realtor or FSBO..pros and cons

lbelleFebruary 11, 2012

Planning on selling the house in late spring. Having a heated discussion with DH regarding using a realtor. DH thinks realtors do the same amount of work whether they are selling a 100k house or a 600K house, so why should they get a percentage vs. a flat fee. Are they really worth 30k ?

I say, I care about the huge cost, but would rather have someone else negotiate and use their expertise and connections to bring in buyers. I know that I will end up with the brunt of worry and work if we try FSBO. I care more, therefore I end up doing more.

So, pros and cons please . Our house would be in the 600k range. would it be prudent to compromise ? Like t, try FSBO for a few months. We could use a service that puts it on the MLS. DH is in advertising, so brochures would look professional...pic of house probably better than most I've seen.

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trilobite

Well yeah, in a way your DH is correct. On the other hand, it is what it is. He's not going to single-handedly change how compensation in the real estate market is handled, so he shouldn't let it eat at his liver.

That said, in my limited experience, realtors try to handle the kind of houses they like to sell. In other words, I've found there are realtors who think it's really exciting to help someone into their first home and they handle a lot of starter homes. And there's other people who really enjoy handling high-end properties and that's their specialty. Or people who know a particular group of towns inside and out, etc.

So (again, in my experience) I don't think you're just getting general expertise. If your realtor is any good, you're getting someone who is really going to bring something extra to the table.

That said, if you have time to spare, a limited FSBO seems a reasonable compromise. If you search these forums you can pick up some good tips. And if it doesn't work out, you can always go with a realtor.

    Bookmark   February 11, 2012 at 7:29PM
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sweeby

If 600K is upper end in your marketplace, I would be leery of going FSBO... If 600K is middle market for your part of the country, you could save some money selling that way.

Why the difference? Well, as far as I know, the only real reason to sell FSBO is to save money. At the upper end of the marketplace, I would expect a bit more cynicism about 'cost cutting' efforts, and perhaps some suspicion on the buyers' parts that perhaps corners were cut in maintenance or construction...

I've seen very few FSBOs in our neighborhood (one of our city's most expensive) and those houses tended to sit for a long time on the market -- much longer than those with realtor signs. Those houses also tended to have a lot of DIY renovations, so that may have played a part.

    Bookmark   February 11, 2012 at 9:49PM
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marie_ndcal

It might depend where you live and how much you have in your home that is valuable. Sometimes people come to see what they can steal later, especially in the upscale areas. Or they come when you are home by yourself--that could be dangerous. Many times a realtor can sort out those really interested and those who just are looking. A good one will help you ""show"" your place better. That is sort out and clear out and clean up what you don't need, and fix the little things we see everyday that distracts from the value.

    Bookmark   February 11, 2012 at 9:51PM
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cas66ragtop

I tried the FSBO route with the intention of avoiding the commission, and it was a big failure. We were asking $275k at the time, had it on the market for 6 months as a FSBO, and only got 4 showings. A total waste of time.

Even with a FSBO, still can't avoid the commission. First of all, the buyers' agents will not show your house unless you give them a commission. Secondly, the buyers looking on their own will know you are not paying commission, and they will expect you to give them the money you are saving. The biggest reason FSBOs don't work is marketing. Yes, they have FSBO websites, but they pale in comparison the the MLS. Your house being on the MLS is one of the most important things a realtor can provide. I also think a big reason FSBOs don't work is because the majority of buyers have been brainwashed into thinking they NEED a realtor to represent them. I also think buyers are very uncomfortable having the owner of the house being there.

You can always try the FSBO route first and see what happens. I guess it can't hurt. Obviously some people do have success with this, maybe you can be one of them.

    Bookmark   February 12, 2012 at 2:15PM
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sweet_tea

Meet in the middle....

Hire a flat free broker to place your home in the MLS for approx $500. You take the photos, you write the listing comments and fill out the form that specifies the details of your home.

In the MLS, you offer 3% or 2.5% to the agent that brings the buyer. The agents call you for showings and you either open the house for them or you get a lockbox and give them the code so they can enter/show. You leave the home for each showing so agents can show to buyers.

Get a nice custom sign made at a sign shop for $100 or under. You get your phone#, #beds/Baths and other important factors added directly to the sign. You pick the colors and can even add a photo or icon to the sign. what is your big selling point?lakefront or on the golf course or a finished basement or 3 acres. You get those important facts added to the sign. this is where you stand out from agents that have a standard sign with 2-3 tel#s and the agent's name and brokerage on the sign. You use your sign to market the features of the home.

You also buy a flyer box and attach to sign and have nice photos included. Also create a web site with 10 or so nice photos. On the flyer, say "for more photos see web site xyx.

You hire a certified appraiser to appraise your home for under $500 typical price range. You tell them you are going to see and want to know the price to sell for. Then you pprice 5%-8% higher than appraisal price so you can then negotiate with buyers and sell at the appraised price.

