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What some people don't realize about FSBO

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CashRightAway

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I am amazed at FSBO Buyers and Sellers. With as many FSBO's as I have talked to they are all trying to avoid the realtor cost. What FSBO does not realize is that the person buying the home also wants to avoid the cost. So if a home sells in an area for 250k with a realtor, a person who sells FSBO expecting 250k for thier identical property has forgotten that the identical home only netted 235k minus concessions, a mortgage, and any other closing cost.

If you are selling FSBO realize that using a realtor to advertise your property actually does increase your property value according to the law of supply and demand.
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July 13 2007 - US
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Robin Lynch, "robin398"

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Amen to that.
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July 13 2007
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joannab3884866

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Actually, I think the reality is this......if people didn't have to cough up 7% commissions, they could price the home 7% less, get more traffic through, and sell more quickly. And in today's deplorable market, having the most competitive price is crucial.

-------
"If you are selling FSBO realize that using a realtor to advertise your property actually does increase your property value according to the law of supply and demand. "
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The above comment just slays me!

Property value should have absolutely NOTHING to do with comissions. That's like saying a loaf of bread is more valuable because the person making a profit off the sale of it is high. it's the same loaf of bread, only is more EXPENSIVE. I think some folks also like to refer to it as "inflation". Just ask Mr. Ben Bernanke.
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July 18 2007
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Kevin Lake, "AZ Homes"

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" 7% commissions"



What market do you sill get 7% commissions???
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July 18 2007
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CORONA NICK

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MLS..... thats all you need.... to get enough exposure... if you still cant sell.. then you must make improvements to the deal you are offering.... its that simple.
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July 18 2007
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Jennifer Wilton, "JenWilton"

St. Louis County, MO

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My experience with local FSBO sellers is that they typically have an inflated idea of the real market value of their home, regardless of how commissions relate to it. Because their neighbor sold for $X three years ago, they think they should get the same, because they think their home is nicer.

It always pays to have representation and experience when making a transaction of this sort. For most people, selling a home is something they do only a few times in a lifetime, and the largest transaction most people ever make. In my market, there is no 7% commission, although the myth still exists. Even if you don't think you need help marketing your home, there is no substitute for experience in negotiating and navigating offers, inspections, lenders, title companies and closings- this is the invaluable and irreplaceable experience a Realtor offers.
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July 18 2007
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Julia Malik, "julia_1"

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I don't believe that CASHRIGHTAWAY made himself clear with the explanation. But I support the opinion. Not only because I am a realtor but for these reasons.
1. NAR most recent statistic prove that a home listed and sold with an agent gets close to 10% higher a contract price.
2. Each day full time realtors like myself review the "hotsheet". This is the daily reported listings, sales, deposits, show and closed properties. We know what your home CAN sell for. Why wouldn't we want to get the highest possible price, since we are commission based, even if that was my only objective, which it isn't. Customer satisfaction is number one. I depend on referrals. I NEED my clients to be happy.
3. I think there is some confusion over property value. Any given property value is determined by one factor-what a buyer is willing to pay for it. A market value is the suggested price determined by a professional realtor that compiles alot of data.
4. I can list off endless stories from fsbos that I have spoke to that will never try it on their own again. I would never want to fill my own cavity, or take out my own appendix, if I want the best job done in any situation even at things that I learned to do, I can never dispute that someone who does it every day (9-9 for me) of their lives will do it better.
5. Many people say that their lawers will handle the transaction once a buyer is found. Try to get a hold of him on a Saturday or when you need to know if what the buyer is asking for during inspection negotiations is reasonable. Why make endless calls to track him down when your realtor is only 7 digits away?
6. The true work starts after a purchase agreement is executed. For 2-3 months a good realtor is keeping that agreement strong. Sometimes it requires multiple conversations a day between inspectors, agents, contractors, loan officers, and clients to keep one deal together. Our hours of work are endless and tetious.
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July 18 2007
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Bloomfielder

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Agents in Saginaw, MI still charge 7%. No one brokerage undercuts another; few customers try to negotiate a more reasonable commission.

What's even more amazing is that there's one broker in Frankenmuth, MI who charges a 10% commission and GETS it.
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July 18 2007
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Bloomfielder

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To Julia_1:

Once again, a real estate agent compares herself to a doctor or lawyer. NEWS FLASH: Real estate agents ARE NOT Professionals. In Michigan, one does not need even a high school diploma or GED to become a real estate agent. The State of Michigan has more stringent licensing requirements for hair stylists than for real estate agents.

Furthermore, in the Detroit area, many houses are now listed with a description that includes the caveat "Buyer's agent to verify all information" or some variation there-on. Again: Professionals take responsibility for their own work. Moreover, if listings "belong" to the listing agent, then the listing agent should be [legally] responsible for their content. After all, if you are unwilling to vouch for the accuracy of your listings why, should I as a potential buyer believe its accuracy?
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July 18 2007
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Julia Malik, "julia_1"

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Dear Rockintosh,
I think that you missed my point. Any person that becomes educated and experienced in any give field is more qualified to carry out the duties of that profession. I am by no means claiming to be as educated as a doctor or lawyer. Miriam-Webster define professional as-
"participating for gain or livelihood in an activity or field of endeavor often engaged in by amateurs <a professional golfer>

And the second paragraph has me baffled.

