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Comments for FSBO vs Realtors

Excerpt: I recently sold my home. Even knowing what I do about real estate, I used a Realtor. And unless your job is real estate, I’d suggest that you do as well. Read the whole article…

Kevin
October 19, 2003 9:20 AM

In my dealings with realtors, the real "advantage" has been that they are marketing the house. Not me. Plus they are keeping me safe from myself, in many ways, by not navigating down some channels that would otherwise open me up to a potentially sticky situation legally. Realtors are professionals. If you get a licensed one, then you're probably better off for it, I'd say. They know things that you couldn't even fathom. It makes a big difference. I can do my own stitches, too. But that doesn't mean I wouldn't rather have a medical professional do them. For the record, I am not a realtor currently, nor have I ever been one or desire to become one. I am not married to a realtor nor do I have realtors in my family.

Trackback from John's Jottings
October 20, 2003 7:31 PM

Selling your Home

Excerpt: Kelsey takes the For Sale By Owner model of home selling to task in FSBO vs. Realtors and concludes that unless you are in real estate yourself you should not be trying to sell your home without a Realtor. Rubbish. I won't comment on the FSBOSystems co...

Don Junkin
November 22, 2003 9:28 PM

In an effort to not discourage the consumer from using sites like ours and getting involved in the sale of their own home, I felt the need to counter a cheap shot. I have been interviewed several times this past year as CEO of FSBOsystems, and real estate expert on San Francisco's KRON channel 4. My standing in the industry is strong and my statements come from extensive domain expertise. Over the past 20 years I have bought and sold many FSBO properties, owned 2 real estate brokerages and 2 mortgage companies. I am not an extremist, but am certainly against convetionalizm when technology and consumer sophistication have exceeded the convention in any industry. To that, I must say, and I am not alone, that the comparisons to eTrade and Schwab are quite appropriate. Rob Black was the first to make this analogy on the air this past summer. When you consider the function and real value added of the realtor you'll agree. Regardless, with systems like our, the consumer wins. The winning comes from balance. When to use a professional and when to make the personal effort. Real Estate is not as complicated as the realtors would like you to think. This perception is what the realtor banks on, and banks big. The stats of the FSBO market representing 25% of all sales and the estimation that this be 40% by 2005 are taken from the NAR (National Association of Realtors). Yes, the percieved "other side". The NAR has also stated recently that billions are being wasted by the consumer in commissions, due to the high price of real estate, and the same effort needed to facilitate. For years consumers have been frustrated seeing a million dollar sale earning 10 times the commission of a $100,000 sale. The NAR went on that the dilution of quality of the agent/broker was also a concern. Becoming a realtor has a very low educational requirement, and they site the abundance of new licensees coming in from the unempoyment market. With minimum requirements (you can home study for 18 days and qualify to take the DRE test) desire is the only real difference between the realtor and the consumer. Of all things, real esatte experience is not a requirement to becoming a realtor. How insulting to the consumer when they are told by a realtor trying to get a listing that they can't handle the marketing, pricing, paperwork, etc. Today we see an increasing number of consumers who desire to take part in their transaction and save thousands of dollars. Wouldn't most consumers like to educate themselves for a week or so, seeksome advice from experienced people, and save 20, 40, 60 thousand dollars. Thanks to efforts like ours this is made increasingly possible. This is not to discount the value of the seasoned professional. I have said this before on TV and in seminars. the consumer needs to be aware though that only about 10% of the realtors are the real professionals and producers in mine and many others opinion. Most realtors will agree that 20% of their own do 80% of the business. There will most certainly always be the need for a professional in real estate transactions. The consumer just needs to be able to use them where appropriate and be prudent about the fee structure. Non conventional forward thinking individuals and companies such as our and Barry Diller, who have the consumer interests at heart, historically have been attacked. When there is no intelligent argument, some even stoop to infer a scam. Some mock what they do n ot understand. This is simply a bi-product of the distruptive nature of our efforts, but does not change reality. These attacks end up in vain though and the consumer ultimately wins. If those invloved in the real estate industry make statements and given information and opinions based on knowledge and consumer interests, rather than the special interests of associations and organizations, they would be less confusing to the consumer and not conatin so much drama, just useful information and direction. We encourage consumers and professionals alike to take advantage of what we are bringing to the market and be part of and support this evolution. Check us out onMonday.com

Michael L. Atkinson
November 24, 2003 9:08 AM

Kevin, FSBO is about taking control of your destiny and saving money. Selling your own home could be the best way to make money. By listing on the MLS (just like a realtor) and placing an ad in the newspaper (just like a realtor) asking a friend who is a mortgage broker to hold my open houses (because this is a great lead generator for her) and putting a FSBO sign in the grass and two open house signs on the corner (just like a realtor) seems pretty straight forward to me. I like FSBO because if I sell my home using the save tactics as a realtor, I am making money by not having them do simple tasks. Having said that, I fully expect to have a buyer be represented by a broker...in fact I understand from the NAR, that 90% of all homes are sold with a realtor involved. That's great for me and buyer reps deserve to be paid. If I end up saving $30,000 (3%) on a $1 million home because I hired a FSBO like onMonday.com to place my home on the MLS and take care of the paperwork for $395, bought lawn signs and called the newpaper...then that is found money. But, saving money does not happen without some time invested...FSBO isn' for everyone and neither is Tiffany's.

Ryan Castleberry
September 11, 2004 6:08 AM

Mr. atkinson I know you may think your doing everything an agent is or would and depending on which one you pick may be right. The problem is A. You will mostly deal with two types of people A. an unqualified one that an agent wont work with or a bargin hunter also looking to save money off commision that is why FSBO's sell on average for 2-4% less than listed homes. A qulified is going to hopefully start a marketing plan that is tried and true from there once they hit 90-100% of the market will start a bidding war. So if you have a million dollar home moving the offering price up 30,000 to get the house isnt unheard of. Now you have spent all of that money and spent all that time and effort for 0% savings.

Steve A.
September 15, 2004 9:55 AM

Real estate companies are similar to wine. 30 years ago when it wasn't possible to buy a decent bottle of wine at every major grocery store, it wasn't out of place for consumers to pay high prices in restaurants. Now that a multitude of wines are available everywhere, consumers are buying them, but restaurants haven't adjusted their pricing. I will never buy wine in a restaurant anymore until they adjust their prices. Real estate is the same. 30 years ago, before the advent of the Internet and personal computers, it would've been next to impossible for the average consumer to sell their house alone. That is no longer true, and Realtors haven't adjusted their pricing accordingly. I think most agents provide an invaluable service, but not for a whopping 6% of my home sale price. They certainly don't put that much work into a sale. I listed one home with a neighbor who had recently become an agent. Within 2 weeks, a buyer who was looking on their own found my house and bought it. I know my agent hadn't invested 8 hours worth of work and it cost me $10,000. On my last house, I used the same (national) agency and my house sat empty for 4 months. My agent "couldn't understand" why it didn't sell sooner, when other houses in my n'hood were selling in weeks. It was a 4 year old home and she was an experienced agent, but I still had to pay 4 extra mortgage payments and STILL had to pay the agency over $14,000. For what? I recently found an agent with an independent broker who is willing to list and sell my house for $300 as long as I use them to purchase my new home. Now that's a smart broker and you can bet I'll use them.

Stefan L
November 16, 2004 1:46 PM

Mr. Don Junkin, CEO of FSBOsystems likes to qoute from the NAR website. At the same time he fails to qoute the most important statistic regarding FSBO listings and that is that "the statistics show that the median FSBO (for-sale-by-owner) selling price in 2003 was 20 percent less than the median agent-assisted transaction price. The data demonstrates that sellers make more money by using a professional."