Your tel# that you use for the sign...make sure that is answered quickly and any VMs you return pronto.

I sold FSBO several times, last time in the most recent market when prices were falling and most houses sat on the market for a year or longer.

You can do this. Pricing it correctly is most important. Having it in proper condition to show is 2nd in importance.

    Bookmark   February 12, 2012 at 5:49PM
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greendesigns_gw

If you are willing to look at it as paying yourself 18,000 for all of the marketing, showing, negotiating, and other things that a realtor would bring to the table, then do it. But only FSBO if you do flat fee MLS and are willing to do the work to sell and negotiate(and there is a LOT of work), and you are willing to pay the commission to the realtor who brings you a buyer. Realtors will just not show your house at all if you are not willing to pay their commission, and no one will ever know it's for sale unless it's on the MLS.

And get an appraisal and price it right. The biggest biggest biggest mistake FSBOs make is improper pricing. They are in love with their house and have blinders on. Plus they think they will "pocket" the "savings" from not using a realtor, and that simply isn't the case. The buyer is the one who usually ends up with a lower price rather than the seller the higher price. It IS a buyer's market after all.

The biggest thing that a realtor can bring to your home sale is the objectivity to the process. It removes that element of emotional attachment that kills so many FSBOs. And of course, you are buying their work instead of yours. It will be easier on you. Look at the DOM for your market and your comps. Oh, you can't because only realtors have access to that info? Another reason to hire a realtor. :)

    Bookmark   February 12, 2012 at 7:11PM
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sweet_tea

days on market and comps will be given to you as part of the appraisal when you hire a licences appraiser.

FYI,..I sold FSBO a few times. Only the last time I used a flat fee broker to get into the MLS. However, that particular home ended up selling to a buyer that found the home by driving by and seeing the sign and taking a flyer.

The other homes I solf FBSO were not in MLS.

If there are any similar MLS listed homes near yours, chances are the buyers will drive by your home on the way to see the other - even if you are not in the MLS.

It is a lot of work and dedication to sell FSBO. It's not for everyone. It has to take a priority in your life. When I did it, I was always available for a last minute showing - no matter what. Always professional and pleasant. Treat it as a business transaction.

OH - it is important to not talk and talk to realtors or buyers. Sometimes you blab too much info. They will ask why you are selling, where you are moving, how long you lived there, and many other things. Be ready for those things.

There will be some buyers that see your sign and don't have realtors. You should show the home to those buyers. When I did this, i would let them inside and allow them to tour the home on their own and I would step onto the patio and let them know if they had any questions that is where I would be. You can go to the front porch or garage.

Lock up your valuables no matter if you list with realtor or not.

    Bookmark   February 12, 2012 at 8:08PM
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azmom

Your husband is in advertising, does he know real estate transactions? Does he know "house", "property"? Is he good at negotiating? Is he good at following through and removing every single obstacle during the entire transaction even after closing? Do you know your local market? Do you know how to stage a house, how to sell? Do you have a good lawyer and a good title company? Do you know how to get a loan? Do you know how to deal with difficult buyers or buyers who know so much more of every step of the entire transaction than you do?

Definitely, FSBO is doable and you would have better control. But, it is A LOT OF WORK even in a good market.

We did FSBO during the rising market so we pocketed the commission for doing the work ourselves. In the current market, it is likely the benefit of FSBO is to give up the commission in exchange for a lower selling price so that your house would sell sooner.

    Bookmark   February 13, 2012 at 10:37AM
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maremma

The operative words when selling via FSBO vs realtor are "quality control." How many times have people on this forum been disappointed by sub-par performance from a listing agent? The posts are too numerous to mention. Sometimes it is not all about commission savings or a lower asking price, but about keeping a tight hold of the sales process.

    Bookmark   February 13, 2012 at 5:23PM
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lbelle

Thank you for all the comments. You have given us many points to think about...especially about what is involved in FSBO and what the realtors job should be. Great pros and cons.... thanks.

    Bookmark   February 14, 2012 at 9:46AM
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c9pilot

Just wanted to put in that I don't think Realtors do the same work for $100K homes as $600K homes. Many of the differences have been pointed out, including Realtor specialties. There are different buyers with different expectations at those price points, with a breakout between conforming loans and jumbo loans.

Marketing is totally different, at least in my area. $600K is around the breakout for "luxury" homes and sellers expect to be listed in the local luxury home magazine that appears in my mailbox each month, along with all the multi-million dollar homes. Luxury sellers expect the full 360 video advertising (not still photos zoomed in and out or side to side in a slideshow). They probably expect their agents to drive around in a Mercedes (or similar), not a Honda Odyssey (like me). They tend not to do brokers' open houses. They often demand proof of funds before a showing (not just with an offer). This is what I can think of just off the top of my head.

    Bookmark   February 14, 2012 at 10:53AM
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