The reason is that a real estate listing contract, once signed, doesn't give an agent much incentive to spend money marketing a client's property.   Paying for professional staging, color brochures, virtual tours, professional photographs, and classified ads might raise the sales price of a house by tens of thousands of dollars, but the listing agent will often get only about 1.5% of that increase (assuming the total commission is 6%, and that it's split between the listing agent and buyer's agent, and split again between these agents and their respective brokers).  If an aggressive marketing campaign were to push up the price of a house by $20,000, a listing agent might get only $300.  

And that's only if the house sells.  If the listing contract expires before then, and if it isn't renewed, the agent will get nothing.   Spending money to market a client's property, in other words, is a high-risk, low-return investment.  No wonder agents scrimp.

As a FSBO seller, though, each dollar you spend on marketing offers a much more generous return.  Splurging on marketing also helps you overcome the perception some people have that FSBO sellers aren't serious about selling their homes.  One of your marketing goals is to persuade prospective buyers that you're committed to selling your house and that it's worthwhile for them to check it out and prepare an offer.

Here's to make sure your property gets noticed by prospective buyers:

Signs

Many flat-fee brokers or national FSBO website chains will ship corrugated plastic yard signs as part of their packages.  I recommend that you opt instead for a sign that hangs from a big wooden yardarm (also known as an L-post).   You'll also want sign riders--narrow signs that give people special information (e.g., "Swimming pool," "Home warranty," "Guest house," "Brokers welcome," "Open house Sunday 1-4").

Unethical agents will sometimes steer their clients towards their own listings.  This is a problem that affects all sellers, not just those selling "for sale by owner."  To keep these agents honest, post directional signs so that they can be seen if an agent tries to take a circuitous route to avoid your home.

	This cheap sign makes it look as if the seller isn't committed to selling.  Buyers won't want to invest time and money inspecting a house and preparing an offer if they believe the seller isn't willing to sell for a realistic price.
	A handsome sign on a wooden yardarm (or L-post) hints at quality and elegance, and signals to buyers that you're serious about selling.
	Plastic sawhorses are fairly cheap (about $15), and can serve as stands for open house signs (though they might get stolen in high-crime areas).  If you're in a windy area, put bricks or rocks on the horizontal platform.

You'll also need open house signs.  I like to use four A-frame (or A-board) Open House signs on nearby corners and one in front of the house.   These signs should be double-sided and have arrows pointing towards your house.  If you like, add your address to the sign using pre-cut vinyl numbers and letters.  Lightweight A-frames can blow down.  If you live in a windy area, get heavy wooden or metal ones.  

Home improvement and office supply stores often sell small plastic Open House signs on H-stakes.  These work well if there are nearby grassy public areas (parks, schools, and so forth) where you can briefly put the signs for the duration of your open house.  Don't put these signs in a neighbor's lawn without first getting permission.

Local FSBO website businesses will sometimes rent signs as part of their listing packages.  If there are no local FSBO businesses in your area, try calling local sign businesses or go to a home improvement store.  

If you're cooperating with buyers' agents, it's a good idea to put up a sign rider that reads "Agents welcome" or "Brokers welcome" or "MLS listed."  Agents sometimes find FSBO homes while driving around with clients.  The sign will encourage them to stop and look at your flyers.

Advertising

I recommend you market your home to two different groups: (1) traditional buyers who work with buyers’ agents, and (2) nontraditional buyers who want to eliminate the middleman and deal directly with sellers.

The best way to reach traditional buyers is to list your home on the Multiple Listing Service (MLS).  (See below for more details.) But the MLS isn’t a good way to reach nontraditional buyers. MLS rules won’t allow listings to be identified as FSBOs, nor will they allow the seller’s contact information to be displayed to the public.

Fortunately, there are several online resources where nontraditional buyers often use to find FSBO properties. None of these resources is the dominant player yet, so it’s a good idea to list your home on several of them.

