Is buying a home like buying an airline ticket online?

There’s been a lot of press lately by people unhappy with the fact that they just can’t seem to buy a home on the internet the same way they can buy a seat on an airplane or shares of stock in a company.

But these transactions aren’t really the same, are they?

You’re only going to "live" in an airline seat for a few hours, while most people will live in a home for at least 6 years. Hopefully you won’t be paying for that airline seat with a 30-year loan either, nor will you require a physical inspection of the seat before you take occupancy.

What if you have a really lousy neighbor who smells bad and makes a lot of noise? With a home, you’ll hopefully discover that during the inspection process. With an airline seat, unfortunately you’re stuck!

A couple of shares of stock costing $100 or so certainly can’t compare to the investment in a home costing $600,000 or more either. And of course you don’t have to worry about what schools the airline seat or the stock will need to attend either.

There’s absolutely nothing stopping sellers from selling by owner, either locally or on the internet. In fact, there are plenty of websites to help them do so.

The challenge is that the average consumer (i.e. home seller) does not have the resources that a professional like a Realtor will have to market their home effectively. Nor will anyone in their right mind work for free to sell someone else’s house, so if the seller is not wanting to offer some payment in return for bringing a buyer they won’t attract Realtors with willing-and-able buyers to their doorstep.

Therein lies the dilemma: As a tech-savvy Realtor focusing on the internet as one of my primary advertising methods, I spend more than you’d imagine on internet-related advertising costs every month as well as many hours per day making sure that this blog, as well as my other sites, are constantly updated.

The average FSBO seller will expect to spend $100 or so to get some signs at the local Home Depot, throw up a few words on Craig’s List, and hope that their home is sold within a few days.

In prior years, when the Santa Clarita Real estate market was so hot that buyers were anxiously competing for only a few available homes, this was certainly possible. But now the market has completely changed: There are more homes to choose from, buyers are less anxious to buy, and more buyers have "issues" (meaning that they can’t easily close a loan) than in prior years as well.

So rather than saying that they’ll buy a home at pretty much any price just so they’ll have a place to live, buyers are now back to wondering why they should pay full asking price for a home for sale by owner when they know that the sellers are saving a bundle by selling themselves. They’re looking at FSBO’s for a bargain, not because they prefer to avoid Realtors at all costs.

Studies show that homes sold by owner almost always net out less cash than those sold by Realtors because of this "bargain-hunting" phenomenon. If the buyer is going to pay at least 6% less than market price for your FSBO offering anyways, why in the world would you not want to pass off most of the costs and effort of getting your home sold to someone else? Well, unless of course you enjoy holding open houses and dealing with whacko buyers… I could tell some hair-raising stories about whacko buyers and their equally crazy lenders, but that would be another lengthy post…

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