FSBO

Did you know that home owners not using a Realtor to help sell there property miss out on about $45,000
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October 12 2010 - US
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yep thats sounds about right. 

Also alot of FSBO's waste alot of time with unqualified buyers.  As most home owners, cant check a buyers credit or get thier tax returns.  So many of my listings were FSBO's and i have heard horror stories. 
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October 12 2010
Profile picture for rockinblu
Total BS on both of the previous posts. Show me the facts. Give me some statistics from an unbiased source regarding agent represented properties of the same ilk netting more to the seller, than those sold by owner.
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October 12 2010
What?! Please provide solid evidence of this 45k figure. 

It may be tough to be a fsbo these days (lets face it, its tough to list, period)  but many sellers are perfectly capable of educating themselves on the process and doing just fine if they are willing to put in the effort.

For example, owners are just as capable of asking for a buyer's credit or preapproval as agents are, can pay a flat fee agent to list on the mls, can offer a commission to the buyer's agent, can educate themselves on necessary paperwork, hire an RE attorney, and so on.

Making blanket statements and gross generalizations isn't doing anybody a favor.
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October 12 2010
I would say it's fairly irresponsible to call oneself a professional and then spew out statistics without supporting documentation that are tantamount to fear tactics. It's in our best interest to provide realistic expectations of what an agent can and cannot do, not post nonsense.
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October 12 2010
I think that lots of agents/brokers think way too much of themselves to give proper respect to FSBO sellers.  Most FSBO sellers that I have had the pleasure to meet have done their homework, know the market and are not shy about the buyer qualification or contract process.  FSBO sellers do find however that is difficult to to show their home if they are working full time.  The FSBO downside I've found is that buyers are hesitant to start the process and make an offer to a FSBO.  They don't want to insult the owner and yet don't want to pay full price - especially in this market. My experience has shown that buyers are a lot quicker to "jump" into the offer and buying process with a FSBO if they have an agent involved and they feel they have a cushion of protection and a source of advice.  I have executed many deals where I was representing the buyer and the seller was a FSBO. 
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October 12 2010
Profile picture for SoCal Engr
Let's even assume the $45K figure is "correct"...

$45K on what transaction figure? $125K? $450K? $1.2M?

    Does that $45K factor in the 3-6% commissions that are not paid?

Your post does a great disservice to yourself, your profession, and other REAs. If you're going to post this type of info, back it up and put it in context.
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October 12 2010
I give up trying to defend our industry with statements like this.
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October 12 2010
OK, if you google that statement there is empirical proof that homeowners lose $45,000 on the sale of their home when they don't use a Realtor.

Go to Google documents and you will find the proof there.

It's written plain as day on the back of a cocktail napkin.

OK, I really did google that statement and came up with nothing. No attribution from any source that could be verified over the internet.

I got nothing.
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October 12 2010
Wait, I just found the evidence on this tissue I've been carrying around.  Too bad I just used it.
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October 12 2010
Profile picture for rockinblu
The OP's post and the next following reply almost seems as though it makes agents look like one will lie and the other will swear to it. Thank goodness some responsible agents came to the rescue.

@Myesha and Steven
Here's some reading for the two of you>>>>>
http://rockinblu-rockinblu.blogspot.com/2010/08/what-am-i-missing-here.html
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October 12 2010
I just read stuff like this and cringe.................

How does anyone expect to be taken seriously when making grandiose statements that have no basis in fact.

The word "OY" comes to mind, as I sit here shaking my head.
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October 12 2010
As a real estate agent this sounds like a bs # how do you come up with that number? Having said that good luck selling your home fsbo in this market. Only 2% of fsbo actually sell.
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October 12 2010

You want to take this Rockinblu?  It's all yours.

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October 12 2010
just when you think it can't get any more absurd.................
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October 12 2010
Profile picture for Pasadenan
The only way I could come up with that number is that is how much Myesha lost out on on a $1.5 Million recent FSBO sale that they had "hoped" to have the listing on.  Either that, or she really believes the seller of a $750k home puts in $45k of "labor" to make the sale, and thus she is talking about the seller's time.