Glen McTavish
December 10, 2004 9:22 AM

As a Realtor in the Sedona AZ area, I have seen several interesting things happen recently. We are in a fast rising market - it will end up being about a 20% increase this year. We are affordable for Californians and people from TX, FL, NY and CT and our taxes are very low - less than 1%. And only 10% of Arizona can be privately held. All of this has led to an increasing feeding frenzy here. FSBO's do well here if they are priced right as so many buyers are driving around looking and the inventory is low. It is very important that they price their house accurately. Even then they cannot get the visibility to sell it at a great price. But it only take one buyer. I have worked with FSBO's a lot - after three weeks or so they are getting antsy to get a contract on their house, if they are really interested in selling, not fishing for comments on house nice their home is. Case#1 The very motivated sellers had a daughter, a single mom with 4 kids under 6 years old and needed to move 2 hours away to help out. They were at the back of the subdivision (low visibility), had a great house on sale for $230,000 in a planned community. I offered them a discounted listing side commission of 1.5% (full service except advertising) and kept the Buyer Brokers commission at 3% to insure showings. They also wanted $8000 for an almost new high end spa already installed. The day I listed it, I promoted it at our weekly Realtor's MLS meeting. An agent was looking for such a house for a CA buyer. The comps had just gone up, so I was able to get the sellers $250,000 inc the spa. They were very relieved and moved out almost immediately. Sellers cannot get on the MLS here and in most places, nor can they advertise their homes in the National four color real estate magazines. Case#2 Sellers had been trying to sell their house, first house inside the front gate of a subdivision for 1.5 years. They had listed twice during that time with discount / hybrid Brokers. I offered them again at total commission of 4.5%. They were totally frustrated at all the other houses around them selling. They knew that Realtors were driving by their house every day and not showing it. They called me back in a week, I listed it and got them to raise the price from $214,500 to $224,000, since at the time, it was the only house for sale in a great 256 home subdivision. We sold it in 10 days for $221,500. They were thrilled! Especially in a fast moving market, a good Realtor can bring up-to-date market comparables into the picture that a Seller (non agent) has no way of knowing. Real Estate is like a huge silent auction, and unfortunately many top Realtors price homes too high. It benefits no one and usually penalizes the seller. Through the greed of sellers and agents, we have created a whole false economy of increasing real estate equity. Consumer prices and wages are relatively stable, yet home prices are going through the roof. This cannot keep going indefinitely. The other thing fueling the boom is that the lenders are fighting each other to give buyers and investors with great credit variable rates as low as 1.0, 1.5 and 1.95 adjustable rate mortgages. And there are even interest only loans, and investor non-occupied loans from 2.9%. In a few years it will all come crashing down on us - it has to. So, my advice is to ride the equity wave while you can and then consolidate quickly. I totally agree that a Realtor should not be getting double the commission for doing the same amount of work that was done when the home was worth half as much five years ago. Commissions alone keep pushing house prices up since no one wants to lose money when they sell, so they have to recoup 6% commissions and about 3% in closing costs - that' almost 10% that the seller wants to build into his price. The National Association of Realtors predicted three years ago that with the increase in technology, the number of Realtors would drop by 40%. The opposite happened - people are coming into the profession in droves - three weeks of schooling, get a license and with no previous experience in real estate, you are now a licensed Realtor. I have also witnessed many young techo-savvy people coming into the business. I love working with FSBO's as they really want to save money. They just under estimate what it take to sell a house, including mounds of paperwork and personal exposure to unqualified lookers. My personal experience is that 80% of the time I call FSBO's their phone is not answered, or not by the person in charge. The deck is really stacked against them, at least until anyone can list on the MLS. God Bless anybody that goes the FSBO route...

Cytadia
February 23, 2005 8:34 PM

The thing is realtors are fighting for their very survival. Or at least the survival of their fat paychecks. What they do not realize is that technology has changed a lot of things and, more or less, has broken their monopoly. Now people can cut out the middlemen and make substantial savings. I have nothing against realtors and i believe their profession will always be needed for complex transactions or for people who have enough money to hire them... But sites like http://www.fsbo.com or http://www.cytadia.us are the future because they empower people by 1) giving them more freedom and 2) cnnecting them to a large audience of potential buyers.

Justin
March 10, 2005 12:02 PM

I had a friend that wanted to save money and not use a Realtor. Ended up selling his place 1 month and many grey hairs later, in a hot market, and paying out 3% on the buying side for $5,000 less than asking price. He was happy...until the very next week another place, exactly like his, went on the maket $20,000 more than his asking price and after it closed found out it sold for $20,000 over the asking price. At least he was happy for a week or so. If he would of paid commissions, even 6%, he would of netted $25,000 more. That's the thing about life, sometimes you never know what the outcome will be and until you feel the pain for yourself. There will always be FSBO's and there will always be people that use Realtors. I think the statistic show that 80% of all FSBO's eventually sell through a Realtor because they find it's a full-time job and they can't do it themselves. Also, I love when I hear that a Realtor's job is so easy and over paid, I should give you my friends contact info. By the way, for the FSBO's, what insurance company do they go through to cover themselves in case of a law suit? Because again, you never know what the outcome in life can bring. Cheers!

Dogger
May 13, 2005 3:43 PM

FSBO is not for everybody but it can save you a lot of money. The situation has to be right in order for you to sell you house by owner.... Do you have sufficient time before you have to move, are there other homes for sale in your neighborhood, is your neighborhood desirable, is your home the most expensive one around, what kind of shape is your home in..... Depending on how you answer these questions, FSBO might be an option. I have sold two homes myself and saved around $28,000. On the other hand, I have bought two homes and always used an agent, go figure....

Jessie Beaudoin
June 24, 2005 6:39 PM

I think that it's interesting to here this argument FSBO vs. REALTOR over and over. I have been a licensed mortgage broker and REALTOR for the last 14 years and have participated in 1000's of real estate transactions. First, in the past, FSBO's did not sell as quickly as REALTOR listed properties because they did not get the exposure. Now, with the internet and many of the for sale by owner sites or variations of; like http://craigslist.com or http://www.forsalebyownercenter.com enable home sellers to get their home viewed and in front of buyers. Regarding pricing their home, most assume that they do not know how to price their homes... guess what, they call a real estate agent, the REALTOR gives them comparable sales or CMA listing pitch and tell them how much they would sell their home for and then they price it based on that! Also, now they simply search the local MLS or realtor.com to look at what other homes in their area are listed for and they will price according to that. Also statistically, alot of the FSBO's are sold to family, friends, etc... so that are purposely selling their homes for less. Lastly, look at the NAR statistics, 1.1 million REALTORS, 1 person out of every 296 people in the US is a REALTOR... guess what, not all of them are professionals or full time! In fact, the average REALTOR sells less than 9 or so homes a year and many are part-timers... many FSBO's have personally owned and sold more homes than that in their lives! Sure, going FSBO is not for everyone but as time progresses and property values flatten-out or start decreasing (in bubble areas) you can rest assured many more people will consider other options as discount / limited service real estate companies, FSBO sites, etc. vs. using a traditional 6% real estate agent while the few really good real estate agents who truly know what they are doing will continue to sell homes and get 6% or more in commissions for their professional services.

MJ Oregon
July 2, 2005 1:34 AM

I'm simply a homeowner. I will buy through a realtor but with the sour experiences I have had, I wouldn't sell through one. Yes, an ethical realtor is suppose to represent the seller or buyer but ultimately I feel he represents himself. If he is representing the seller, does he really want you to know that there is an unrecorded easement across the land? Does he really care if, when a house is listed for 500K whether the owner gets 450K or 475K....when it comes down to it a realtor is pretty much guarenteed a certain amount of money for a listing (the bottom dollar) and anything else could be a lot of extra work for such a small return (ie the commission difference would be $1500 but it may require $2000 more in his advertising expenses and 50 more hours in time to show, negotiate, etc.) Is it worth it to him? NO. To the seller? Absolutely. I believe we will move more and more to a flat fee or hourly basis and would love to see it move on more quickly.

