Profile picture for tommygun1962

Why even use a realtor?

I have been reading many of the posts here and the more I read some of the agent postings the madder I get.  These are the reasons I'm a FSBO.

 

Why pay up to 6% of my home value if the agents don't really like to do open houses and some won't (meaning they really don't have their hearts in it so you, the seller, suffer), they list on Craig's List, YouTube, here on Zillow and the like (all free services and let me tell you its really easy and quick to do a very good listing/ad and you don't have to be a real estate expert), they do "intensive internet marketing" (aka the former) and they refer to buyer's agents as "buyer's agents", meaning they still think they are "selling agents."

 

I've listed my house here on Zillow, have put ads on Craig's List, am putting an ad in the NY Times and Star Ledger and have had open houses 3 of the past 5 weekends. I've had many walk thrus, average two calls a day and had one offer, though that buyer couldn't qualify for the loan.

 

All of this cost me much less then the $20K it might cost me to use a realtor, and based on the comments of the realtor who had an open house a few doors down from me at the same time, I had more traffic and a better open house. Do you know how many ads in the local real estate section you can buy for that amount of money? And if you really want to sell, who can show your house better, you or some agent who really doesn't have a real stake in your outcome other then a check for very little work?

 

Someone tell me, what do you get by using a realtor versus not using a realtor?

  • November 19 2008 - US
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Answers (79)

Will you pay a buyer's agent a percentage if they bring a willing and able buyer?

  • November 19 2008
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Profile picture for wetwillie

"Someone tell me, what do you get by using a realtor versus not using a realtor?"

 

Odds are, a quicker sale. Other than that I'm with you.

  • November 19 2008
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Profile picture for sburke

There are people that do need agents.  If someone can not be at the house most of the time you would need an agent.  That may mean you work and can not show the home or you have moved out of town and of course you would have a very hard time doing a FSBO.  And I guess that some people just lack the abilities or confidence to do it on their own...

  • November 19 2008
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Quicker sale yes but also more exposure, pricing and negotiation expertise, a vast network of buyers, the ability to refer you to knowledgeable professionals like lawyers, home inspectors, general contractors, lenders, etc which can save you thousands in a heartbeat.

 

If you're questioning what your agent brings to the table you're talking to the wrong agent.  If they can't list 10 things they can easily do that you either don't want to pay for upfront, don't have time to do, or aren't that familiar with, then yes you're better off selling on your own then paying THAT PARTICULAR person to sell it for you.

 

Also wanted to throw in that very few people in the general population are cut out for negotiations and when it's your house it's very easy to get emotional and let those emotions get the best of you.  Having an impartial saleperson in your corner when that happens is never a bad thing.

 

I'm sure you'll tell me you're fine with negotiating and if that's truly the case then kudo's to you and bet of luck!

 

 

  • November 19 2008
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Profile picture for mle_mle
A large percentage of buyers are using "buyer's agents" who, whether right or wrong, will steer them away from FSBO. Your odds of selling more quickly (relative to the market, of course) and for as much as possible are better with a seasoned agent rather than going it alone. And no, I'm not an agent. I've just been around long enough to spout statistics :)
  • November 19 2008
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Great point

  • November 19 2008
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Profile picture for Heather Cook

Aside from all of those fabulous pricing, marketing and negotiating skills that seem to hold little value to participants in this thread, I rarely know ahead of time what my value will be to my clients.  But at various times, I have defused potential lawsuits against sellers; kept spooked buyers from walking out on contracts; helped sellers re-gain control of properties that they thought they owned and could sell but didn't; identified easements and encroachments that could have prevented a sale; navigated the complex world of court sales and bank sales; and more.  That's off the top of my head, so there might have been a few other useful services that I was able to offer my clients.

 

Don't get me wrong.  In a perfect world, FSBO would always be the way to sell a house.  I just find that I can't always predict when the world is going to skew away from perfect.

  • November 19 2008
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Tommy,

 

I don't have much to add, other than a couple of terms which are used by agents but sometimes misunderstood by others (even other agents!)

 

The listing agent is the person selling the house.

 

The selling agent is the person representing the buyer; they are also called buyer's agents.

 

In your case, you seem comfortable selling your house on your own.

 

Sell it soon so there is one less on the market please!

