Two nice FSBO advantages

We've covered how buyers can use MLS data to research the listing history and price changes for a particular property. That's because the MLS is essentially a database that contains a ton of information about every listing in the system. And it's easy to retrieve that information - even for listings that have become ancient history.

One nice advantage of a For Sale By Owner listing (one that does not use the MLS) is that there is no such history available to the general public. Buyers and buyer agents can't research your listing and find out how long your home has been on the market; they can't research how many times your price has changed.

Another nice FSBO advantage is that you can easily "start fresh" with a new listing should you ever decide to change your marketing approach. For example, let's suppose that for whatever reason you decide to end your listing with fsbomadison.com (a very popular site that sells a large number of properties each year), and you decide to list your home with a real estate brokerage. When you end your FSBO listing, everything about your listing - most importantly your price - is deleted from the FSBO site. Now you're free to start a fresh listing with your real estate agent. And based on the results of your market analysis, you and your agent can select a price that won't be impacted by your previous FSBO price. In fact many homes that started out as FSBO listings do end up selling at a higher price on the MLS (while of course others don't).

Unless you've made improvements to your home, it's much more challenging to raise your price once you've already established a history on the MLS. For example, check out the listing history for this home currently on the South Central Wisconsin MLS (property details have been omitted to protect the seller):

• This home was listed in March for a price of $399,900.
• The listing expired, and a new listing was started in May at a price of $415,000.

Not surprisingly this home is still on the market. Buyers and buyer agents who come across this home no doubt are wondering how the current price can be justified when the home was previously listed at a lower price. And rightfully so.

Six FSBO Tips

Going FSBO? Here are 6 things you can do to increase your odds for a successful sale:

1. Do your homework and price your home competitively right from the start.
2. Track your neighborhood transactions closely while your home is on the market. Ensure your home remains well-priced relative to your competition.
3. Implement your selling plan before you implement your buying plan. Once you've established your selling plan, then focus your time and energy on your buying plan.
4. Create a positive impression for every buyer that visits your home. See Kathy Quade's article, Showing Well and Selling Well, at DaneCountyMarket.com.
5. Maximize your exposure by choosing a FSBO service provider with a good internet presence. Create a secondary listing on craigslist. It's popular and free.
6. If a brokerage listing on your street is holding an open house, open your house to the public, too. Take advantage of your competition's marketing and traffic.

For 6 additional tips, read our FSBO article at DaneCountyMarket.com.

Can FSBO sellers succeed in this market?

Absolutely. Look at this screen shot from fsbomadison.com. All of the listings below are for homes on the west side of Madison. Note seven of these eleven listings have either sold or are waiting to close. Not bad at all.

On the flip side, look at this screen shot. All of these fsbomadison.com listings are from the village of DeForest. None of these eleven listings are shown as having sold or as having an accepted offer.

Why the difference? Location is a big factor. The west side of Madison has only 6.5 months of inventory, compared to 10.8 months of inventory for the village of DeForest. In other words, housing supply relative to housing demand is much lower on Madison's west side.

If you're planning to go the FSBO route for the sale of your home, research the months of inventory for your area. If your area has 8 or fewer months of inventory, your odds for success will be quite good compared to many other sellers who choose the FSBO route.

We'll offer tips for FSBO sellers in a future post.