Julia
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July 19 2007
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Robin Lynch, "robin398"

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n deciding to sell your own home you have made the choice to take on quite a bit of responsibility. Selling a home is a complex thing but the results of selling yourself can be highly rewarding. You will of course, need to plan the whole sale process down to the last detail and take into account the fact that advertising is going to be a major concern. You will also have to tackle on aspect of the sale that even owners who sell with agents seem to have trouble with. That is, the proper determination of the value of your home and subsequently the proper asking price. Price is usually the biggest issue in any home sale as sellers want to receive the most and buyers want to pay the lease. The trick to to come to an agreeable middle ground that both parties can live with.

The usual problem with pricing is the fact that there is a disparity between what the seller feels the home is worth and what the home's actual value is. The home's actual value is a difficult thing to determine without the aid of a realtor and many FSBO sellers utilize local agents to perform a CMA on their home to help with the pricing concerns. Another way to go about this would be to have a full home evaluation done. Once these are finished you should have a good idea of what comparable homes in your area are selling for and the evaluated value of your home and then you should be able to decide upon a reasonable asking price that takes all the comparable factors into account.
One must be careful in pricing a home. It is quite easy to price the home out of the market or to price too low and end up with less profit that you could have. One thing that you will have to deal with during the sale process is negotiation and when dealing with your own home it is very easy for emotion to creep into the situation. Cool heads always prevail when negotiating. Remember that even in selling a home there I definitely a budget that must be observed for the sale to be successful.
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July 19 2007
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Charlie Mader, "chasmader"

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Hi--

I made some earlier comments on this site about my feelings re: FSBO's and boy did the hate mail pour in! FSBO's are a tricky subject. Most FSBO sellers know they are cheap; they just cannot help themselves.

CWM
San Francisco
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July 20 2007
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joannab3884866

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Well, in today's world there is cheap, and then there is "losing your butt because home equity in your area of the nation didn't go up so if you need to lower your price, you are in deep doo-doo because you are going to have to unload tens of thousands of dollars to your agent even if it takes him or her years to sell the dumb thing"

It takes the average person years to save tens of thousands of dollars. people aren't cheap. They just do not enjoy losing a ton of money all at once because of "tradition".
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July 20 2007
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Steve Ostrom, ePro, "steveostrom"

RosevilleandRocklin.com

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There are so many wonderful buyers and sellers that still appreciate the value, knowledge and comfort of a great Realtor and if they don't and want to try FSBO, so be it. Like another agent mentioned, you may be of assistance to them down the road or on their next home. My team does so much for clients and puts forth so much time towards showing homes (even more time now with inventory being so high), contracts, agent negotiations, inspections and for sellers even more ... that I want to help those that want to be helped.
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July 20 2007
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jnewel

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Not sure of your point, Rockintosh, about the accuracy of the information, but I can share my FSBO story. I'm currently offering my home FSBO. In the same subdivision there are two homes with identical floor plans to mine being offerred by agents. In both cases, they have inflated the square footage of the property by 100 sq ft or more. We verified the square footage with the county tax records as well as the builder. When we contacted the bureau of licensing about the real estate agents' exageration of the square footage of the homes, we were told that verification of the information is the responsibility of the buyer. Basically, the agent can say whatever he or she wants. Since we are acurately reporting the square footage of our home, it has made it very difficult to compete with these agents who are puffing up the square footage of their listings. One of the agents has done this with every one of his listings in this subdivision. In Washington State, buyer beware!!!!
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July 20 2007
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Kary L. Krismer, "Krismer"

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I posted in another thread a situation where I came across where a seller listed with an agent, was unsuccessful, then did a FSBO transaction for over 10% more than the listing price. The seller basically suckered the buyer because the house still isn't worth what he paid even though our prices in Seattle have continued upward ever since (especially in that price range).

I also posted about how in Washington there's a partial shield for a seller for misrepresentations. If you do a FSBO, all the contact is through the seller, and the buyer can make up any story to claim a misrepresentation. My understanding is if they try that on a property that was listed, and never saw the seller, the seller would be protected.
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July 21 2007
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Charlie Mader, "chasmader"

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Hi--

In California, where I practice, if you represent the buyer of a FSBO and the seller represents himself, you are by default the agent for both parties to the transaction.

Best,

CWM
San Francisco
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July 24 2007
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Randy Henderson, "Randy Henderson"

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My air conditioning repairman has no college degree, either - but he is a professional - and the most important man I know if my house is sweltering and my air is out.

