Realtor value in the age of low inventory, high demand

herusFebruary 24, 2014

The situation above is what seems to be prevalent in our neck of the woods. Highly desirable school district coupled with well-priced property in good condition (yes I know those two qualifiers are critical) and the offers are rolling in.

As we get ready to list our home, am wondering if a full-service realtor would bring enough value. We sold our last home via a discount service and got to keep nearly all of the standard 6% commission. Even 3% is a good chunk of change.

I agree that they will do a lot of things, yet wonder if it is worth that much. I know it's an age-old question, been discussed ad infinitum, etc. But thought I'd get an updated view, given the current market conditions.

Our home will be well priced though not necessarily agressively so. It is in excellent condition and is one of only a few lake homes in a predominantly non-lake community. I plan to price it about 10% more than the sale price of a recent non-lake property, which arguably was in better condition as it was a full gut and re-do (ours is just nicely updated, with several major upgrades along the way. These upgrades are a few years old vs brand new but still in good condition).

The decision is not a slam dunk. We've studied the pros and cons deeply (time vs money, effort, etc) and are still on the fence. Thought I'd get some crowd-think going.

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BelfastBound

I think you might look at this another way.

I am a FSBO and I came to that decision by asking, "Do I have what it takes", not "will I get my money's worth with a realtor?"

There are FSBO who don't even come to the door when they have an "Open House" sign posted and others who post their photos sideways on Zillow.

There are realtors who can't spell the name of the school district correctly and those who are literally and figuratively out to lunch when you need them.

In my area a home that was pre-marketed and staged to sell by the owner/broker sold in a day. A similarly priced home with an entry only firm sold in 2 weeks by a FSBO.

My guess is if the house is priced right, you don't need a broker if you have all the time and qualities of a top broker, (good with people, attention to detail, marketing awareness) I would give it a shot. Why not, if time is on your side?

    Bookmark   February 24, 2014 at 9:15PM
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Mmmbeeer

We've done FSBO three times and the longest it took us to sell was 10 days so I would recommend it. But only with the caveat that you are prepared to do a LOT of prep work, cleaning, and decluttering beforehand, and get an inspection prior to selling your home and then repair any work that needs to be done BEFORE you start marketing. Of course, the most important part of the process is to price it to sell. I would recommend figuring out an honest comparison against SOLD homes in your neighborhood and then discount your home from that figure because buyers know you aren't paying any commission. We received multiple bids on all our homes and on one, buyers drove the price well above asking. If you get too greedy (as I feel the vast majority of FSBOs do), expect to sit on your home for a while. I certainly don't discount the work of a great realtor--my husband and I just liked the control we had and feel we are more objective than the average person about realistic pricing. To me, once I prepare my home to sell, it's no longer "my" home, it's the product I am marketing.

    Bookmark   February 24, 2014 at 9:48PM
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Mmmbeeer

There are FSBO who don't even come to the door when they have an "Open House" sign posted and others who post their photos sideways on Zillow.

There are realtors who can't spell the name of the school district correctly iand those who are literally and figuratively out to lunch when you need them.

^ This is such a great point and what why we chose to FSBO. We made sure all the pictures were clear, showed the room (not the decor), didn't use superfluous language (MUST SEE--this home will go FAST!! and then I see it's already been listed for 200 days on Zillow), we had multiple signs on all the major intersections near our home as opposed to one on the front lawn), ALWAYS had the box out front full of spec sheets marketing the home, etc. etc.

A good realtor really does earn every penny but, unfortunately, just like every profession, so many are just mediocre.

    Bookmark   February 24, 2014 at 10:05PM
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herus

Wow, great responses and quite clearly in favor of the FSBO. As we currently live some 25 miles away from the house, keeping it neat and clean would not be a problem (it is lightly furnished/staged, to avoid that empty and forlorn look).

But showing it might be, if someone wants to do so during a workday*. For this reason we are thinking of using the discount broker, which puts the home on the various MLS sites. It also assures the buyer's agent of a full commission. I've been told that even FSBOs need to 'protect' the selling agent... and if that is going to happen, might as well get it on the discount brokerage, which will cost only a couple hundred bucks (we listed the same house with them years ago so that fee will carry over).

I am also a bit of a handyman and have gone over the home with the proverbial comb and brought it up to spec.

I SO agree on the 'dumb-ness' of some realtors. Now that the market has picked up, they are flooding in like buzzards onto roadkill.