  • November 19 2008
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Most Agents are awesome; they know about different types of loans how to overcome obstacles once you are under contract, because they do it every day.  They price your house RIGHT, and get updates on what is going on sales wise in your neighborhood as it happens.  They are happy to have open houses. They network within the community, with other agents, and know when people are moving. Realtors have whole web sites dedicated to selling your home. They are professionals at listing, picture taking and description writing. All they think of is selling your home until it is sold. There are a few bad apples out there, but that happens in every profession.

  • November 19 2008
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No. Most agents, not all, are uneducated, greedy b@stards that jumped on the bubble bandwagon in the last 5 years. 4 weekends of homework to get their license and they compared themselves to doctors and lawyers. Again I said most and not all.
  • November 19 2008
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What so ever it is, as long them make enough money to raise their children, then they are smart people !

  • November 19 2008
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SoCal:

 

That's not right. I spent 30 actual hours in a classroom. No weekends.

  • November 20 2008
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If you think you can do it on your own, go for it and keep us posted.  Statistics show that FSBO sales will sell for 15 to 20 percent less than what it would have been sold for using a professional realtor.  Obviously that math more than covers the real estate commission.  Further it will also take much longer to get it sold as well statistically speaking.  Dont step over dollars to pick up dimes. 

 

Further, the next question is once you get the offer, is to be on top of it and know all the landmines and have the skills to get it to the settlement table.  Too much risk in this market not to use a professional realtor.

 

  • November 20 2008
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Profile picture for wetwillie

Somers Team,

 

Your post is a good example why some people do not trust agents.

 

NAR stats say that sellers that do FSBO sell their homes on avg at about 12% less then what they would have gotten with a Realtor. "

Below is a post from an agent on another site to a colleague regarding the study.

"I am familiar with the statistic that you referenced. The NAR does go on to point out however that if you take out FSBO sales where there was a friend or acquaintance involved in the transaction and just look at transactions in the open market the percentage is tighter. Roughly 9-10%."

Now deduct the agent's commission and it gets even tighter.

However, and there is always that however: 

http://faculty.wcas.northwestern.edu/~ane686/research/fsbo.pdf

And more recently, the September issue of Consumer Reports magazine also reported that FSBO sellers are more likely to get their asking price while agents deliver, on average, a sales price that is $5,000 less than the original asking price.

  • November 20 2008
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"Why pay up to 6% of my home value if the agents don't really like to do open houses and some won't "

 

Open houses only sell houses less than 1% of the time.  An agent spends time doing things that produce results.

 

Where the Buyer found the home they purchased:

  • 36% agent
  • 24% internet
  • 15% yard sign
  • 8% friend or relative
  • 8% builder (new homes)
  • 5% newspaper
  • 3% knew the seller
  • 1% home books/magazines
  • less than 1% (other sources which total less than 1%)
  • Please note: OPEN HOUSES sell less than 1%
  • November 20 2008
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I say you add up all the percentages and you get a Realtor that is giving you 100%.  Just do the open houses!! 

  • November 20 2008
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Profile picture for dfors2

Tommy,

 

I have now sold 2 homes FSBO this year with discount brokers.  No commissions although 3% was offered to buyers agents.  No agents were involved however.  I did however have to think outside the box and do some trading.  In this market trading up should be easy but trading down hard.  I traded a 499k home for a 245k home.  No realty fees involved.  I am then traded the home for 248,900 (I did upgrades) for a 129 beach condo.  Now I plan on selling 1/2 of the condo to a friend and doing owner financing.  Its been a strain, but I tried the standard route for 15 months and got nowhere. 

 

If I had another home to sell I would use the discount MLS and I would pay at least 3% buying agent fee.  I even think I might go to 3.5 or 4% to try to bring in agents.  Still saves 2-2.5%.  You get to negotiate with either the buyer or the buyers agents and I think you can swing more trades that way.

  • November 20 2008
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Tommy along the same line....

 

Why use.....

A Barber...I can cut my own hair.

A gardener...I can cut my own grass

A teacher...I can home-school my kids

A CPA...I can do my own taxes

A Bookkeeper...I can balance my books

A Fireman...I have a hose

A policeman...I'll carry a gun

A banker...I have a mattress

A receptionist...I can answer the phone

A pharmacist...I can count my own pills

A Lawyer...I'll defend myself    (Isn't there a saying about people who represent themselves?)

