Profile picture for realestatelearner

What am I missing about this seemingly win-win FSBO situation?

I own a $400,000 home and want to list it on fsbo.com or something similar, because the realtors in this area will not accept less than 7% commission.

Here's my strategy- it seems like it would be a win-win for everyone:

Buy a package that includes local MLS and Realtor.com exposure. Offer the buyer's agent a whopping 4% commission as a huge enticement to get a buyer, since I always hear that buyer agents don't like the zero or low commissions on FSBO properties.

I have the ability to easily shoot and Photoshop my own photos, and in my state, an attorney is required for real estate matters even if a realtor is used, so he could help guide us through all the other details for maybe an extra session or two.

I am happy to make my own brochures and do my own showings to save nearly 3% on a $400,000 property.

I am confident I can price it correctly based on using realtor.com data, trulia and zillow data.

What am I missing? It seems like a win-win for everyone!
  • September 10 2010 - US
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (17)

Speaking up for the OP and other fsbo's, as I have stated, it is not a process to be entered into lightly but anyone who is motivated enough is capable of selling their house as long as they are educated on the process and go into it with their eyes wide open.

Regarding the marketing nonsense, the vast majority of houses are sold through the mls and realestatelearner has already stated that is what they are planning on doing.  I haven't known of heard of one house being sold through a flyer, color or otherwise. 
As a side note realestatelearner, Craig's list may be worth looking into.  I've heard of some people having success with that.

The OP also stated that an attorney will be involved.

Frankly, and embarrassingly, most agents take sucky pictures.  Being a realtor is certainly no guarantee of quality.

Realestatelearner also stated that a competitive buyer's agents'  commission will be offered.

Are there disadvantages of going fsbo?
Of course.  Those have already been stated.
The obvious disadvantage with going with an agent in the OP's market is apparently paying out $28,000 in commission on a 400k house.  Ouch!
Even during good times, the commission hurts. 
And for sellers these days, these are definitely not good times.
  • September 17 2010
  • 3Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for BrianBeatty07
When I first got into the business I worked with almost all For Sale By Owners and had tremendous success in selling their homes.  I was not overly pushy and allowed them the time they needed to market their home on their own.  They came back to me because of the following reasons:

1) They found that the Buyers that search for FSBO properties typically want a DEAL.  Paying top dollar for a FSBO is rare and doesn't coincide with the mentality of the Buyer searching for that property.

2) There is absolutely no way you as a FSBO can generate as much online traffic, showings, and ultimately, offers, as a Realtor can.  If you were to sign up for all of the Websites that our Companies automatically market on because of the relationships between our Parent Company (in my case Weichert, Realtors) and the dozens of other websites we market on you'd lose money on your transaction.  95% of Buyers are represented by an Agent in a purchase so you have to put your property in front of Buyers AND Agents.

3) In this market, a Buyer will look for any reason to "sue" you.  I've never seen anything like it.  Whenever the slightest thing goes wrong in a transaction these days everyone flips out, calls the Broker-in-Charge, notifies the Board of Realtors, contacts an Attorney - it's ridiculous.  Make sure that you're backed by a competent Professional (Realtor and/or Attorney) so that you don't get caught up in one of these situations.

4) Buyer's Agents are not protecting themselves like they should be by charging their Buyer 3% (or whatever the customary co-broke is in that area).  The majority of Buyer's Agents elect to get "paid out of the transaction by the cooperating Broker."  If a Buyer that has been working with a Buyer's Agent purchases a FSBO many times the Realtor cannot rightfully collect a commission because either the FSBO didn't agree to pay the Broker or the Broker didn't charge the Buyer in the first place.  This creates a lot of tension between an Agent and a Buyer and, unfortunately for you, means they are likely going to do whatever it takes to steer their Buyers away from you.

5) Lastly, Sellers really don't want to pay to market their home.  Putting the property in the newspaper can be effective if you have the Cadillac of FSBO ad's in your paper each week consistently until the property sells.  Putting it in there a few times is nothing more than a waste of money.  Print PROFESSIONAL flyers - not something in black and white you created using Microsoft Word.  Post Directional Signs in your neighborhood to guide traffic.  Select a few top-rated websites and market your property on there to capture Buyers that are relocating to your area.

I could go on and on but the bottom line is there are Realtors out there that are worth the commission.  If you choose to go the FSBO route make sure you've spoken with an Attorney first to insure you're representing the property correctly and have provided potential Buyers with the legal documents needed to complete a transaction. 

Brian Beatty
www.ListingsinCharleston.com

  • September 17 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Hello Realestatelearner,

Selling For-Sale-By-Owner can certainly work to save you money.  If you are located in an active market, you have a better chance of success.  If you are in a slow market, be prepared to compete with other properties - yours will have to stand out.

Disadvantages include but are not limited to:

- Marketing:  Gaining access to the sites that will get you top exposure
- Staging and photos:  It sounds like you have strong photography taking and editing skills.  But do you know what to photograph in order to make buyers want a second look?  Which photos will be the "money shost" - the ones that make buyers say, "oooh?"
- Showing:  Being available to open your home to buyers when *they* want to see it
- Navigating an offer:  Do you have legal counsel to review an offer with you before you accept it?
- Assessing a buyer:  Sure, a buyer may want to purchase your home, but are they actually able to do so?  Are you able to find out?
- Negoiating:  These days, the negotiating does not end with the acceptance of an offer.  Be ready to negotiate after the home inspection, as well as on issues of buyer financing, timelines, and issues that arise on the final walk-through.
- State-mandated requirements:  Each state has its own requirments of sellers.  In MA, for example, sellers are responsible for having the fire department do a smoker and carbon monoxide detector certification.  Ask you attorney what is required of sellers.