Gary David Hall
July 21, 2005 12:39 PM

I'm doing some research for a class I'm teaching on Anti-trust in Real Estate, and stumbled across this forum. I had to chip in my 2 cents worth. I used to be a Real Estate agent, doing production that put me in the top 1% of the country in volume, and always did it ethically. I know what I'm talking about. I have had a good many different kinds of jobs in my life, to include life insurance sales, computer operations manager, computer technician, and mortgage loan originator. I�m a bi-brain. I do detail, and am also creative. Real Estate sales, and this is not only my opinion, but common knowledge, is most likely the most complex sales transaction one experiences in their life, with the potential to be the most devastating financial loss one can endure in their life, if it goes wrong. Those that say it is not complex, are simply ignorant, or promoting an agenda. It gets MORE complex every year, and depending upon which state you are in, some are worse than others with regards to disclosures, inspections, and the like. It CAN be made more simple, if one does not prepare for all the potential pitfalls, because one does not know that they exist. That said, the majority of transactions go smoothly, and any agent with a half decent knowledge of the transaction, can facilitate it.. The balance though, is where a good, experienced, ethical Real Estate agent, is worth their weight in gold, as is any GOOD attorney, doctor, or accountant. The problem is that only about 5% of Real Estate licensees are both experienced and ethical, but that may be said of any profession. People that sell their home by themselves - FSBO's (For Sale By Owners), or with the limited aid of an ala-cart type of discount agency, are happy campers most of the time, when nothing goes wrong. What people do not understand is that you never know which transaction is not going to go smoothly. When it does not, the offended party is the first to scream bloody murder, and go after anyone involved. It�s not their fault for not hiring a professional, it�s someone else�s fault. If you�re on the other side of that panic, look out. Our society is not big on taking responsibility for ones own actions. The fact that it is a complex transaction means that doing it without experienced help makes it a crap shoot. Most of the time, you'll win. Not uncommonly, you can be in for one of the worst experiences of your life. Anyone that has been through it, will never sell "by owner", or with a limited service company again. It is just not worth it, financially, or mentally. The vast majority of consumers don't know, or don�t want to know about the not insignificant potential for the transaction from hell, or how devastating of an experience it can be, so they roll the dice. I�ve yet to see a fee for service company counsel the consumer on the possibility of a transaction gone south, communicate the potential for hell, since they are not using a professional. Why would they? They would be shooting themselves in the foot. Most FSBO's go in blindly. Many have done it several times, and it all went smoothly. God bless 'em. Hope they never see the other side of the coin. BUT - and you don�t hear the press touting this � a good deal of the time in a hot market especially - the FSBO UNDERVALUES their home. The only way to find out what the house should be listed at, is to have a GOOD agent do a Comparative Market Analysis, because the sellers do not have access to recent comparable sale prices. Courthouse records are infamous for being outdated, and again, that can be a huge loss in a hot market. In order to get that CMA, you have to lie to the agent doing it, stringing them along, to get it for free. And no, an appraisal is not good enough, again especially in a hot market, because it will most likely be under what could be gotten for the property. Appraisers may take issue with that statement, but I stand by it none-the-less, as I have experienced it many times both personally and professionally. An appraisal is by definition NOT an estimate of the POTENTIAL sale price. It is arrived at for many different reasons. Many times, it is not what the appraiser really thinks it is worth. It is what the person who hired them TELLS them to �come in� at. With regards to what someone charges, the higher the sale price, the lower the commission should be, granted, but HIGH, doesn't start low. Most active agents would no doubt take issue with that, but as I said, I tried to practice ethically. The expenses, stress, hours, responsibility, and depth and breadth of knowledge necessary to be a good agent, is every bit as demanding as any well paid profession, and more than most. Of all the jobs I had, Real Estate sales was far and away the most demanding and difficult for me � to do right. When I was grossing $160,000/yr. in commissions, I was netting, after advertising, board dues, administrative help, seminars & training, and a myriad of other expenses, around $120,000. That's $120,000 per year for 70 hours a week. Do the math. That's under $33/hr. And that's before paying the self employment SSI of 7.5%, your own medical, and various insurances. I got out, because it was not worth it. That said, I would not negotiate my commission down from my personal stated rate, until we started getting into the higher price ranges. My point, in extreme brevity, to the seller, was that I was as good an agent as they were going to find. If you want the best attorney or accountant - you pay top dollar. I wasn�t asking for any more than was common in my market, even though most of the agents getting paid it, weren�t worth it. I certainly would not be paid less than an inexperienced, unethical agent. Being what I have qualified as a "good" agent, is no different. If you want to take your chances that the transaction will go smoothly, hire a new, inexperienced agent, cheap, or a limited service agency, the former of which will not see the bumps coming down the road, and steer around them, or know what to do if the bridge is out, the latter of which is under no obligation to do so. Of course, if it's a limited service agency, and the poop hits the fan - who do you think will be the first person to be sued when it does? Even though the seller hired someone for almost nothing, to do almost nothing, they'll still go after them. You watch. I have nothing against ala-cart discount agencies in and of themselves. They do little, and they charge little. Fine. The problem is that people don't realize what they're not getting, until it's too late. I watched my clients try to shoot themselves in the foot in almost every transaction. How they priced their home; how they showed it; how they wanted to negotiate. If I wasn't there to protect them from themselves, who was? Attorneys that specialize in Real Estate can help with a good deal of the transaction, but not all of it. So the consumer is still left in the dark, ignorant, about important issues. When a FSBO has a Real Estate transaction that goes smoothly, that�s a wonderful thing. When it doesn�t � it�s a nightmare that can last a long time. And even if it goes well, there is a very good likelihood that they underpriced it. If that�s the case � then was all that stress and time worth it?

Karen Savage
September 7, 2005 4:07 PM

After reading these posts about FSBO experiences, I have to agree that you get what you pay for. It's simple folks, less money/less service (more legal risk, pray it doesn't come back to bite you and cause you to file bankruptcy), more money/more service (less legal risk, peace of mind from lawsuits). Transaction are getting more complex and costly because of regulations and unethical people, who don't disclose material facts (causing lawsuits for Deceptive Trade Practices). Whatever happened to telling the truth? Ethics - where have they gone to? I still practice them, anybody else? Throw the dice and pray for the best. Ask yourself: doo you want a 1st year med student performing open heart surgery (for a lower price) or a skilled surgeon (who can stop the bleeding and save your life)? Level of skill matters. It's just not filling out the paperwork for the ER admin. Don't be fooled into a quick sale is an easy sale. Yes,not everyone can afford those 6% commissions. But granted, I'd like to see everyone pay their own way - both sides (sellers and buyers). That's the only fair way. I would be equally thrilled if a 6% commission didn't have to be split between 4 people. Come on--those BIG COMMISSION CHECKS are not only for 1 agent. The listing agent/broker (2 people) and buyer's agent/broker (2 more people) have to split that 6% fee (ex: $100,000 X 6% commission = $6,000 divided by 4 people = 1,500 each (for a 50/50% split). Don't forget taxes (self employment, expenses, etc.). This whole idea of overly paid fat cats in real estate is so stupid. We are really quite underpaid. Get rid of the brokers profitability (on each side) and just let the 2 agents get the entire fee split (down to 4 percent from 6 percent), minus a $150 transaction fee paid to each broker. That would solve a bunch of this mess. Have sellers and buyers both pay 2% each up to $330,000 (jumbo loan point) then a flat structured fee after that. Then, how about actually EDUCATING people on how the process works. The system currently in place is outdated, stressful, and lacks standardization. It would be great if all states practiced real estate the same. But laws/requirements vary by area and custom. It's a total nightmare - the equivelant of having IRS rules different in every friggin' state. Realtors are not respected by the general public. The media has a field day bashing us (all of us...some not deserved). When was the last time your doctor was ridiculed for the high costs of medicine and prescriptions? I didn't cause the high costs of commissions! (That's the free market system in action) Don't shoot the messenger just because you don't like the answer. I encourage anyone with half a brain, who has the perfect 'dream' real estate company vision in their head, to e-mail me their thoughts and comments to: thejungle@karensavage-realtor.com. I want to change the industry for the better, but I need your input to do so. Don't like what you see? Then, help me and others change it for the better!! Visit my website and leave me a e-mail: http://www.KarenSavage-REALTOR.com, Keller Williams Realty/Conroe, TX (north of the Greater Houston Metro Area)....posted 9/7/5, 6:02 pm CST Thank you for your input! It matters to me.

Dana
November 20, 2005 7:17 PM

I am a full-time realtor and will say that most fsbo sellers have it all wrong. They are so concerned about what they hope they can save in commissions rather than understanding what will be gained by using a full time professional who works real estate DAILY. They say, "Oh I sold my home without a real estate agent and saved soooo much money" When in reality they NETTED (meaning at the end of the day, what they put in their pocket) the SAME OR LESS in profit,usually takes them twice as long to close the transaction and still have to do all the work themselves and yes, selling a home is work. I agree with Gary up there. The percieved savings to the fsbo (which by the end of the day usually isn't even worth the time and energy spent not to mention the other potiental risk). Why would anyone risk rolling the dice with the largest investment most people have,their home.

chris Jensen
December 2, 2005 12:21 AM

I must say that after reding through the lines,fsbo is the way to go. Many of my friends saved alot of money and were not friends of the fsbo agent. Thanks God this out there though realtors don't like the threat.