 

  • November 20 2008
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Profile picture for tommygun1962

Scottnewman, your comments I find good and helpful.

 

Jon Huther, based on what you put here I have a better chance of selling my home by putting up a yard sign and ads on the internet and the newspaper (44%) versus using an agent (36%).

 

I will say that I do not know any agents in my area who actually participate in substantial negotiations nor have taken training or have extensive experience in it, so the negotiation thing I often question. I negotiate million and billion dollar transactions, often very complicated, and I have helped friends during home negotiations. I noted that in many cases the agents are not fulltime professionals, are often doing real estate part time, many only have high school educations and are not in any way truly qualified to negotiate anything. At one recent one my friend's own agent almost "negotiated" the seller out of the deal. And usually only the lawyers and owners can legally negotiate and agree. Agents are only advisors. That is why in most states you need attorneys and attorney review.

 

I can't speak for other states, but in NJ once the contracts are in and out of the attorney's hands it becomes a matter of contract law and the agents normally do little or nothing but show at closing.

 

I'll keep you posted on my sale. I know it will take longer because I will get statistically less foot traffic, but if the agents in my area are what I'm comparing myself to I already am way ahead of them.

 

I also know that in many cases the relationships and networks of attorneys, home inspectors and other professionals have a financial component (call it birddogging or kickback) that sometimes doesn't serve the buyer or seller well.

  • November 20 2008
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Most Agents are awesome; they know about different types of loans how to overcome obstacles once you are under contract, because they do it every day.

 

Are you serious?  Most agents are morons, complete and utter morons who do nothing more than take listings and hope buyers show up and drive buyers around to look at houses hoping they'll make an offer on one that is high enough to get accepted so they don't have to do a lick of real work.

 

If you set an IQ standard to be a realtor at 5-10 points above average you'd wipe out 3/4's of the entire fleet of agents in this country minimum!

 

I know of dozens of so called experienced agents who literally don't know the difference between a prequal letter and a clear to close from the bank.  I've heard agents who have been around for decades say such untrue and stupid things I have to keep myself from laughing out loud.

 

The licensing process is a joke too!  I am completing my broker license CE and I am doing it online and I don't even read the info and can still get 100% on all the quizes to pass the classes.

 

Finding a good realtor is harder than finding a good doctor or even maid because there's no place where they're ranked or reviewed. 

 

I'm usually a positive person but to sit here and say most agents are worth working with is just a joke!

  • November 20 2008
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Tommy,

 

Just FYI, you really didn't seem to understand the statistics that Jon posted. The 36% percent means that the buyer's agent identified the property to them. And probably through the mls system. That doesn't mean that you can add up the other items and be more effective than an agent!

 

To be perfectly frank, your misinterpretation indicates that you may not understand enough about how real estate transactions take place to effectively market or negotiate a price on your home. That is absolutley not saying you can't learn quickly and then sell you house effectively, but it will probably require more research than you seem to have under your belt this far. But kudos for taking the first step on Zillow. It's a great tool - just don't rely on it too heavily for pricing.

 

Furthermore, different parts of the country rely on attorneys for different things. In Georgia, you'd do yourself a serious disservice to use an attorney to negotiate a contract. Sure they know their way around the contracts, but (generally speaking, of course) they don't know anything about current market pricing, home value or creative concessions. They just don't need to - it's not the way their job works in Atlanta. Sounds completley different in Cali. You'll need to find out how things work in Jersey. 

 

Lastly, my best advice to you marketing on your own is as follows:

 

1. Do  whatever it takes to get it on the listing services. In Georgia, you can't do that without listing it with some type of broker - even if it's a discount broker. Sucks, but it is what it is for now. However, it's different from state to state. You MUST get it on there somehow. As the 36% references above, in all liklihood an agent will be bringing you a buyer and that's were they'll find your house.

2. Have great pictures. I urge you to hire a professional. It's not that much money and it's worth it every time.

3. Get it everywhere you can online. Esp Craigslist (you'll need to update it there 2 xs weekly). This is also your best bet for getting unrepresented buyers, which could save you additional $. I wouldn't bother with print ads. They tend to be expensive and people just don't go there anymore.

 

That's all for now - good luck!

