FSBO, do I work with agents?

pvelNovember 1, 2010

I am about to list my home as FSBO, by running an ad in the local paper. I see some sellers write 'Real Estate Agents welcome'. Is this advisable and how much of a commission do they expect, is it negotiable? Thanks, Paul

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Billl

It is your choice, but around 80% of buyers have agents. If you don't work with them, you lose 80% of potential sales.

Commissions vary locally, but 2-3% is normal. It is negotiable, but most agents won't work with you if you don't pay close to the going rate.

    Bookmark   November 1, 2010 at 9:04AM
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graywings123

Just my opinion, but newspaper advertising is expensive and doesn't reach nearly the audience that on-line advertising does. Craigslist is free, and what you should aim to do is get your house on the MLS through one of the low-cost brokers who exist mainly to get FSBOs on the MLS.

I agree with Billl, pay the going rate to the buyer's broker. Maybe even a half-percent more.

    Bookmark   November 1, 2010 at 9:11AM
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greenbank

graywings has good advice; get on the MLS and let buyer's agents know you welcome them, and offer at least full-boat commission.

Here's why: FSBOs are notorious for being difficult to work with and close, and a lot of agents just don't want to deal with them. FSBOs are also often over-priced and unwilling to move on price, which also makes them difficult to close. (Even if you get a star-struck buyer willing to pay over what your property will comp at, banks won't lend them enough to buy it without requiring a huge down.) If an agent sees a FSBO that's 30% over market, they're not going to show it...why spend the time when it will never get financing?

Do yourself a favor and be as "profesional" in your ad as you can be; not that there aren't tons of agents who suck at this, too, but: good, clear copy which highlights the great features of your property; good photos which show the property to its best advantage; know all of the answers to typical questions (schools, utilities, beds, baths); have your listing package ready to email or fax upon request; etc.

    Bookmark   November 2, 2010 at 6:55AM
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haley_comet

I sold my own house (proudly!) - and I did not welcome nor discourage agents in my listing...however I did not want agents..heck I did not want to pay anything hence my FSBO. Luckily I found a buyer without an agent. I had flyers and held 1 open house and it was sold. I would say if you did welcome agents it would be at 2-2.5%.

    Bookmark   November 2, 2010 at 7:50PM
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ncrealestateguy

Like all things in life... you usually get what you pay for.

    Bookmark   November 3, 2010 at 5:55AM
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freezetag

When we sold FSBO, we were willing to work with sellers' agents. And we did have an offer from a buyer with an agent; however, we accepted a lower offer from another buyer with no agent, because it netted us more money.

That was during better times - not sure where you are, but I would definitely be open to working with agents. You don't have to accept any offer you don't like - why not open it up to everyone who is willing to show your house?

    Bookmark   November 3, 2010 at 10:32AM
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bedfordfred

We just sold our house FSBO.

What didn't work for us:

- Newspaper ads. COMPLETE waste of money. Nobody uses the newspaper to look for houses anymore, or at least they don't in our area (NH).

What sorta worked for us:
- Craigslist ad. Got 4 or 5 inquiries this way, two showings.

What worked well for us:
- Our own web site. I'm a software guy, so this was an easy thing for me, and it generated a ton of hits. Do something like 123MainStreet.com, put that in your online ads. I had a ton of high resolution pictures along with a complete floor plan. I can't stress enough how this was one the most important factors of our successful FSBO sale.
- Putting our house on the MLS. We paid a local firm $400 to put our house on the MLS. 94% of our contacts/showings came from the MLS. We offered 2.5% commission to any buyer's agents.

In the end, it worked out extremely well for us. Not only did we end up selling for a great price (better than almost all comps), it sold quickly and required little more work than listing with a realtor. To boot, we saved almost $10,000 in commissions.

    Bookmark   November 3, 2010 at 12:27PM
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susana_2006

A few years ago, I was looking for a very specific type of house (2 family) in a very specific neighborhood. there was not much inventory at that time. The right house came up (and I had been working with an agent -- 2 failed contracts so I did feel that in fairness, he should be involved in this transaction). Anyway, I'm sure the seller got a better deal from me than he would have, had he insisted on no agents.

On the other hand, if I hadn't already been working with the agent, I would have gladly bought the house using a real estate attorney instead of an agent.
Good luck
Susan

    Bookmark   November 3, 2010 at 6:30PM
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notto

Posted by ncrealestateguy (My Page) on Wed, Nov 3, 10 at 5:55

Like all things in life... you usually get what you pay for.
***********************************************************

Oh, baloney!