Careful!  Some FSBO directories or directory-posting services are phonies--set up by real estate agents and mortgage brokers to grab leads. Their goals vary. Some want to intercept buyers so they can capture the buyer’s agent’s commission. Some want to redirect callers to other listings. Others want to pre-qualify buyers so they can later sell them overpriced loans. Here’s how to avoid the phonies: Only list on FSBO directories that display YOUR contact information.   You should also be wary of companies that have buyers dial a toll-free number followed by an extension to get in touch with you. I tested one of these services and wasn’t able to get through to the seller. Instead, the broker who ran the service captured my cell phone number and called me back. His goal may have been to get a commission by intercepting buyers.

Here’s a list of the two most popular national FSBO directories. Both are free, and both allow you to post your own contact information. We recommend that you post ads on both of them.

1. Zillow.com.  You’ll likely disagree with Zillow’s “Zestimate” (appraisal) of your property’s value, but don’t worry about it. Zestimates are notoriously unreliable.

2. Craigslist.org. It’s poorly organized and you have to repost your ad each week, but many buyers look for FSBO properties there. So many, in fact, that many real estate agents try to work “FSBO” into ads for traditional listings (e.g., “This property is NOT a FSBO”) so that they’ll show up in more search results.

In addition, there are lots of local FSBO websites that allow you to create a special webpage devoted exclusively to your property.  This is a very cost-effective way to give buyers a lot of information about your property.  I operate several FSBO websites in Northern California, including FSBOSonoma.com, FSBOSolano.com, FSBONapa.com, FSBOAlameda.com, FSBOContraCosta.com,   FSBOSac.com, FSBOSanMateo.com, and FSBOSantaClara.com

Postlets.com will let you post information for free on these online classified ad services: Craigslist.org, backpage.com, livedeal.com, base.google.com, oodle.com, trulia.com, and propsmart.com. 

FSBO directories are a good place to advertise any price breaks you’re willing to give buyers who aren’t working with buyers’ agents. For example, if you’re offering a 2.5% commission on a $600,000 house, you might add this line to your ads: “Buyers without agents take $15,000 off.”

Don’t, however, put this line on your flyers, signs, or anywhere a traditional buyer who is visiting your home with an agent can find it. If you do, buyers’ agents will be reluctant to show your home to their clients.

Finally, always give your property address when you post an ad--even if it’s occupied by tenants. Experienced buyers will want to research your property online and drive by it before they call you. Concealing the property address creates an obstacle for buyers and discourages them for seeing your property.

Classified ads

I think it only makes sense to run newspaper ads in a hot market.  It's simply too expensive to run these ads month after month. 

If you do run a classified ad, it should contain at least the following information:

• Price

• Town or property address

• Number of bedrooms

• "by owner"

• Your phone number

• One or two key selling points

• The address of a webpage devoted to the property, if you've set one up.

Here's an example:

I think it's most cost-effective to run classified ads just on Fridays, Saturdays, and Sundays.  

Many newspapers also have a special boxed section in their real estate ads for open houses.  Here's an example:

Don't waste your money on an open house ad if you expect there to be other open houses nearby.  Just put your signs near the others.
 

Fair Housing Laws

Make sure that your ads don't break Fair Housing Laws, which prohibit you from discriminating against buyers based on race, color, national origin, religion, sex, familial status, and handicap.  Avoid, for example, saying things like "Nice Hispanic neighborhood," or "A great home for a young couple," or "Good Christian home."  A good rule of thumb is to describe just the property, not the sort of person you think might want to live there.  Click here for a pdf-formatted set of advertising guidelines put out by HUD in 1995. 

MLS listings

Listing your property on the Multiple Listing Service (MLS) gets you on Realtor.com, a national website that gets over 6 million visitors per month, and assures buyers’ agents that you will “cooperate” (pay them a commission) if they bring you a buyer who closes escrow.

In the past, you had to list your property with a full-service listing agent in order to get on the MLS, but no more. It’s now possible to get an MLS listing for a low flat fee.  To find a flat-fee MLS broker, look in my resources section or type "MLS flat-fee broker" plus your state (e.g., "California") as search terms on an Internet browser.  You should find one who will list your property for about $200 to $400.

Here are the terms you should insist on from your flat-fee broker:

• An Open Listing or an Exclusive Agency Listing with a cancellation clause

Both of these contracts allow you to find a buyer on your own without paying a commission. You can revoke an Open Listing Agreement at any time. Adding a cancellation clause to an Exclusive Agency Listing also allows you to get out of it whenever you want. Don’t sign a listing agreement unless it’s a standard contract.