LW
December 6, 2005 2:15 PM

I am currently selling my house as a FSBO. I am not in a rush so i could care less how long it takes as long as i get a good price. If i were in a rush yes i would list it. I am paying for my own marketing which is far less expensive than paying an agent 6% to just list it on the MLS. Yes I will have to do more work, yes it will take longer for me to sell. Most agents just want to quickly close the deal not caring about your house value. They owe their client loyalty, etc but get real, they just want to get paid. Any idiot can sell real estate and get a license. I prefer to do it myself and tsake more pride in it then someone who doesnt know my home as well. So go away greedy real estate agents we will be successful as FSBOS

John
January 4, 2006 8:06 PM

This is all very interesting discussion. How about something in the middle. I found a site called AdvancedFSBOMarketing.com which offers home sellers who want to sell thier own home with all the marketing items that realtors use. It's not the slickest looking site but seems to offer people an option somewhere in the middle that make sense. All these statistics flying around are rediculous. Didn't anyone who is contributing to this blog go to college. Aren't you supposed to source your information when you make such a claim. People seem to just want to push thier own agendas, at least back it up with real studies and facts that are sourced. Doesn't anyone remember the ABA or MLA standards?

Adam Kalsey
January 4, 2006 9:08 PM

John, while criticizing others for pushing their own agendas isn't being entirely honest himself. He didn't just happen to find that Web site; according to whois records he owns it: http://www.samspade.org/t/lookat?a=AdvancedFSBOMarketing.com The email address there is the same one that he used to make his comment.

Karim Mitha
January 10, 2006 10:11 AM

Good day, We want to be in your affinity program, listed on your web site. How do we do this? We provide affordable web design services at $10/hour, see ( www.affordableprogrammers.com ). We have several designers and programmers with experience in MLS and the real estate industry, including IDX and RETS. Please email or phone me. Regards, Karim. Tel: 416-907-4610 Fax: (416) 628-3145 e-mail: karim.mitha@affordableprogrammers.com

Jeff Olson
January 11, 2006 1:31 PM

I am a full time real estate professional and I thought I would chime in. The key is to get an experienced realtor. It is true that we occasionally work with sellers directly but the vast majority do not know the process whatsoever. It is not an insult but I would not walk into their profession and assume that I know as much as they do. We do this every day. If we can work with a professional on the other side of the transaction, we will. As far as saving money, MLS listed and sold properties will net the seller more money than fsbo's by far. I market my homes on hundreds of websites, television, mailings, relocation depts., etc. I average about 15-20% more than fsbo's in our area. I average 15-20 sales from fsbo's per year. Some fsbo's may sell but it is foolish to think they saved 6% when really they may have lost 10%. I will not even get into the legal complications that may arise. To get top dollar you will need to list w/ a realtor. Just be sure to choose an experienced and hard working one.

Randy James
January 29, 2006 10:02 PM

These days the benefit of a REALTOR depends on what they can bring to the table for the home seller. An agent earns their commission when the effectively market their listings. That includes developing marketing strategies and promotions that get attention to the FSBO. Unless an agent is willing to perform this service to the home homeowner, they provide very little value add for the service. -Randy www.4MySales.com

Stephanie
February 5, 2006 5:37 PM

Randy, In your words... "Unless an agent is willing to perform this service to the home homeowner, they provide very little value add for the service." Are you kidding me? Really? Isn't that what agents are hired to do? The only time I have ever run into a problem with an unwilling agent is when the seller listed with an a la cart or discount broker and even most of them are good at what they do. The only negative I see to those willing to reduce their commission is that they don't see value in their education and experience. Would you take a job at less than minimum wage? I doubt it! And do you know what the statistics are of the FSBO who failed and decided to go with a professional? I do not but I can tell you that every week or so, I pass a house that was FSBO for about a month maybe 2 and then I see they listed with a company...and then it's sold within a few weeks! Ironic huh?

kevin kelly
February 11, 2006 12:01 PM

I hope you do not think people believe this information.(blog)

Steve
March 20, 2006 12:26 PM

Sometimes it depends on the market. When every decent home sells right away, the usefullness of a realtor is lessened, so why not try the "for sale by owner" route?

Patrick Brown
May 3, 2006 5:07 PM

The median for-sale-by-owner (FSBO) selling price in 2004 was 15.4 percent less than the median agent-assisted transaction price. It appears that sellers wanting to save money by not using an agent are losing money in lower sales prices. The median price of FSBO sales in 2004 was $163,800 compared with $189,000 for agent-assisted sales.

jessie b
May 5, 2006 2:59 PM

Here is a mortgage calculator that shows the savings of selling FSBO vs. REALTOR: http://www.forsalebyownercenter.com/tools/fsbovsfullservicenetproceedscalculator.aspx

Heather Adams
May 10, 2006 11:13 PM

You are right on the money with this one. Well said! Heather Adams http://www.fsbo4now.com

For Sale by Owner Center
June 19, 2006 9:04 AM

The idea that FSBO sell for 15.4% less is the "median" sells price. The "median" is the point where half the homes sell for more, half sell for less. If you have about 900,000 FSBO's to average vs. 5-6 million "realtor" transactions, statistically is a much higher chance that sheer number of realtor transactions will skew the "median". It only takes one or two 5 or 10 million NYC condos to skew the average. The NAR has never released the data set as to how they arrived at these findings but yet, all 1 million REALTORS use it as gospel (when they don't know the difference between "median" and "mean") . Also, according to statistical laws... the "median" calculations have an error of +- to 25%. Don't believe the creative "enron" statistics from the NAR... the 900,000 FSBO a year means that REALTORS lose about 12 Billion in real estate commissions, that's why they try to discourage FSBO's

Bob
June 25, 2006 7:29 AM

I thought I would chime in on an earlier suggestion of paying the broker's $150 each and letting the agents split the rest of the 6%. First of all, it is very expensive, and legally risky to be a broker. Marketing, rent, staff, office supplies, etc. add up in a hurry. Despite popular belief, a broker does not net that much on real estate transactions. On average, brokers net about $150 per transaction. It is a very low margin business for the broker. This is why so many are turning towards "margin enhancers" like mortgage and title affiliations.

Jim
July 2, 2006 5:35 PM

Consider this: An agent who conducts 10 transactions a year, and does it all for 1% will make less than $20k a year. That's assuming all his homes are $200k and he has a 70/30 split with the broker: $200k * 10 * 1% * 0.7 = $14k Even if he does 30 transactions, that's $42k a year. The rediculous amount of legwork required to do this much prospecting would discourage anybody except the shady agents who provide absolutely no service. That's not even counting the fact that many people will shamelessly waste a buyer's agent time and never buy anything, so you have to make up for that too. I'm an agent now, and I too used to think they made a lot before I got into the biz, but now I realize just how much work goes into it. People gladly pay for $200 pair of jeans but they're not willing to pay an extra 2% commission to a person who can probably get them 5% more in their pocket and save them from legal trouble.

Get Title Insurance
July 10, 2006 10:14 AM

FSBO or no, the bottom line is that all consumers hope to address financial savings and profit maximizing concerns to keep as much of their hard-earned money in their pockets at closing, whether or not they sell their home via FSBO or with a great agent. News coverage across the U.S. has indicated that many sellers are beginning to lower listing prices to compete and move their properties. However, where title insurance is concerned, many consumers doing a FSBO as well as those working with a real estate professional are not aware of the critical role that other services play and how much they can save. Title insurance plays a huge part in any transaction and is costly - most consumers do not know that they are able to shop around for the best price and service. Instead, the majority depend upon third parties to do so on their behalf which often results in paying much more than necessary - because of the unregulated discretionary fees not regulated by the state. There's a new online service called Get Title Insurance that helps consumers (as well as Realtors, financial professionals and attorneys on behalf of clients) request and receive multiple quotes for title insurance online. It is the first and only site to provide all parties access to the quote online, the first to offer multiple, unlimited quotes for the benefit of both the consumer (WHY limit them? If you went to buy a BMW in Texas, they don't tell you that you can only go to 4 or 5 dealerships. As a consumer you can compare and shop around.) The site is also the first and only one to integrate a customer feedback rating system for title professionals, adding multiple benefits: an accountability feature for the title pros, peer insight for the consumer, and confidence in their recommendation for the Realtor or attorney using it on behalf of a client. Get Title Insurance provides consumers with a complete quote, not just the filed premium rates. Get Title Insurance is the first to offer a consumer reward direct from the company within 10 days of a successful close of a transaction offline with a title professional registered as a provider on the site. The company hopes the consumer will view the reward as a mechanism that reduces their overall closing costs. It's totally free to the consumer which is great! www.gettitleinsurance.com

Cathy
July 11, 2006 4:02 AM

I totally agree, I am an investor and have been for many years, and have seen FSBO houses fail so much, and go for lower prices than actually valued. But it's a good deal for me so I say keep the FSBO.