BTW if anyone from the north Atlanta 'burbs is reading this and has any experience with a recent sale or purchase please share your experience, it would be much appreciated.

*Of course either self or spouse can make the drive during the week if someone is hot to trot.

    Bookmark   February 25, 2014 at 10:16AM
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weedyacres

We put a lockbox on our front door and let agents with buyers access the house to show it just as any fully represented property.

And with the vast majority of buyers still using agents, I'd opt for flat fee MLS over just FSBO. 3% commission still sucks, but it beats 6%.

I think BelfastBound has it exactly right: both good agents and good FSBO-ers can sell homes. But there are bad ones in both categories.

    Bookmark   February 25, 2014 at 10:53PM
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azmom

Cleaning, preparing, staging house for sale are very important, but marketing, selling, negotiating and closing are more important parts of a transaction.

Some home owners cannot sell, some are not financial/business/legality savvy, some are not capable to work 'begin' with 'end' in mind.

Some sellers are not good at dealing with people, they easily offend people, or are easily being offended. Some are impatient, timid, greedy, naive or scared. Some talk too much, some are too cheap trying to cut corner.

Some people cannot do basic math, let alone arraging win-win terms for the deal. Some cannot manage paper bags, they have no idea as how to coordinate a real estate transaction.

If you have what takes, there is no reason not to FSBO, and not to get top dollar for your house.

    Bookmark   February 26, 2014 at 2:35AM
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bonniedi

I thought I'd chip in from a buyers perspective... I have been searching high and low for our new home, and the current low inventory situation is really making it difficult. In the Philly burbs, many of the homes I've been interested in have sold before I even setup a showing. My house went under contract to the first person that walked through, before the house was on the market. I have looked at 2 homes that were FSBO, and both sold quickly. My realtor has earned his value to me with his negotiating skills, which I know I do not possess. As others said, it's up to you to know if you can do the job, but the house will most likely sell itself.

    Bookmark   February 26, 2014 at 6:09AM
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gyr_falcon

We were lucky that FSBO was not as common in our market. Even if the FSBO owner can check all of the boxes, as a buyer, I disliked viewing FSBO homes. Unless the owner leaves (unlikely), there is no way to really discuss the house with your partner, both good features and bad. It is not just that the owner and future negotiator is taking notes on everything that is said, they are emotionally invested in a way that the seller's agent is not. The seller's agent won't take offence if I want to rip out some hideous feature and ask my husband how much putting in what we want would cost; it is not wise to say anything about changes in front of an owner in case you end up wanting to make an offer.

Discussing the numerous concerns later is difficult; my husband would not have noticed the same issues, and needed to check out the details on site to provide an opinion. I would always carry a camera with me during all viewings, and take photos of all types of things we might need to remember about the house. A seller's agent really could not care less what features and rooms I photographed. I also felt free to look up the fireplace chimney, open and close windows, or test the spongy room addition floor. I've seen owners become uncomfortable when I took a photo to remember the layout of a closet. It really curtailed what I felt comfortable photographing, and later it was difficult remembering things that needed to be discussed.

Can you sell your property FSBO? Of course! But IMO that benefits the seller more than me, as a buyer. And I am a lot less likely to offer more than the asking price and get into a bidding war for a house that I've viewed only superficially. Although, a really nice lake view... ;-)

    Bookmark   February 26, 2014 at 4:05PM
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BelfastBound

On another thread a while back, a FSBO said they sat outside on the back patio while buyer's looked around. I notice at open houses, the practice now in my area, is for the listing realtor to stay in the kitchen and hand out a 10 page brochure to market the house. Just like car dealers here they let you test drive on your own. So to Gyr's point, make yourself scarce but please for Pete's sake, don't lock your door when you have an "open house" and when I knock - open the darn door. Geesch.....

    Bookmark   February 26, 2014 at 10:39PM
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Mmmbeeer

We sat on our back deck during all of our eight hour long Open Houses. We greeted prospective buyers at the door, told them that if they were serious buyers that there was a clean inspection report for them to look at along with other info pertaining to the house and that we would be on the deck outside if they had any questions. I also jokingly told them that if they were just "nosy neighbors" like my husband and I are, feel free to look around. You could see every person's relief at knowing they weren't going to be hounded by an over zealous home owner come through in their body language.

    Bookmark   February 27, 2014 at 6:29PM
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