If you absolutely do not want to hire a real estate agent to help you with all of this, please promise me that you will get a strong real estate attorney to guide you.  Good luck.
  • September 17 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for realestatelearner
Well, I've interviewed over 6 realtors and none will take less than 7%. We live in a resort-like area, and I guess that's why.

I understand the comment about FSBO buyers wanting to low ball me because they know I'm not paying full commission, but I can incorporate that factor into my FSBP asking price, just as regular sellers incorporate the 7% or 6% commission into their asking price, right?
  • September 16 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for tricerealtor22
2.5-3% is common here!
  • September 16 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

In this tough market make sure you get your calls when they come in or return them asap.  If you do not have the flexibility to answer or return calls quickly then Hire someone that can.  There is a lot more advertisement and connections an established Realtor will have with other associates.  If you're offering 4% already and you want to pay another 1K to place it with local mls, why not pay the other 2.7%, I think a professional firm will make up the difference.

  • September 15 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Make sure you have comparable properties to look at. How do you know what your home is worth? if the price it right it will sell. Don't you think that you are spending a lot of time and money to make a profit. You need a realtor I understand you can do it all yourself but, you dont want a lawsuirt from the Deceptive Trade Practice Act. Make sure your ads are good and none-discrimatory.
  • September 14 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Sheryl is correct. Buyers equate FSBO with bargain. They expect the price to be lower than market value. I'm not sure why Realtors in your area won't work for less than 7%. I'm lucky to get 6 in my market. The average is less than 6. The 4% would be attractive to buyer's agents but you'll get more calls from listing agents than you will buyer's agents. Save yourself a lot of headaches and hire the right agent to sell the home. You'll come out ahead or at the very least even with your FSBO method.
  • September 13 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

To increase the number of potential buyers to your property I recommend several 'open house' days, preferably Saturday and that you offer 'Owner Financing.'  
  • September 10 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for rockinblu
Hi realestatelearner, and certainly Joan as well.

Realestatelearner, if you've got the rest of the night and a cold six pack, you might be able to get through this....... maybe coffee would be better to keep you awake. zzzzzzz 
  • September 10 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Dunes....
  • September 10 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for wetdawgs
Here's the famous Rockinblu blog link.
  • September 10 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Pro's-
1.  You should save money on commission
2.  You are in control of your own listing


Con's
1.  Alot of agents will not show your house.  Why?  Fear of doing both sides of the transaction for half the commission.  Fear that somehow their buyer will strike a deal with the seller and leave the agent out completely (it happens).  Fear that the seller is inexperienced and it will be a long touch transaction.
2.  People knocking on your door whenever to ask you questions.  If it is listed with an agent, they know they have to call the agent for info.
3.  Fielding calls and having showings from unqualified buyers
4.  Not being affiliated with an agency may not bring you in buyers.  Agents in offices will talk about their listings and hopefully be able to find buyers within their office
5.  Losing valuable marketing time by not starting with a Realtor in the first place.
6.  Cost of ads and flyers...Obviously not totalling the money you would be saving by selling it on your own, but it is an upfront cost that may prove as a waste of money

I would suggest you stop by agencies with flyers and invite them to your home for a preview. 
I wish you lots of luck...it definately works for some homes!!
  • September 10 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

One thing that I just remembered:  buyers expectations for a fsbo will often cut into your savings.
Buyers understand that people go into a fsbo with the intention of saving money and have an expectation (rightly or wrongly) that the savings will be shared.

Just something to keep in mind.

  • September 10 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I was trying to find rock's blog on Trulia but I think he has broken it up in pieces.  I know he has provided the link to it on this site many times but I can't find it.

Anyway, cons regarding a fsbo is:
 The amount of work.  It is, in spite of what many agents say, absolutely doable, but it is work and takes a certain amount of dedication and education.
Selling a house these days in such a tough market (although admittedly I don't know your market) is an uphill battle for most and that hill is maybe a bit steeper for fsbos.  Again, its doable but you need to have reasonable expections regarding price, showings and making it clear to the buyers' agents that you are educated on the process and know what you are doing.  Buyers' agents are often a bit fearful about fsbos because they feel, sometimes justifiably, that they will end up doing the work on both ends. If you can somehow communicate and advertise that that is not the case, it should help you.

I have often likened having an agent to a general contractor.  Most people, even those without experience, are certainly capable of being the general contractor on their home building/renovation and the extra work involved is definitely worth the savings to some.
However, some would prefer to pay to leave it in the hands of people who do it for a living and therefore, take some of the stress out of what is already a stressful process.

It is simply a matter of preference and priority.  Don't let any one dissuade you from doing it if you feel you have a realistic idea of what is entailed.

Remember, pricing is king, the absolutely most important thing.  Condition of the house and the way it is presented on the mls is probably second.
Accessibility, commission to the buyer's agent and a good RE lawyer are also extremely important.

Somehow, somewhere make sure you get a hold of his blog because he says everything I said (and much, much more), only better. 
  • September 10 2010
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for realestatelearner

I guess I should clarify- what would be the disadvantages of this idea?

I would appreciate some realtor input as well.

Thanks.

  • September 10 2010
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

It doesn't sound like your are missing anything except for rockinblu's blog, which (I'm sorry Rock), I haven't bookmarked but usually he will stop by at the mention of a fsbo and hopefully give you the link.

Its well worth the read.

If he hasn't stopped by with the link sometime tonight I will try to remember to come back with it later.
  • September 10 2010
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.