Here's why: A price that is "too low" will result in a "net" that is thousands less than they could have gotten with a little research. A price that is "too high" will cause the house to stay on the market for a longer period of time and quite possibly...never sell!

Not selling means paying more mortgage payments, taxes and, insurance until the FSBO lowers the asking price to what the market may have supported in the first place. In addition, if the house sits on the market for too long it will get "Shopworn". The FSBO will get discouraged and think about giving up altogether.

You've probably already been confronted with some of these classic FSBO pricing philosophies:

1. What they paid for the house originally plus some magical percentage they read about in the local newspaper. The price could be higher or lower depending on what the market is doing.

2. What their neighbor "told them" he paid for his house. People tend to exaggerate when they are talking about what a "deal" they got. It makes them feel better...but honestly, misinformation doesn't help price a house.

3. What other houses in their neighborhood are currently "sitting" on the market for. A lot of other houses sit on the market because their asking price is too high or there is some other problem that is preventing the sale. Asking prices and getting prices are two separate things.

4. What their "Tax Assessment" shows, plus some "rule of thumb" percentage. Tax Assessments are much different than true "market value" of a house. Don't even let your FSBO go there.

5. What they "need" because of some personal circumstances. Buyers don't care about what a FSBO "needs" to get out of the deal. They will only pay what the property is worth to them.

6. A CMA (Comparative Market Analysis) prepared by Aunt Martha who is a Realtor/Agent. Yes, this is the best method on our list thus far. But today, CMA's are expressed in "price ranges" and not absolutes. Providing an estimated price of plus or minus 10% just isn't good enough for your FSBO.

As Mortgage Professionals, we all know the only way to determine the correct price for a house is what comparable houses have recently sold for and been recorded for. (i.e., houses nearby and similar to this one that have recorded sales prices at the courthouse).

The sale prices that are recorded are the prices the local real estate market will bear in connection with this house. There is no other reliable benchmark with which to base a good pricing decision.

That's it...end of story! No magic answers, and no exceptions to the rule. The price that your FSBO will receive for his/her house is going to be about what others have gotten in the recent past for similar properties. Without a doubt, a full blown appraisal done by a Certified Real Estate Appraiser is the best way for arriving at a price to sell your house.

A full appraisal involves a property inspection by the appraiser. He will look for defects and benefits and will complete written report with pictures of your house and the houses used as comparisons.

Here are a few advantages to your FSBO of using an appraisal:

1. They have irrefutable evidence as to how they arrived at their price. They have in their hands a written appraisal complete with pictures, measurements, and, information on their house and on comparable sales.

The FSBO will have this report to show everyone who comes to look at your house. Every buyer will see in black and white the appraised value of the house as arrived at by a professional appraiser.

2. Buyers will feel more assurance that they are not paying too much for the house if they decide to buy. Often, buyers get "Buyer's Remorse" because they feel there are still some unknown variables in the transaction.

The number one concern a buyer has, other than the structural soundness of the house, is that they are paying too much for the house and being ripped off. Having an appraisal helps set their minds at ease and makes negotiations easier on everyone.

3. A written appraisal gives the FSBO some piece of mind and assurance that their asking price for the house is right where it should be. Now they have the facts when they are faced with a "Bargain Hunter" who is trying to steal their house at the lowest possible price and at the most favorable terms for himself.

OK...As a Mortgage Professional, here's your opportunity to step-up to the plate and help your FSBO with the pricing of their house. The following may help you...

For many years I have had an agreement with Bill that does a lot of appraisals for me. When my FSBO agrees, I have Bill do an abbreviated appraisal to set the value of the property and to give the owner documentation that shows that value.

Since this is less than a full appraisal he will do these for me all day long (and very quickly) for a heavily discounted rate that we previously negotiated. When the house sells and I originate the mortgage, Bill knows I will use him for the "buyers" full appraisal. Bill then charges his normal everyday full price.

So, the result is this...Bill gets additional business...I get fast response so that I can quickly help set the selling price of the FSBO property and impress the FSBO...and, the FSBO gets to sleep well at night knowing that their asking price is totally accurate. This is a win-win-win situation for everyone!

Establishing yourself as a FSBO expert and profiting from it, is not difficult to do. By solving and working through the problems that all FSBOs experience is an important first step. Providing

good advice and solutions to those problems and then presenting your information, sets you apart from the majority of mortgage folks.

By helping a FSBO succeed you also help yourself and definitely help fill your Mortgage Pipeline.