Really, why shouldn’t sellers try FSBO: For Sale by Owner?

Today,’s real estate blogger asks, “Really, why shouldn’t sellers wait for higher prices?”  We’ve reframed the question to propose an option which may be more profitable: “Why shouldn’t sellers try For Sale by Owner?  Last week, Yale economist Robert Shiller told DAVOS,  “It’s a good time to buy if nothing bad happens.”  Isn’t the the correllary equally true, “it’s a good time to SELL if nothing bad happens?  What bad might happen from a seller’s perspective, and how might selling NOW net more profit than waiting?


1.  Record low interest rates, which have artificially increased purchasing power, begin to rise and the uptick of housing prices, (also exaggerated) begins to go sideways or fall, as economist Mark Hanson told the Wall Street Journal:

[Hanson] disputes the idea that the housing market has entered a sustainable recovery.

“When interest rates fall suddenly, it enables the 72% of buyers who get a mortgage to pay 15% more for the same house on flat income,” he said in an interview. “So in a perfect world, prices should be up 10% just because of the rate benefit.”

Now, he says, the housing market faces a “wall of headwinds” due to interest rates that can’t go much lower, rising taxes, and mortgage modifications that are re-defaulting. “We had a good year in 2012 and we’re going to have a worse year in 2013,” said Mr. Hanson.

Hanson predicts housing prices will fall by 4% in 2013; and Gary Shilling, the former chief economist at Merrill Lynch,

“predicts that prices will fall by 6%, erasing all of the gains of 2012. Mr. Shilling is forecasting additional declines through 2016 and predicts that prices will be nearly 12% below current levels by 2017.”


2.  Tomorrow, Ground Hog Day, Punxsutawney Phil predicts 10 more weeks of winter (like 2010), rather than last year’s mini-winter in 2012, the warmest on record.  As a result buyers and sellers are BOTH frozen out of the market, and housing prices flatten by comparison to 2012.

3.  Tens of thousands of overeager homebuyers who overpaid in 2012 are out of the market, leaving more patient buyers who refrain from engaging in bidding wars.  Housing prices flatten, as pent up demand falls and prudence prevents costly mistakes.  

4.  Creamed out of the market in 2012, ALL CASH, cash rich buyers, and two-income households make up a shrinking pool of homebuyers.  Fewer households qualify for mortgages, pulling down purchasing power and reversing price appreciation.

5.  Anticipating a rise in prices, homeowners take their listing agent’s advice and over-improve their home, causing them to sit on the market and net less profit, both because of carrying costs and price reductions.  

6.  After shocks of fiscal cliff and ongoing gridlock in Washington cause a cloud to hover over the housing market, and homebuyers go back into holding pattern, fearing, like Robert Shiller

“It’s a very abnormal market. There’s a lot of uncertainty going forward.


7.  Exposing a win-win solution to the “low inventory” and expired listing blues, new tools allow DIY homebuyers and FSBOs to connect outside the MLS, empowering sellers to NET MORE PROFIT rather than waiting for prices to rise and giving traditional listings agents 5-6% of their precious home equity.  

If you’re a DIY homebuyer and would like to know more about The Real Estate Cafe‘s “proactive househunting” techniques, let’s meet OFFLINE for coffee.  If you’re a homeowner who MIGHT consider selling “for sale by owner” or with limited assistance, please check out our course description FSBOs on Steriods and contact us for a private DEMO.

Posted in Bidding wars, Discount real estate, DIY Homebuyers, Do-it-yourself, Expired listings, Fee-for-service, Fiscal cliff, FSBO: For Sale By Owner, Housing forecasts, Price trends, Proactive househunting

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