Well, since the seller didn't quit their job to make the sale, if their time was worth $45k, them must be in the top 1% earning bracket in the country.

In Beaumont TX where Myesha works, according to the Zillow local info pages, the amount that agents are able to get off the list price is about 5% to 7%, which is about typical for the nation.  Typically not even enough off to cover their commissions.  And since these numbers seem to be accepted by both the listing agent and the selling agent, it just means that the list price is intentionally inflated as a marketing gimmick.


But then on the other hand, this made up number seems to go right along with the 90% number that NAR spokes people made up about FSBO that was shown to be a complete farce.

The FSBO NAR farce discussion thread
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October 12 2010
Profile picture for Dunes....
People who do FSBO's also get smaller Brownies/Cookies at Starbucks (I've seen it with my own eyes)

FSBO's also pay an average of 99 % more for Yardwork cause they's pretty dumb about money and stuff...scientific fact jack!

Stupid FSBO's!
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October 12 2010
Profile picture for the_country_hick
If it is a $350,000 house for sale that sounds about right. The money they lose out on is the money they keep in their pocket instead of in the realtors pocket. 6% x 350k= just about $45,000.

Did you ever look at how much money someone listing a house with a realtor leaves behind due to commissions?

It sounds like I could fsbo a $350k house selling it for $310k and still be ahead of using a realtor doesn't it?
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October 12 2010
Interesting . . . Wonder how close it is to being true???
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October 12 2010
Not even close Sarah. I'm calling shenanigans on this post and others like it. This sort of made up nonsense devalues any skills and talents agents bring to the table. We have to provide data and quality in order to be taken seriously.
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October 12 2010
Profile picture for rockinblu