Joe
July 15, 2006 12:07 PM

FSBOs are ultimately a waste of time for several reasons: 1. The newspaper and FSBO website ads can cost as much, or even more than the deep discount brokers who put the listing on MLS. Might as well use an ala carte service from some cheap broker. 2. In a stable or buyer's market, you HAVE to offer a buyer's agent commission or your house will get overlooked. Buyer's agency is becoming a big part of real estate and more and more people are turning to agents to sort through the 100s or 1000s of homes on the market in a give city. 3. Buyers know you're trying to save on commission, so they will want a piece of the pie. They'll negotiate HARD knowing that you have no listing agent to give you timely market research and that you're probably getting very few qualified buyers so you're desperate to sell. 4. A lot of FSBOs, at least here in Austin, are doing something very strange. They price their home BELOW what it should go for, even after accounting for commissions, and use that as an excuse for not paying a buyer's agent commission. The whole "we have no commissions so we'll pass the savings on to you" plan is stupid. What's the point of doing a FSBO then if you pass your supposed savings to the buyer. It seems most FSBOs are either naive people who have no clue how the real estate market works. They try it, quickly give up and then sell through an agent and are happy. Others are just pissed at the world for some reason, and they're best avoided anyway..as they are bitter and will be hard to negotiate with.

Allyn
July 18, 2006 7:19 PM

FSBO's are regular people like you and me. They want the choice of selling their property by themselves. They want to get paid the true value of their home. Why not...don't you? I have introduced a strategy on www.bizchamps.com that is perfect for FSBO's and for agents They can sell their home at full appraised value and have everyone win, or an agent can list a property by knowing this strategy and help out sellers that NEED TO SELL NOW. This strategy also opens up for buyers and for agents many more homes that have equity in it. Take a look. Take a look and if you need FREE coaching just sign up for it.

Mark Camphaug
July 25, 2006 9:58 PM

For Sale by Owner is the fastest growing area in the real estate sector and that scares the crap out of realtors. Thousands of homeowners have successfully sold their homes and saved literally thousands of dollars in real estate fees. Realtors will tell you that FSBO isn't for everyone, they will even resort to scare tactics to steer you away from FSBO - but for the homeowners that are successful the savings are significant. Did you know that there was 91 BILLION dollars paid last year in real estate commissions!!!! So you truly appreciate the magnitude of that number, that is 91 BILLION dollars in lost homeowners equity. I have done some research (internet based) into the FSBO phenomena (Google returns 38 million sites based on a search for "FSBO"). While the general concept remains intact (home owners selling their own homes) the approach, presentation, fees, options, etc literally run the gambit. The most noticeable consistency I noticed was the overall unprofessionalism and downright ugliness of most sites. Some were so ugly it was shocking - they looked like sites developed by Grade 3 students. From my experience in sales and marketing you only get one chance to make a good first impression - most FSBO sites miss the mark significantly on this point. I did come across a few sites that have embraced the concept one in particular was FREE! While many FSBO sites claim to offer "FREE FSBO" there is only one that actually delivers that claim. The site is www.freefsbo.com - they offer a Free FSBO Kit that includes a professional lawn sign that actually looks good (and modern), a free online listing complete with unlimited pictures, full feature sheet and some FSBO tips that were somewhat helpful. The bizarre thing is the FSBO Kit, as advertised, is actually free. There is no bait and switch, nothing underhanded whatsoever - there is no "upcharge" to put in your contact information, no fee to expedite the listing, no fees to upload pictures, or any fees to get a "better" webpage. The way they do this is simple - they sell your name to companies that want to solicit business from home owners - big deal. I have gotten less for more. No idea who buys this information, I suspect moving companies, legal forms, mortgage brokers - I'm sure realtors are likely lined up to buy this information. Anyways, I personally don't have a problem with it. Please note they are very upfront about what they do. Anyways just a opportunity to get something for nothing - pretty rare these days :). PS, I signed up, my webpage was active within 3 days and I received my lawn sign via UPS within 5 days and it cost me nothing.

Mark C
July 25, 2006 9:59 PM

For Sale by Owner is the fastest growing area in the real estate sector and that scares the crap out of realtors. Thousands of homeowners have successfully sold their homes and saved literally thousands of dollars in real estate fees. Realtors will tell you that FSBO isn't for everyone, they will even resort to scare tactics to steer you away from FSBO - but for the homeowners that are successful the savings are significant. Did you know that there was 91 BILLION dollars paid last year in real estate commissions!!!! So you truly appreciate the magnitude of that number, that is 91 BILLION dollars in lost homeowners equity. I have done some research (internet based) into the FSBO phenomena (Google returns 38 million sites based on a search for "FSBO"). While the general concept remains intact (home owners selling their own homes) the approach, presentation, fees, options, etc literally run the gambit. The most noticeable consistency I noticed was the overall unprofessionalism and downright ugliness of most sites. Some were so ugly it was shocking - they looked like sites developed by Grade 3 students. From my experience in sales and marketing you only get one chance to make a good first impression - most FSBO sites miss the mark significantly on this point. I did come across a few sites that have embraced the concept one in particular was FREE! While many FSBO sites claim to offer "FREE FSBO" there is only one that actually delivers that claim. The site is www.freefsbo.com - they offer a Free FSBO Kit that includes a professional lawn sign that actually looks good (and modern), a free online listing complete with unlimited pictures, full feature sheet and some FSBO tips that were somewhat helpful. The bizarre thing is the FSBO Kit, as advertised, is actually free. There is no bait and switch, nothing underhanded whatsoever - there is no "upcharge" to put in your contact information, no fee to expedite the listing, no fees to upload pictures, or any fees to get a "better" webpage. The way they do this is simple - they sell your name to companies that want to solicit business from home owners - big deal. I have gotten less for more. No idea who buys this information, I suspect moving companies, legal forms, mortgage brokers - I'm sure realtors are likely lined up to buy this information. Anyways, I personally don't have a problem with it. Please note they are very upfront about what they do. Anyways just a opportunity to get something for nothing - pretty rare these days :). PS, I signed up, my webpage was active within 3 days and I received my lawn sign via UPS within 5 days and it cost me nothing.

Tony
July 26, 2006 10:00 PM

Thank you Marc C - but what happened? You say that it was all free etc. - but did you sell your house?

Nick F.
July 29, 2006 9:42 AM

I'm a realtor, and FSBO's don't scare me at all. This is a free market economy, and people are welcome to buy or not buy whatever service they want. The fact that most FSBOs fail and most discount brokers just plain and simple suck is why there are still full service agents around. Someone metioned "save thousands by doing research for a week". That's the problem, most people think doing real estate is reading a few easy books for a week and nothing else. They're the same people who complain that doctors make too much, lawyers make too much, etc. Real estate is very hard work and most agents never make it. I think that's proof enough that it's not an easy field.

Mark C
August 1, 2006 10:48 AM

Not yet, we’ve had 12 calls and 3 showings though. I'm trying to track where they are originating from – marketing wise - but it’s difficult. My lawn sign (drive bys) has my phone number and an FSBO reference # from FREEFSBO.com and I have run a short classified ad in the local paper - I don't have much in the ad, just FOR SALE BY OWNER and some minor details like location, style and price - then I direct them to www.freefsbo.com and my assigned FSBO#. Unfortunately I can't go in and check how many people come via my classified ad (the scourge of print media) but it's cheap (like $7 a week). I also plan on running the same classified in the city paper ($60/week) but significantly better circulation numbers and lots of people are moving this way from the city. FreeFSBO.com is supposed to be launching an online tracking software so I can see where traffic is originating from on my online listing but it’s not up yet. The website helps a lot!! We couldn’t afford to pay for that content and presentation (pictures) in print. Of course I have received calls from local realtors - my mother is a realtor, so I know and understand the game. I have my house listed at $549,000 so the potential savings in real estate fees is $30K which leaves me a lot of room to market ($$$ wise). Additionally we are in a real strong real estate market – most homes are sold within 30 days (if they are priced right) – I figure if I spend $2K advertising I will be spending $1.5K more then a local realtor would. Anyways, I have an Open House coming up – a realtor friend has offered me $50 for full contact information of anyone that shows up (think it’s against FreeFSBO.com TOS though) - so hopefully we’ll get some interest. All things considered I’m optimistic about selling my own home with FreeFSBO.com. Like I said earlier, my mother is a realtor and has been for 30 years; I grew up with it and I have been in sales for 20 years myself. I'm confident that I can save $25K in real estate commissions - maybe buy that boat I’ve always wanted:).

