N.C.: October 2018

It’s so long to summer, hello to fall! We’ll miss these warm-weather months—baseball games, summer festivals, outdoor concerts and such. But we’re ready to embrace a new season and the new experiences that come with it in the Raleigh area—hockey games, cultural festivals, holiday shopping, pumpkin pies, lots of ways to experience the arts and (last but not least!) the N.C. State Fair!
Carolina Hurricanes—back in action!

Seven home games in Oct. 
Is it October yet? That’s what hockey fans have been asking for a few months since the Stanley Cup Finals ended in June. Yes, it’s Halloween month, and that means the NHL’s Carolina Hurricanes return to the ice at PNC Arena to kick off their 21st season in Raleigh. The Canes (as everyone locally calls them) will play seven home games in Oct., with the puck dropping for the first time against the Islanders (10/4) on opening night. They’ll also take on the Rangers (10/7), Canucks (10/9), Avalanche (10/20), Sharks (10/26), Islanders again (10/28) and Bruins (10/30). Single-game tickets have gone on sale, so join the #Redvolution by wearing red, white and black and cheering on the Canes!

N.C. State Fair

Oct. 12-21 (note: updated opening day due to Hurricane Michael)
For many, the return of the N.C. State Fair (10/12-21) marks the true beginning of fall. Sunny days turn into cool and clear nights where smells of cotton candy fill the air, blinking lights from Ferris wheels and roller coasters light up the skies and jackets and sweatshirts become a necessity. The largest annual event in N.C., with 1,000,000+ visitors, this is the chance to search out thrilling rides, take in more than 100 free concerts from local artists plus devour the most over-the-top food concoctions you can imagine—think chocolate, peanut butter, bacon, doughnuts and tons of other gooey goodness. We wouldn’t miss it!

SAS Championship

Oct. 12-14
See some of golf’s best, including legendary pro Colin Montgomerie who will return to defend his 2017 title, at the SAS Championship, a PGA Tour Championships event. Held annually at Prestonwood Country Club in Cary, the event is widely recognized as one of the most important events of the year. The tournament will once again play host to ‘Wildcard Weekend’—the last full-field event before the Charles Schwab Cup Playoffs.

The Beyond: Georgia O’Keeffe and Contemporary Art Exhibition

Oct. 13, 2018-Jan. 20, 2019
An exhibition of contemporary art at the North Carolina Museum of Art from renowned artist Georgia O’Keeffe, who revolutionized ways to see ordinary things, brings together a significant group of O’Keeffe’s works (featuring enormous flowers, luscious color and desert landscapes) as the centerpiece of an exploration of her continued force as a touchstone for contemporary art. This exhibit is ticketed in conjunction with Candida Höfer in Mexico.

Downtown Raleigh Food Truck Rodeo

Oct. 14
Attention, foodies! The final Downtown Raleigh Food Truck Rodeo of the year is this month. More than a half-mile of food trucks, spanning 11 city blocks, are bringing wood-fired pizzas, buttery lobster rolls, over-the-top ice cream concoctions, drool-worthy barbecue sandwiches and way, way more for thousands of hungry rodeo-goers to chow down on. Free admission, seating for 1,000-plus people and plenty of Instagram opportunities are just some of the elements that make this a can’t-miss foodie event.

SPARKcon 2018

Oct. 18-21
SPARKcon, the totally-weird, totally-awesome creativity festival that takes over downtown Raleigh each year, is truly a grassroots event. The “for the people, by the people” approach uses an open-source planning process that allows more than 2,000 artists to be involved each year. Dance, fashion, music, film, food—if you can name it, you can find an event for it at the festival that spans nearly 15 city blocks. The festival has taken big steps to make it even more accessible for individuals with disabilities, including independent wayfinding navigation with BlindSquare, sensory-friendly packs, a SPARKcon Access Guide (available at the info tent and on the cubes at every intersection) and more (get details here).

BugFest

Oct. 20
Experience more than 100 exhibits, crafts, games and activities at BugFest, North Carolina Museum of Natural Sciences‘ annual event that lets you interact with entomologists and other scientists while learning about the fascinating world of bugs. Featuring the ever-popular Café Insecta, where the brave can sample buggy dishes prepared by local chefs. The best part? The event is totally free for the expected 35,000 attendees. This year’s theme: crayfish and other crustaceans!

33rd International Festival of Raleigh

Oct. 26-28
The Raleigh Convention Center will host the 33rd International Festival of Raleigh, where more than 50 ethnic groups will be represented! The festival includes everything from international food and stage performances to fashion shows and beer and coffee tastings.