 " good luck selling your home fsbo in this market. Only 2% of fsbo actually sell."
 ~~~~~~~~~~~~~~~~~~~
Probably more unsubstantiated BS.

Saul, what market are you referring to? Yours, or the market in general? If it's just yours, care to share with us some actual references to substantiate your post?

If you mean the market in general, going by the NAR's own statistics 20% of the market in 2009 was comprised of sellers who chose not to use a full service agent. Nine percent of sellers chose limited services, which may include a discount brokerage, and 11 percent used minimal service, by simply listing a property on a multiple listing service. Granted, that 20% aren't recognized as FSBOs by the NAR, but try to tell that 11% that they aren't FSBOs.

If you're stating that 98% of FSBOs fail, that means that the 2% that succeeded represented at least 11% of the total sales. That would mean that the total number of those starting out as FSBOs would have been over five times all the sales, full service and whatever. If you mean 98% fail that aren't on the MLS, do you actually waste your time driving around looking for FSBO signs, and monitoring the failure rate? Give me a break.

You may get by with posting BS on other sites, but it's not going to happen here without being challenged.

BTW, welcome to Zillow.........I think.

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October 12 2010
Profile picture for Alan May
so, does that work conversely... ?   Anyone selling WITH a Realtor GAINS $45,000!?

C'mon, where on earth are you going to find statistic to match that.... and agreed... at what price...
    $100,000 listing selling for $145,000 (minus commish, of course).
or
   $1,000,000 listing selling for $1,045,000 (minus a huge commish, of courser).

Myesha, Myesha, Myesha.
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October 12 2010
Profile picture for rockinblu
For basically agreeing:

Steven, Steven, Steven.
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October 12 2010
I bet it's moments like this that some agents wish zillow had a "delete" button for entire threads. I wish they did, too.

Rock - what nerve - using actual stats and numbers and stuff!

Dunes - I heard fsbos, on average, buy more Girl Scout cookies, too.......they are home waiting for buyers to come, so they are there to answer the door when Girl Scouts come ringing.

Tiff - I love the "shenanigans" designation.....may I borrow it from time to time?
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October 12 2010
Profile picture for Dunes....
37% of RE Agents are wearing their left shoe on the right foot and the right shoe on the left foot at his very moment

Source...NAR Profile of Shoe Wearing Agents (Would provide a link but it's all Secret Data stuff)

So since we know only 2% of FSBOs sold, they lost out on $45,000 and were wasting their time...I have a Question.

What % of Properties Listed with a Realtor sell during their Original Listing Period/Time Frame...
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October 12 2010
Profile picture for sunnyview
Some FSBO's don't have a realistic idea about their initial price, but the market tells them pretty quickly if their price if completely wrong. The FSBO's that want to sell are generally in the ballpark even to start with because they have done some legwork before they put their house up for sale.

In my area, there are agents who sit on overpriced houses literally for years. They "buy" the listing with a high CMA, put it on the market and then it sits and sits. Many times the first price reduction doesn't happen for over 6 months in a market with an average sales time of about 70 days.

If they were FSBO houses, people would say that they were crazy amateurs, but for some reason people keep listing with them. They must bewitch the sellers or use a magic potion or something. Puzzling...
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October 12 2010
First, there are too many unknown variables.  It seems nearly impossible to identify and track FSBO statistics.  For example, there are variations of FSBO with sales directly by owner, sales with marketing by FSBO companies, and sales via MLS-only or limited service options available from discount real estate brokerages. What constitues a Fsbo? this question is key because other wise we are comparing apples to oranges. If if a person starts selling his home as a fsbo but ends up selling their home with the help of a realtor in which he only pays a limited commision, are you still considering him a successful fsbo? What about fsbo that end up using a limited services agency are they considered fsbo also? Many fsbo are willing to pay a commision to a agent if they bring in a buyer, but again is this trully a succesful fsbo?

Here is a link from realtors.com that hopefully sheds some light..
http://www.realtor.org/press_room/news_releases/2010/07/letter_wausau
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October 12 2010
Debbie:

Sure, but it's actually a South Park reference, and I'm sure they took it from elsewhere. I try to sprinkle in my not-so-funny humor to keep myself laughing.
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October 12 2010
Profile picture for Dunes....
First the Article referenced by Saul refers to a "Study"..
The 2009 Profile of Home Buyers and Sellers

But on the Same Site (Realtor.org) we can see the Profile is NOT a "Study" at all....It is a "SURVEY"

"NAR mailed an eight-page questionnaire in July 2009 to a national sample of 120,038 home buyers and sellers who purchased their homes between July 2008 and June 2009, according to county records. It generated 9,138 usable responses; the adjusted response rate was 7.9 percent. All information is characteristic of the 12-month period ending in June 2009 with the exception of income data, which are for 2008. Because of rounding and omissions for space, percentage distributions for some findings may not add up to 100 percent." Link

A Survey with a Response rate of 7.9%...
Perhaps Some Agents wish to hang their Hat on this kind of "Study" but I'm thinking most people/consumers who see the actual source or methodology used by NAR to come up with these numbers will consider them unworthy of much real consideration....Let alone what they'll think of those who attempt to use them as if they were from some legitimate "Study" or actual breakdown of Data...

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October 12 2010
Profile picture for rockinblu
"Only 2% of fsbo actually sell."
 
" It seems nearly impossible to identify and track FSBO statistics."

Those are quotes from Saul.

Nuff said.
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October 12 2010
Profile picture for SoCal Engr
"Many fsbo are willing to pay a commision to a agent if they bring in a buyer, but again is this trully a succesful fsbo?"

Had this been listed by an REA and then sold to a buyer represented by an REA, then the listing REA is considered "successful", no?

Since "FSBO" is "For Sale by Owner", then it seems fair game (and smart) if the owner doing the selling is willing to provide a cut to a REA who will bring in a buyer.

So, "yes, this is a successful FSBO".
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October 12 2010
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