Nick F
August 3, 2006 9:09 AM

Mark C: "Additionally we are in a real strong real estate market – most homes are sold within 30 days (if they are priced right) – I figure if I spend $2K advertising I will be spending $1.5K more then a local realtor would." ...is a statement that only applies if you compare one realtor to another, not realtor to FSBO. You have no idea how much more effective MLS, plus REALTOR.COM is. The whole point is that an agent can spend $500 on all advertising and still get hundreds more people looking at your home than you can. Newspapers are worthless for ads. It's not how much money you spend, it's how much TARGETED exposure you get, and nothing beats the MLS for that. Be careful, most people who shop for FSBO homes will try to take advantage of you and knock the price down. I've heard tons of stories from fsbo's about that. Not saying it can't be done, but it's ineffective. Just like most people don't do their own car maintenance, although it can be done in principle.

Mark C
August 5, 2006 10:39 AM

Like I said, we are in a very strong market – particularly in my price range. I would be stupid to argue that MLS and Realtor.com isn’t helpful – but at what cost? The realty is that realtors livelihood is now being challenged by the internet. Prior to the internet the MLS system was exclusive to realtors. Realtor.com is a byproduct of that MLS system - it has benefited greatly by the internet. I think it’s very fair to compare FSBO to a realtor – the bottom line is how much you net from the sale of your home. That is the new battle cry of a Realtor against FSBO - you get less for your home. My experience with realtors is that they are professional price lowerers – get the homeowner to lower the price until it sells – they get 6% less of the sale price – 10K = $600 – the homeowner gets $10 less - please explain to me where the greatest motivation to get top dollar for the home lies – with the agent or homeowner. If realtors spent as much time selling as they spent convincing the homeowner to lower their list price to sell it they would be infinitely more successfully at their jobs. A significant number of realtors are newbies with no prior sales experience - I like my chances better then theirs - and I can save up to $25K. Don't get me wrong FSBO isn't for everyone - but I am confident I can sell my home. FreeFSBO.com simply provided me the FSBO Kit to help me market my home. I don't for a second think they are providing better representation then a realtor would - but it's FREE not 6% of my home equity which in my case is $25K!!!! I find it very interesting that realtors are now eating their own by legally challenging discount brokers - they are scared sh*tless - if they aren't they should be.

Allyn
August 6, 2006 6:02 AM

Hi...I have been reading the latest comments on FSBO's and I am going to present this: OWNER FINANCING..."Owner Cashes Out at Close"...you can look up this strategy on www.bizchamps.com. You will attract 20-30% more buyers and have the opportunity to have multiple offers, choose your buyer, and close quickly. FREE COACHING on how to use this exit strategy, and FREE ASSISTANCE all the way through the sale. Why? Because I buy real estate notes. This strategy is not known by 95% plus realtors in the market today. How do I know that? Because I teach and train Attorneys, Realtors, Mortgage Brokers, Investors, Home Owners how to buy and sell real estate using this method. Call me anytime. 866-619-5904

BJ
August 16, 2006 6:42 AM

Hey, what is the complaint? There are times when a realtor is necessary,ie big payment, big house & you need the exposure. Times when I do a fixer upper, I can sit on it 3 or 4 months (but that hasn't happened). Then there are those who must be lead around to areas because the realtor is the expert. I would NEVER go around a realtor & cheat them out of their commission. There are just some times when the profit margin is too small to use an agent! Use them when you can afford it!

Jim P
August 25, 2006 1:38 PM

Just a few stats to let you in on reality. First, last year the market was booming and a FSBO could sell within 2-4 weeks (REALTORS were selling in 2-4 days), unfortunately for FSBO's that was last year. In my area the average market time is about 40 days (70 -90+ on homes over $400K) and FSBO's that actually manage to sell are almost twice that. Acording to local tax record FSBO's in my area sell for about 17% less than when using a REALTOR. Doesn't take a genius to do the math and realize that they lost 11% on average since they were too cheap to use an agent. Next, FSBO companies know that their customers will get offers at least 6-10% below market just as a starting pont and inflate their so called "comps" to reflect that. On average FSBO's in my area are priced 10-20% ABOVE market and unfortunately the are conned into thinking that is what their home is worth. About 80-85% of all homes are sold with an agent and a commission is paid. That means if your house is worth $200K on the market and you don't use an agent it's now worth $188K to a potential buyer. You're not paying commission, why should they? You're going to pay $2K for an ad? Just ONE ad? As an agent I pay that (and more) the other 70 agents in my office pay that, and the other 5000 agents in my company pay that. That's 5000 ads all trying to get the phone ring to sell your property. 5000 to 1. Who do you think is going to sell first, you or your neighbor Bob that listed with me? Who's going to bring more potential buyers? More "qualified" leads? Who's going to know which mortgage companies are good, and which almost never make it to closing? I know on the surface that FSBO sounds good, and if you have all the time in the world to sit by the phone for three or four calls a month (compared to the hundreds I recieve), don't mind getting offers 10% below market, or trying to screen out the non-qualified professional home shoppers, then FSBO is the right way to go. And these new companies that will put you on the MLS for a flat fee are a waste of money. There is still no commission to be made and agents will not usually waste their time (you don't work for free either, I assume), most of the info is not accuarate, most sites that claim to offer the full mls listing don't (it's illeagal for them to have access to agent only remarks, for instance) and most are so outdated it's pitiful. And last, FSBO companies are there to make money as well. And unlike agents, their are no government agencies keeping tabs on them to make sure everything is on the up and up. No test they have to take, not even an ethics class they have to sit through. Did you know that you have to follow all the fair housing laws and rules just like I do? Did you kow you can't discriminate, or use certain phrases in your advertising? That you could be fined severly for breaking these laws? If not, your free FSBO company isn't doing you any favors. Granted, my pinion may be a little biased, but accuarate just the same.

Dan
October 26, 2006 10:20 AM

Q:What happens to all those FSBO sellers when the market gets slow? A:They finally open their wallets It's very true, look around your neighborhood right now. Do you see many FSBOs?

Patti
November 1, 2006 7:32 AM

FSBO's are successful some of the time--but according to NAR (National Association of Realtors) statistics the median selling price of a FSBO was $198,200 compared with $230,000 for agent assisted home sales. Entreprenaurs who undertake selling their homes, generally--and I stress generally because there are exceptions--have unrealistic market expectations and it is reflected first in price. FSBO's objective is to "save the commission". Two people cannot save the same commission. The seller generally ends up paying the commission to the buyer in the form of a lower price. The world is a busy place--time is money--those who have the time to search out fsbo websites, newspaper ads or drive around seeking signs are looking for a "steal of a deal". They have the same mentality as the owner--they want to save money. A Realtor's job doesn't end with signed contracts--that is actually the easiest part of the deal. Keeping it together is the hardest part. Negotiating home inspection or appraisal issues, or surprises at the final walk-through before closing. There are many other issues, but anyone without Ethics, Law of Agency, contract expertise, Fair Housing expertise, and all the other legalities associated with this intense and complex transaction are, for relative little money, taking on another full time job and putting their financial future at risk. Patti

Mark C
November 9, 2006 6:51 PM

Nice to see all the realtors are present and accounted for :) - Always with their Realtor propaganda machine. They used to try to scare the crap out of people by claiming FSBO's were exposing themselves to potential criminals > when in reality realtors DO NOT SCREEN their clients prior to a showing. Now they are making claims that FSBO's are significantly undersold. I guess they are scared because they know full well, that with virtually no education, outside of a college level real estate course that they could never make a comparable living ANYWHERE else! To Dan – when the market slows down, FSBO’s are in a much better position to lower their price then a realtor listed home – they don’t have to pay 6% to one of you!!! From my experience, and it is significant, I have worked in the new home building industry for 15 years and personally bought and sold 5 properties and my mother is a realtor (A very good one I might add) most are professional price lowers. They have no idea how to follow up on a lead. Most have no sales training whatsoever. Anyways, you Realtors keep rattling your chains and scaring homebuyer with your BS. I don’t think it’s a coincidence that the real estate association are running a national anti-FSBO campaign – gee could it be cause they are scared and revert to the standard scare tactics. GO FSBO – GO www.FREEFSBO.com – save your hard earned money!