Apex Music Festival

Oct. 27
Now in its eighth year, the Apex Music Festival attracts thousands of fans to historic downtown Apex to enjoy live music, street vendors, food trucks, beer and wine and an eclectic mix of shops and restaurants. Two outdoor stages and one indoor theater will host a variety of acts from local, regional and national performers from many musical genres—rock, folk, R&B, bluegrass, country and more. The ticketed event, which is best suited for adults, has a full music lineup you can check out here.

FallFest at Dix Park

Oct. 27
The inaugural FallFest at Dix Park—a family-focused atmosphere with food, drinks, kids and adult activities and live entertainment—will include live music from the Milagro Saints and Counterclockwise String Band, a fun zone with inflatable rides and games, pony rides, face painting, a pumpkin patch and decorating area, hayrides, craft vendors and more fall activities. Food trucks with food, beer, ice cream and more will be on hand, but you can also bring your own small cooler or picnic basket. Dogs (on a leash) are welcome, too!

 by visitRaleigh

 

6 Costs Homeowners Overlook and How to Pay for Them

For many people, a house is the biggest investment they’ll ever make. And whether you’re a first-time homeowner or you’re buying your third property, you’re bound to end up covering some unexpected expenses. Here are six costs homeowners tend to overlook (that can really add up)  and how to pay for them:

1. Property taxes

Be prepared to pay property taxes and keep in mind that they rarely decrease. Homeowners often pay them every month along with their mortgage payments. If your loan is backed by the Federal Housing Administration, you’re required to have an escrow or impound account.

If you don’t have to make property tax payments through an escrow account, they may be due at the end of the year. In some counties, you might pay them in installments.

2. Homeowners association fees

Whenever you move into a new home or condominium, you become part of a community. In many cases, there are fees associated with the maintenance and general upkeep of shared common areas. The money collected might cover snow removal, landscaping or repairs to a meeting room.

Monthly homeowners association (HOA) fees for standard single-family homes tend to cost between $200-$300, but rates can vary depending on several factors, including how recently a housing community was built and the kinds of amenities that are available. That’s why it’s best to know how much fees cost upfront.

3. Insurance premiums

If you own a home, another cost you should include in your budget is insurance. The average annual homeowners insurance premium costs $1,120, according to recent data provided by the National Association of Insurance Commissioners, but the amount you pay may be higher or lower based on where you live and the kind of policy you choose.

Homeowners insurance typically covers personal possessions, liability for injuries that take place on your property, the structure of your house and additional costs associated with living elsewhere if your home is severely damaged. If you live in an area prone to natural disasters, you might need a supplemental policy like flood insurance.

4. Repair and maintenance costs

Repairing or replacing a roof, furnace or air conditioner can be expensive, and at some point, you might have to address plumbing issues or trade in some old appliances.

The cost of home maintenance is another thing you’ll have to factor into the cost of homeownership. You’ll need money to keep your yard, gutters, carpet and everything in between in tip-top shape.

Financial experts generally recommend setting aside 1 percent of your home’s value to cover the cost of unexpected repairs and maintenance. If you’re trying to save money, you’re better off doing some of the work yourself. Just make sure you have enough funds for the materials you need to get the job done.

5. Costs associated with selling a home

Having a home that’s well-maintained not only lets you enjoy your house while you’re living there, but also prevents you from being saddled with additional costs when you’re ready to sell it.

Replacing your roof or furnace might be something you want to put off, but failing to make necessary repairs or meet demands made by potential homebuyers could hurt your market value or cost you a sale.

6. Pest control costs

Pests are a real concern for many homeowners. Over time, all sorts of critters—like termites, ants, spiders and rodents—might invade your home. Depending on how serious the problem is, you might need to fumigate your house.

If you’re interested in buying a home, make sure you hire an inspector to check for bugs and termites that could cause structural damage. While lenders don’t always require homebuyers to pay for pest inspections, it’s important to have one done. You don’t want to close on a house only to find out later that there’s an issue. Termite inspections generally cost between $75-$150, according to Angie’s List.

Build a rainy day fund!

It’s always better to be prepared for a storm than to be caught in a downpour without an umbrella. Despite the high costs, owning your own home can be a rewarding experience.

Hope for the best and prepare for the worst by keeping enough money in your savings account to cover unforeseen costs. Make sure you account for all of the hidden expenses and fees associated with buying a home and budget accordingly.

By the Experts at Hippo, RISMedia’s Housecall