If a Realtor consistently sells homes faster and for more money, why would you care?
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July 25 2007
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KAY ORGAIN, "ASSURED MORTGAGE INC"

DICKSON, TN

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There are alot of FSBO's in our area right now. And most of them are a result of declining real estate values due to foreclosures. Alot of these FSBO's chose the cheaper rates on ARM loans a few years ago when they obtained their 100% financing and now must sell because they can't refinance. There is no equity in the property or they failed to improve their credit during that time. Some of these payoffs are more than the present value of their homes, so there is no equity to pay a commission. Most are not cheap, they are just in a bind. Not all of course. But most people selling their home FSBO a limited knowledge of the legal wording of contracts and the ramifications of not disclosing certain things. That's one reason a Realtor is the best way to go! It is their job to protect everyone involved.
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July 25 2007
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Charlie Mader, "chasmader"

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Hi--

Here's a point to consider: A good Realtor can negotiate a short sale with the lender and more than earn their commission, in the process saving the seller's credit from being permanently trashed.

Best,

CWM
San Francisco
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July 25 2007
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Marci Reinheimer

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If, and that's a big if, you can get the loss mitigation department to actually call you back. Especially all the subprime lenders.
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July 25 2007
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Charlie Mader, "chasmader"

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True.
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July 25 2007
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Aldreth

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There are a lot of FSBO's because people don't trust RE agents or Brokers at all.
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July 25 2007
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jnewel

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Unfortunately, this is true, aldreth. In our experience, we know there are shady agents out there, and we have heard from other agents that they know it too. The agents know who the shady ones are, in one case an agent told me she would never show a home listed by a particular agent because she knew of his reputation, but still these dishonest agents continue to do business. The NAR should kick out agents guilty of puffery and failure to disclose. I know that's supposed to be the policy, but it's not happening. One agent will not report another. This failure of agents to police themselves causes the general public to mistrust all of them. To my mind, if an agent won't report another agent for ethical violations, then they must fear getting reported themselves. The NAR needs to start publicly removing dishonest agents from their membership roles. Sellers with something to hide won't report these dishonest agents either because they need the dishonest agent to do their dirty work for them. Agents can defeat the increasing FSBO's by showing customers that they are honest professionals who are willing to oust the bad apples, not by stealing flyers, and citing absurd studies that claim that sellers make more money when they hire agents. This study, so often cited by agents, is flawed and by the way, paid for by the NAR.
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July 25 2007
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Gerry Kalt, "Your Area Broker"

Hemet/San Jacinto

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We cannot afford all the law suits that would happen. Dishonesty really happens when you allow a dishonest agent to select services and fail to do all that is required of you to protect your client. There are unsavory agents who charge a full boat on a loan and you want to reach over and tell the buyer they are being overcharged.. But you can't, if the net sheet you prepared for your seller is being met, it's time to execute the deal without comment. Of course the same thing happens with high real estate commissions where the listing agent does NOTHING and the company escrow company is one way and they have the title company/hazard disclosure and other companies in cahoots. More sinners than saints out there.
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July 26 2007
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Michelle Hagan, "Michelle Hagan"

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My best advise to FSBO's is this:If you decide you want to sell yourself, do it!!! But set up a game plan. If it doesn't sell with in a certain time limit that you set up start interviewing agents and companies. Remember an agent represents their company, if they're not representing their company well then they are not going to represent you well either. Your agent should have extensive knowlege of the area your choosing to buy. If they don't and won't refer you to someone else they are being greedy and you don't need to deal with that either. My company prides itself on being very professional. and when I say professional I'm meaning we handel our transactions in a professional manner. No calls go unreturned no e-mails go unanswered. We work from a professional office. We conduct our selves professionally outside of the office. In no means do I comapre myself or other professionals like me to doctors or lawyers, but If I'm qualified to pass the national and state test and get licenced then I'm qualified to be called a professional. I am your professional RealEstate Agent.
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July 26 2007
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Lisa Jones, "Lisa Jonz"

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I am in complete agreement with jnewel's previous comment although I'm not so sure NAR paid for that study. :)
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July 28 2007
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Kara Phadael, "Kara Phadael"

South Windsor, CT

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I just wanted to add here, that I am the queen of do it yourself. If I can acquire the knowledge I need fairly easily, then I won't pay someone else. However, I won't represent myself in a court case, even if I think I can win and my points are valid. And, although I am a Real Estate Agent, I didn't represent myself with the last home that I sold or that I bought. I hired a friend for the same reason that doctors aren't supposed to operate on close family members. You are too emotionally involved to negotiate objectively. Even knowing the local market and working full time in this business, when it's your own home that you are selling, you have a tendency to want to price it too high. You see more value in it than a stranger, and you don't always notice everyday wear and tear that strangers see. I applaud the efforts of people who want to sell on their own, but when you end up with more problems than you bargained for, don't be surprised. Very few sales go off without a hitch. It takes negotiations every step of the way on the part of the agent to keep the deal alive.
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August 02 2007
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CORONA NICK

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Chasmadar said
Hi--

I made some earlier comments on this site about my feelings re: FSBO's and boy did the hate mail pour in! FSBO's are a tricky subject. Most FSBO sellers know they are cheap; they just cannot help themselves.

CWM
San Francisco

and your a shark...
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August 02 2007
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CORONA NICK

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and Im a hungry dog looking for a desperate seller.... only the strong survive...lol
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August 02 2007
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Charlie Mader, "chasmader"

San Francisco, USA

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Hmm. Shark. I guess I'll take that as a compliment.
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August 29 2007

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