Jim Stewart
November 14, 2006 5:22 AM

Let me start by saying "There are no absolutes". Which means there is not one perfect way for all situations? There three types of sellers. The seller who knows time is money and has no desire to be involved in the marketing, selling and showing of his/her home. The other buyer doesn't have enough equity in their home to afford a real state agent. The third type of seller has maintained the home and wants to get the most out of it without paying a commission. Each type of seller has their place in the market and no one seller is better off then the other. Technology has changed how we buy and sell real estate in this country. Real estate agents are no longer the "Gate Keepers". Buyers are finding their own homes on the internet. Sellers are capable of filling in the blanks of the contract, addendums and disclosures. Real estate agents still provide three key ingredients that sellers cannot do themselves. They can expose their home to the world via the MLS. They provide the availability to show when a seller cannot (while they are at work, vacation, socializing etc). Finally they do have the process down to a science. They can expedite and streamline the process while working out the various kinks that always arise. They know who to call for various situations and they eliminate the "Junk Fee's". The latest trend is towards selling a home is "Discount Brokering". Brokers are drastically discounting the commission. They usually keep the commission to the selling agent higher and lower the listing agents side. This way they get the listing which generates phone calls which increases sales overall. The commission for the buyer’s agent is motivating and the buyer can still save thousands. It is an all around good solution for everyone. There is plenty of room out there for all of us and every situation is unique. I encourage FSBO to allow one time showings from real estate agents with approved buyers and place that information on their advertisement. This will also entice buyers who are apprehensive about buying a FSBO because they are unfamiliar with the process. I encourage agents to provide FSBO with free advice and CMA's to help them determine the best price while keeping the sale legal and ethical. Let FSBO know that you will coordinate the closing for a nominal fee. All of this keeps our profession respectful and provides a good service to the consumer. An agent can spend a lot of money advertising and marketing but establishing a good reputation is priceless!

Shawn Doucette
November 16, 2006 1:23 AM

Private sale right for you? Sitting there wondering which is the best way to market your home? Here are some things to consider. Private home sale is growing here not because its the right marketing system for every one of you, but because its the right option for most of you. Every year, more of you go private than the year before. Thats a statistical fact. In time, the private sale market will surpass the MLS. Its a simple matter of self-interest. Youve made For Sale By Owner NB the only growing segment of the New Brunswick residential resale market because most of you think that $20,000 or $12,000 or $8,000 of your homes equity is a lot of money to lose to a commission. Private sale is right for you if you understand that the real estate market is an economic tide that lifts the price of all homes on the market (or, in a tight market, lowers all home prices). You understand that the marketplace (thats really you and everyone else shopping for a house) and the mortgage lenders who have to approve your loan, dont care how a house is marketed. Either the house and the price are right or theyre not. Private sale is right for you if you think you know more about your home than any realtor will ever know. Its right for you if you resent the scare tactics designed to keep you from selling your home yourself. You think they are an insult to your intelligence. Its right for you if you personally know one of the hundreds of people who are already successful For Sale By Owner NB clients. For you, the myth that the Multiple Listing Service and that high commissions are necessary, has been shattered for all time. And its right for you if it has occurred to you that the only reason the private sales market has grown is because it works. The competition suggests that each private sale is a fluke. But hundreds of flukes later, its clear private sale is here to stay. And most of all, private sale is right for you if you understand this one immutable truth: If your asking price is in the ballpark, your home will sell; if its not, it wont, no matter how much or how little youre paying to market it. So, if youre still wondering which way to go, just do the arithmetic: How much would you walk away with if For Sale By Owner NB helped you sell your home or if you paid a Realtor to do it? Best Regards Shawn A. Doucette President For Sale By Owner NB Ltd. 658-0000 www.forsalebyownernb.com

Bruce Fournier
November 21, 2006 3:52 PM

I have worked with for sale by owners and found them to be quite friendly and a great source of business.Thier home is on the market along with all the other homes and watch for an opprtunity to sell the home for a fee that is fair. If they don't want to pay my fee, I don't try to sell the home. I offer to help with any paper work, ect. What ever I can do. I get leads for Buyers, I have the opportunity to sell them a home or I often get the call to list the home. I see it this way; it's thier home they can take a chance or hire me.

Mark C
December 5, 2006 9:20 PM

Most FSBO listings that I have come across in the last little while are open to, and generally offer right on their listing a “buyer commission” or an invitation to cooperate with a “buyer agent”. It appears most are quite happy with the 3% listing agent savings, which amounts to @ $8500+ (nothing to sneeze at) on the average home sale. Most have paid the fee for of Flat Rate MLS listing (Realtors breaking rank) to take advantage of the additional exposure that Realtors enjoy over FSBO’s. I agree, many homeowners are simply not cut out to successfully list and sell their own home and expect to save the entire 6% real estate commission. I do however feel that a Flat Rate MLS and an agreement to pay a Realtor a pre-agreed upon percentage to bring them a buyer and negotiate a successful sale is very realist. Realtors, especially in large cities where the majority of home sales take place, rarely “double-end” (list and sell) a home sale. Typically they are splitting the commission between themselves and another agent (listing agent and selling agent) so a Flat Rate MLS really doesn’t appear to cost them anything. If their client wants to buy a FSBO with a Flat Rate MLS they show it, write up an offer and sell it and collect their regular commission. It does, however, affect them in the long run and their association is well aware of this, it could take a large chunk of their collective revenue if they simply became “Buyer Agents” and were only able to collect half the commission on each home. That explains why they are legally challenging their own (Discount Brokers and Flat Rate MLS brokers). Discount Brokers are registered Realtors that have decided they can do the same for less, or they are relying on volume or simply have a lower standard of living then other realtors (go figure). Flat Rate MLS are again, registered Realtors that have decided they can make more money selling a $25 MLS fee for $475 to a homeowner list their home. Regardless, it’s happening, registered realtors are offering Flat Rate MLS everywhere and it appears there is little they (NAR and CREA) can do to stop it. Anyways, national sites like www.freefsbo.com and www.allthelistings.com are here to stay – if the Flat Rate MLS industry can continue then Raeltors will see significantly less $$$$ going into their pockets and more staying in the homeowners ($8500)

Brandon Schlichter
December 28, 2006 12:14 PM

Every time i read a article like this with comments , i always chuckle a bit. I know when i got into real estate , the first thing my broker told me about fsbos was "Rule of thumb is that they sell for 16% less without a Realtor than a comparable would do". To prove or disprove that fact , i took a large subdivision in my area, the sales in this subdivision are very regular and very easy to predict. I took a look at the whole market , ones with realtors and one going FSBO. On the market at that given time , (June of 06) there were about 7 houses listed. 3 FSBO properties and 5 or so listed with local brokerages. The ones listed with the brokers ranged from a price of $106,000 to a price of $125,000 and the fsbos were $105k , $106k and $125k. Every house in this subdivision is a cookie cutter home , 3 bed with 1 bath and a 1 car garage, brick front , small porch on back. Every house's construction is identical ,yard is identical , and the like. Being a listing agent on one of these properties (and this was a fairly popular subidivsion) I had been in every home in the neighborhood atleast once (One of them I showed around a dozen times). Anyway , after tracking all the properties , here's what happned , The LOWEST one had sold with a broker was $105,000 , this particula property was in badly need of repair and renovation, about $5,000 worth of work. The others sold for $115,000-$118,000 with one selling for $122,000 (This one was in the best shape). Now , the marketing time for the FSBO properties was similar , they used the normal means of advertising around here , several websites , yard signs and newspaper ads. Both FSBO properties were in great condition and one had recently been renovated with a complete overhaul , and the second one a partial overhaul. One FSBO sold for $98,000 and the second one sold for $97,000. From my understanding , the FSBO properties sold with $3,000 worth of seller consessions while only part of the ones listed with a broker required a consession. Now lets take a look at that FSBO properties AVG Sales Price = $94,500 Sales price after consession (No closing fees are Included). Broker Listed Properties AVG Sales price = $114,500 after partial consessions are factored. $107,630 would be the Net To Seller price. So , after all that , the individuals who picked a realtor recieved $13,130 MORE in cash at the end than those who did it by themselves. Now , the dreaded National Association of Realtors says that its about a 16% that exists between FSBO and Broker Listed Properties. So in conclusion , my market research says that NAR is right and FSBO companies (And believe me , companies make lots of money when FSBOs are sold without Realtors) Are wrong.