RE is regional. Different things for different sizes of homes, in different parts of the country. It depends if YOU feel like doing the work or not. Get an attorney, first. Almost all sales develop a snag, and you will have to maneuver the unpleasant negotiations yourself. Keep that in mind.

Then again, you have no guarantees that your realtor will be a good negotiator. It's a special skill that not too many people have. I worked in a large RE office, and found the RE business to be full of ironies. It seemed the the realtors who were smart, knowledgeable and had negotiating skills, had problems prospecting (getting clients). They lacked the "sales pitches".

The realtors who got a lot of clients were dumber than dirt, but their BS made them a lot of money. They appeared to be top producers. They would tell you what you wanted to hear. They knew how to list and then kept dropping the price. They had no idea why the property wasn't selling. Had no staging, or reasoning skills....but they could sell you the "Timbuktu Bridge", not negotiate it well for you, but sell it. Finding a well-rounded realtor is a difficult task.

Bedfordfred and others gave some good advice ;)

You can sell the house yourself. There are pitfalls, however:

-SOME realtors boycott your listing.
-Buyers approaching a FSBO are usually of an intelligent breed and expect to save the commission THEMSELVES, not you. They tend to be the fearless bargain hunters. You need a strong stomach to deal with these buyers, and hopefully have some negotiating skills. It's important that both parties are reasonable, and meet down the middle...
-MOST people prefer to work with a realtor and are embarrassed to deal with the owner. THIS is a big one, because most buyers don't understand that THEY are actually paying the commission, thru a higher pricetag not the seller. You can lose a lot of buyers due to this.

It is always beneficial to list your house thru a flat fee broker (offer 2-2.5% to the buyers agent)so the listing can reach everyone who has excess to the MLS. However, some realtors don't want to show those houses because they are upset that you didn't list it the traditional way, thru them. They claim that they have to do BOTH sides and more work....BALONEY, again!
The other side to this coin is that the realtors ARE desperate to make some money in this Recession, so I still think it's a good idea to go with a Flat fee broker.

Here are some regional and other variables that affect whether it will be easy or difficult to sell FSBO:
-starter homes sell faster, and it's easier to sell it without a realtor.
-location sells houses.
-decluttering and staging works!
-mid range prices (in my area 350k-700K) are the toughest to sell. People always have a little bit of money, or a lot of money, but the ones in between are the hardest hit and have the BIGGEST expectations, as they tend to be second or third time buyers.

    Bookmark   January 7, 2011 at 9:44AM
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sylviatexas1

I charge 4% when negotiating a FSBO sale or a sale where the seller is "represented" (entered into the MLS system) by a flat fee broker;
I'd charge 5% if I wanted to argue with the seller about representation for the same price.

It's very difficult on buyers & their agents to work a transaction when the seller has contracted with a flat fee brokerage;
the buyer's broker ends up negotiating directly with the seller, always a difficult proposition & sometimes a dangerous one, as well as doing almost everything a regular seller's broker would do a great deal of the work that ordinarily would be done by the seller's broker.

    Bookmark   January 7, 2011 at 12:12PM
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ncrealestateguy

I wonder what bought this post back up when the most recent post was from Sylviatexas on Jan 7, 2011?

    Bookmark   November 5, 2012 at 2:37PM
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sylviatexas1

don't know if this is what happened, but when someone posts spam on an existing thread & GW deletes the spam, the thread remains at the top.

    Bookmark   November 5, 2012 at 4:41PM
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ncrealestateguy

You're probably right.

    Bookmark   November 5, 2012 at 6:28PM
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sylviatexas1

Since it did come to the top, may as well update one bit of info:

Flat fee brokers in Texas now are required to "negotiate" according to the Real Estate Commission.

They usually put into the comments something like:
"Buyers' broker is NOT to negotiate with seller. Email offers & all other communication to broker with 'reply all'."

This gets the emails to the seller, who responds the same way.

Flat fee broker never looks at the emails, so the result is the same;

although the buyers' broker is not "negotiating directly with the seller"...
(s)he really is.

    Bookmark   November 6, 2012 at 9:39AM
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ncrealestateguy

I would force the flat fee broker to communicate with the seller for the negotiations if I were you. I would not "reply to all".

    Bookmark   November 6, 2012 at 10:15AM
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