• A promise to forward buyer inquiries to you

The Realtor Associations who manage the various MLSs usually won’t allow sellers’ names and phone numbers to be displayed on Realtor.com or other public websites. Buyers are only allowed to see the flat-fee broker’s contact information. Some flat-fee brokers take advantage of this--when they get inquiries, their goal is to capture the buyer’s agent’s commission for themselves. Choose a flat-fee broker who will give your phone number to buyers who call about your property. This gives the buyer the option of buying your home without a buyer’s agent if they wish.

• Posting on the proper MLS

Make sure your flat-fee broker promises to put your listing on the appropriate MLS for your county or region. If a broker lists you on an out-of-area MLS, you’ll get very few responses from local buyers’ agents.

• The ability to rent a SUPRA electronic lockbox

Licensed agents have special keys that allow them to open these lockboxes to get keys to homes that are on the market. Many flat-fee brokers don’t carry these lockboxes. If you list with them, you won’t be able to rent an electronic lockbox, since MLS rules often dictate that you can only rent a lockbox from the broker who lists your property.

• Assurance that your listing will appear on secondary MLS real estate websites

Examples include Realtor.com, GreatHomes.org, BayEast.org, and EBRDI.com. Getting on these websites increases your home’s exposure.

• The ability to make changes to your listing

Flat-fee brokers usually allow this, but some charge a fee for each change. You should be able to request up to five changes without paying a fee.

• Willingness to post multiple photos

Make sure your MLS broker is willing to post multiple photos on Realtor.com and secondary websites.

• Willingness to verify information and offer advice

A good broker will start the listing by accessing tax records, then interview you about the property. This gives the broker an opportunity to warn you if, say, your estimate of the square footage is off or you’re making a risky claim about your home (e.g., “quiet, crime-free neighborhood”).

• Speedy service

Before signing up, ask the broker how long it will take to get your listing.  It should take one or two days at most.  A friend of mine had to wait several weeks before her flat-fee broker put her listing on the MLS.

Some tips:

• You can only get a listing if you're cooperating with buyers' agents.  Though you needn't pay the standard 2.5-3% commission, I recommend you do so.  If you specify a low commission, the agent may find ways to sabotage the deal.  
• Let the MLS Broker know immediately if you've accepted an offer or if you've taken your house off the market, so the broker can change the status of your listing.  To ensure that its listings are up to date, MLS systems often impose stiff fines on brokers who don't immediately report changes.  

Flat-fee brokers must use their own names and phone numbers as contacts on Realtor.com, and they can't write anything in the Remarks section that will let buyers know that the listing is a FSBO. The only way for buyers to get in touch with you directly is if they drive to your address and pick up a flyer.

If you later decide to list with a full-service real estate agent, you'll need to cancel your contract with the flat fee MLS broker.

Flyers

Here are some tips for creating and distributing flyers:

• Don't put too much information on your flyer.  I prefer a flyer that's printed on just one side of a sheet of white paper. 
• Be sure to put your phone number and fax number on the flyer.  Buyers often send offers by fax.
• Some people put black and white flyers in the brochure box outside and hand out color flyers to people who come inside.  I don't recommend this.  Use color flyers--they do a much better job of selling a home.
• Keep the brochure box filled with flyers at all times.  As a buyer, I often drive through neighborhoods looking for houses for sale.  If I don't have a flyer for a house, it sometimes slips my mind.   
• Include driving directions to your house in the flyer.
• If you're cooperating with buyers' agents, leave lots of color copies of your flyer at nearby real estate offices. 

FSBO websites often allow you to create flyers using the information you used to create a web page for your home.  Otherwise, you can create good flyers using Microsoft Publisher or another similar program.

Just as peacocks display their vigor with elaborate plumage, you'll want to display your seriousness as a seller with quality marketing materials.

FSBO websites

A lot of specialty websites have emerged over the past few years to help FSBO sellers market their properties.  Most offer these services:

• Lets you create a webpage and downloadable flyer for your property by filling out an online form.
• Lends you signs, a brochure box, and a lockbox.

Resources

• Some owners don't understand presentation

Next topic:  Selling

©Lori Alden, 2008.  All rights reserved.