  • November 20 2008
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Profile picture for wetwillie

Jan,

 

Your post sounds like it comes from a professional that acts like a professional. If the 80/20 rule does apply among agents as some of the previous posters would indicate, you must be in the 20% category, at least in your market. In the interest of fair play if you hadn't called Tommy on his interpretation of statistics, I was going to. It was on a par with the NAR.  Hey, that rhymes. We all know the NAR is the champion of spin though. The only thing I would add to your post is for Tommy to check out this link .

  • November 20 2008
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You realize by saying you saved 20k, you just reduced the price of your property $20k ?

 

  • November 20 2008
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Hey thanks, wetwillie! Hard to get compliments here. Much appreciated! Brillant link, too.

 

And one last item - above all other things. Pricing is key. Get help. Even if you think you're objective, trust me, you're not. It's the numero uno mistake of FSBO sellers. I bet half of you could sell your homes without using us if you just PRICED IT RIGHT AT THE BEGINNING!! See, you made me yell.....

  • November 21 2008
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I don't know how I missed Kimberlee's post above.  Kimberlee, you were doing well until your last line (actually, you starting losing it when you hit "fireman").  You agents just can't help comparing yourself to attorneys, can you?  Tell you what, Kimberly.  You take the bar exam.  If you pass, then you can represent me.  There is a reason that the bar exam is more difficult than a RE exam....

  • November 21 2008
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Oh, and in applying some Venn diagram logic, CPA covers "bookkeeper."

  • November 21 2008
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Profile picture for klarek the realist

"Most Agents are awesome; they know about different types of loans how to overcome obstacles once you are under contract, because they do it every day.  They price your house RIGHT, and get updates on what is going on sales wise in your neighborhood as it happens.  They are happy to have open houses. They network within the community, with other agents, and know when people are moving."

 

LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL

  • November 21 2008
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Hi again K101,  Seems you are getting out of control again? 

 

Granted the bar exam is harder than the Real Estate exam does that mean that no one needs a REALTOR? 

 

You are reluctant to give credit to even the good REALTORS. 

 

As you should know real estate and law are two different professions.  And while I would never attempt to argue a point of law with an attorney, it seems egotistical at least, for you to claim complete knowledge of the real estate process.  Oh, Yes, I am sure you know the definitive and exact legal guidelines from the book however, many deals are made by the exercise of a combination of negotiation skills and work ethic.  Neither of which are defined in either of our required courses. 

 

The truth it seems to me, is that REALTORS are able to encourage a good deal in ways that are outside of what an attorney is willing to do.  We serve different masters.  While you are, by your oath, confined to strict legal mandates, my code requires me to serve only the objectives of my buyer or seller and their goal to buy and sell a house.

 

I work daily with many excellent attorneys.  In my area and yours, they are some of the highest paid professionals on any one's list.  These attorney tell me that without the skills I bring to the table, they would have far fewer clients.

 

In my humble opinion, real estate is a coordinated effort, instigated by a buyer and a seller, examined by a mortgage broker, reviewed by an attorney and shepherded by a REALTOR.

  • November 21 2008
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ConnecticutRealtor,

 

I think that K101 is either an Attorney or comes from a legal background.  That is probably why she doesn't like the comparison.

 

I do like your comparison of the two fields.  I would say this... anytime anywhere I love to negotiate deals with Attoney's on the other side.  IMO there is no advantage held by an Attorney in negotiations, that doesn't prohibit the Attorney from being a good negotiator, but its not a given that it helps.

 

Famous line from just such a negotiation.  "That is not how a land deal is structured.  This deal will not happen like that and not at that price!" 

me:  "I guess we are at an impasse"

Attorney:  "yes we are"

Two days later.  Attorney sends over signed contract, with our structuring and our pricing.  LOL.

  • November 21 2008
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Yes, a good RE agent (not necessarily a REALTOR) brings value.  Just like a good hairdresser.  A bad one is a waste of money and/or can make you look silly.  However, neither one is mandatory.  And, yes, there are a few bad attorneys out there that somehow make it through the licensing filter that are a waste of money as well.  But, clearly, that filter is much, much, much more effective (hence my reference to the Bar Exam).

 

I really don't want to quibble about professional comparisons.  I just get a tad bit annoyed when agents equate going FSBO or buying unrepresented with "practising self-dentistry" (like I read in another thread) or being one's own "fireman" or "policeman."  It is just silly.

  • November 22 2008
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