Richard Newquist
January 15, 2007 2:10 PM

From what I've seen, the real estate industry is changing. Listing commissions make no sense because they are about the same percentage for a $100,000 house or an $800,000 house and the agent doesn't do that much more work for the latter case. It is interesting that the big brokers are secretely offering the low-cost flat fee listing to FSBO's who are intractible about selling their own property. FSBO's run into a lot of problems selling their own homes none the least of which is security. I have personally viewed a gaggle of FSBO's properties and they obviously had NO understanding of the risk they are taking. They didn't know who I was and they still showed me the whole place, valuables and all...told me when they would be home...they had no personal security plan. In essence, they were wide open to a robbery or a burglary. It seems to me, that a realtor with a good sense of security could sell that expertise to a FSBO using it as a great way to either get their listing or a flat fee listing (which will probably convert later). The realtor, however, should actually do something to educate the FSBO about safety and security. THAT--would be providing additional service that has actual value!

For Sale by Owner Center
January 17, 2007 9:38 AM

It's a shame that REALTORS focus on scare tatics of why consumers should use their services vs. what actual value you bring to the transaction. A) REALTORS do not screen their buyers either... what at the open houses they take a driver license? Come on... B) As for the legalities... don't forgot that escrow, title and the mortgage lender is involved in the transaction and they must also have a legal transaction in order to close. The REALTOR is not the only gatekeeper in a transaction. Must people are honest and they will complete the property disclosures properly. The NAR purchase contracts are designed to protect the REALTOR not necessarily the buyer and seller. Take a moment to read it and you'll see. C) The data provided by the NAR regarding average sales price is flawed. They use a MEDIAN not an average. The median is a "middle number" in a series of numbers... the average is a sum of all numbers divided by the total number. Most agents don't even understand this fact.... and it's extremely important because a the difference is based on a single number in the set. Here is more information regarding this... http://www.forsalebyownercenter.com/blog/2006/10/do-nar-statistics-of-for-sale-by-owner.html Lastly, the number of successful FSBO's is actually going up. According to last years 2006 NAR Survey... 12% successful FSBO and another 8% used "mls only" which is just a power FSBO. This equals 20% of the market or 1.2 million home owners sold SUCCESSFULLY via FSBO. If you add in the additional 9% who succefully used a "discount brokers" who charge 2-3% which again is just a FSBO on steriods.. you get a total of 29% of the market that sold via a alternative FSBO type model. If 29% of the market sold for 16% less as REALTORS state then the entire national average sales prices in the US would have gone down. Don't get me wrong... some REALTORS are extremely good at what they do and they deserve the income they make... and some FSBO's shouldn't be selling FSBO because they have no clue... but likewise... there are many REALTORS who have no clue and shouldn't be selling real estate and there are many FSBO's who understand real estate better then the agents they interview.

Brandon Schlichter
January 19, 2007 8:59 AM

FSBO Center - There are agents that DO take down DL numbers and license plate tags at open houses. I personally do require them to provide information. For reference , my company's policy is to get everyone we show houses to pre-approved, that way their social security # is on file with someone in case of a event. The use of FSBO is going down , but the use of partially-assisted FSBO is going up. Alot of MLS services require a home to be listed with a broker in order to be on the MLS service , so some people do go with flat-fee brokerages and then co-op to agents. NAR Also has the statistics on agents that do quite poorly. In fact , only about 20% of agents do a good enough of a job to get reffered and continue in business.

Ryan H
January 31, 2007 9:20 PM

Glad to see that Mark C is present to represent his website, FREEFSBO.COM. Mark, you're awfully quick to attack the Realtors both personally and professionally. Could it be that you have an agenda and a personal stake in making Realtors look bad (such as your own pocketbook?) Wouldn't that make you the biggest hypocrite here? You're transparent man. Nobody's buying it.

mark c
March 1, 2007 5:41 PM

Ryan, I really don't think I am personally or professionally attacking realtors - my mother is a well respected 30 year agent - and a wonderful one at that. That said, I also know how "relatively" easy it is to get a real estate license. If you follow my posts, read my articles or visit our website you will see that we/I make it very clear that FSBO is not for everyone. From my perspective, and it is my opinion, the internet has dramatically leveled the playing field when it comes to real estate sales. I suspect you are a realtor, look at your own statistics - they are alarming when it comes to the amount of $ spent on internet related advertising (websites, search, etc) by real estate agents in relation to how prospective buyers search for property - I didn't make them up - http://www.realtor.org/CRTWeb.nsf/files/2006_REALTOR_Technology_Survey_Final.pdf/$FILE/2006_REALTOR_Technology_Survey_Final.pdf I was also in new homes sales and marketing for 12 years – I know the ropes. As far as FreeFSBO.com is concerned we don't "Charge a fee" - hence the name - FreeFSBO.com - we have vertical partnership agreements to redistribute FSBO seller information - that exclusive partnership group INCLUDES realtors that want to approach FSBO sellers to list their homes if and when they are unsuccessful selling it themselves. So we really don't have a "personal stake". I am tired of the NAR scare tactics over the years – “do you know who is walking through your home” – the question I have for Realtors is do you??? My mother’s house was robbed after an out of town Realtor showed her $1 million dollar property to two men in a van (she was robbed of $250K in jewelry). They were never heard from again and the Realtor didn’t have accurate information to track them down. The new “scare tactic” is using a flawed formula (medium price) to make claims that FSBO’s sell for 15% - 20% less then realtor generated sales. As far as being "transparent" or "hypocritical" I have never done anything but represented myself as President of FreeFSBO.com – if I was trying to promote our website I could be significantly cleverer. And again, we're FREE - we don't charge a 6% commission fee!

Tim Cowan
June 19, 2007 11:23 AM

Facts are Facts. There are plenty of people out there buying and selling through FSBO, but who is looking ou tin there best interest? If you are considering buying or selling your home, do your homework. Find a REALTOR that is willing to work hard for you. Find a REALTOR that knows how to market your home. Find a REALTOR that knows the trends of the area. Find a REALTOR that will keep you in the loop. Once you find this REALTOR, then compare it to how much work you are willing to put into selling your house. Does it compare? If the answer is "yes", then by all means sell your house FSBO. If the answer is "no", then call me. There are many people that went to college and took a prelaw classes. We all know the basics, but when it comes down to it. How do you want representing you? Someone that thinks they know what is going on or someone that does it everyday? As a REALTOR, I work under a strick code of ethics and I take pride in representing my clients to the best of my ability. I live, sleep and eat Real Estate everyday.

Alan Jacobson
June 25, 2007 9:39 PM

Read a cautionary tale about a FSBO gone wrong. http://www.fsbogonewrong.com

AzDave
November 7, 2007 3:27 PM

Mark, you do have a personal stake when providing information to clients of yours is your business. You have to perpetuate certain perceptions to ensure future income for yourself. As far as for your mothers incident. Any Realtor worth their fee should be prequalifying anyone they don't know personally before they get in their car. Also... if your mother had a quarter million dollars worth of jewelry why was it not in a safe, especially if you are going to be allowing people into her home? There aer too parts of foolish with that situation. So no one here claims that you are fabricating it, do you have any way to prove the claim?

Mark
February 12, 2008 3:08 PM

Her jewelry was in a safe, in a closet. They took the entire safe which was later located on a backroad - they opened it with what appeared to be a sledge hammer. The safe was supposed to have been bolted to the floor but never was. All it ended up being was a heavier then normal "suitcase" full of expensive jewelry.

Linda
July 18, 2008 12:57 PM

In San Diego, CA, FSBO's have all but dried up and blown away. Just like a lot of Realtors. Realtors can't afford to spend money on houses that are pulled from the market because they aren't making money anywhere. Traditionally they could "average" their loses over several listings. Now the loses in many cases have mounted higher than the income. Buyers spend 100's of hours looking, then find out their previous loan qualification is no longer valid (for sometimes arbitraty reasons, like "We no longer loan with less than 30% down."). Many Realtors have dropped out because their "fat" paychecks (ave. income $25,000 to $49,000) have put them below the poverty line due to sharply increased hours coupled with decreased transactions coming to fruition. Most FSBOs drop out for the same reason. It takes too long, costs too much, and gets too little result. FSBO's would much rather turn the tedious wait over to the few Realtors who have the savings to wait it out. Putting the risk (for ad dollars, time--in terms of dollars per hour, and unimaginable agony from the occassional frivolous law suit) onto the Realtor is the number one reason I can think of to list with a Realtor instead of going FSBO. I would rather save $10,000 on the sale of my own home, too. But even as a Realtor (perhaps especially as a Realtor, knowing what I nkow), I would rather list than go FSBO. For FSBO proponents, why not try negotiating a little back from your Realtor? Sometimes that works, and you still get all your protections.

This discussion has been closed.

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