Home Buying in 98199>Question Details

Mike, Both Buyer and Seller in Los Angeles County, CA

Do Agents Understand That When an SOC Is Offered by FSBO They Get The Same Commission They Normally Would?

Asked by Mike, Los Angeles County, CA Tue Mar 11, 2008

I buy fixers, fix then up and sell them. I have a property I am offering in Magnolia w/view. 3bed/1.5bath $689,500. I am not using an Agent but will pay SOC. I know every one of you can get it sold in 3 days or less, no problem, no matter the current market if you listed it.

That being said, I’ve used Agents before to list only to have to eventually sell it myself anyway, after I have raised the price. (These were not pricing issues.) This has happened in Columbia City, Des Moines, Federal Way, Tukwila, Lacey and Edmonds. (Yes, I am friends with several Agents and I respect what y’all do.)

How do I get Agents to recognize that all that I am interested in is them bringing something to the table (a qualified buyer), selling my house, and giving the Agent their SOC?

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Answers

41
There are many reasons why an agent will not bring a buyer to a FSBO property even though they are offering a commission. Here are the most common one's.

1. State law: before anyone can be represented, they must be under contract by State law. If the seller has not already listed with an agent, then it must be the buyer for it to be legal. In Washington, like most other States, the buyer is seldom under contract and so that leaves the agent in a legal dilemma.

So why is it that agents from other companies can show a property without this documentation coming from them? When the listing agreement is signed by the seller, they have already authorized their agent to employ other agents to help them sell. That agent is under an MLS cooperative agreement with other member agents.

Agents who are not a MLS member are at risk and basically operate just like approaching a FSBO.

2. Insurance: most insurance agencies for agents forbid representation without prior agreement. When they bring an undocumented buyer to your property, they are in effect acting as "agent de facto" as your agent. Since there isn't an agreement to spell out everyone's responsibilities, again this puts the agent in a dangerous and potentially costly situation.

3. Although many sellers will say that they are offering a commission, what assurance does the agent have that it will actually be paid. Last year there were over 100 lawsuits filed nationwide that made the same claim with the seller almost always prevailing because there wasn't a prior written agreement.

The TV sitcom actor Jerry Seinfeld lost a $100,000 commission dispute with his agent in NYC. What saved the agent? GOOD DOCUMENTATION.

I'm the Broker for an investigative real estate agency (believed to be the only one in Washington State). In addition to the usual sales-purchases, a large portion of our business is investigating real estate deals that have gone bad. We actually prepare the civil presentation for court and forward criminal conduct information to the prosecution.

I recommend to my agent clients that before they show a property, that they print out an MLS agent detail, flip it over and run it through the printer again this time printing a guest log on the back. Before the client gets to see the inside of a property, they sign the log, fill in their address, phone, and the agent notes personal info. for safety reasons.

This log saved one agent recently who was in a procuring cause situation and showed that the client did in fact visit the property as their client even though they claimed otherwise and was attempting to work with a relative agent who was too lazy to show it.

Over the last few years, my business has increased and it is almost always as a result of faulty documentation where someone who thought they were doing the right thing, did not put it on paper correctly (P.S.: most of these are FSBO).
3 votes Thank Flag Link Sun Mar 16, 2008
You have asked an important and relevant question. Real estate agents DO understand that you want a qualified buyer, that you want to sell your property, and that you are willing to pay them a commission - for dealing directly with you. And, do You understand the agents' concern about the process you are offering? Although it seems like you are trying to be fair, the reality is that we would be placing ourselves, our companies and our customers in a very different arena than we normally would be if you were represented by your own agent. Many agents don't even get this point, so it's easy to understand why many FSBOs struggle with it. When representing a qualified buyer, my goal is to be sure they end up with the house they want, in the time they want it, and get through the entire process as smoothly as possible. To be sure that happens, I would most likely need to be talking with you directly regarding, for one thing, the home inspection and any issues that may come up. I could very likely find myself having to explain things, and having to help trouble shoot things, etc. Then I am doing the work that your own agent should be doing, getting paid no more, and very probably placing myself and broker in a legal dilema that we do not want. I sure hope this makes sense to you, and other homeowners and agents. Thanks for asking the question!
3 votes Thank Flag Link Thu Mar 13, 2008
The buyer agent may receive the same compensation, but the workload and liability for that compensation may be greater. Some FSBOs are great to work with; others lack knowledge, and a few are unscrupulous. When an agent works w/ another agent, if and when there are any challenges, there is a broker manager to consult, an association of realtors, and a state regulatory body. The same safety nets do not exist when working with FSBOs. Even with a FSBO who is forthright and fully discloses all info, there is still a greater liability for the agent.
2 votes Thank Flag Link Mon Mar 17, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Mike,

I think you face two big obstacles. First, as agents we have dealt with a lot of folks trying to sell their own home. The experience is mixed. Some people are great and others are aweful. On the whole I think many agents have the feeling that if they deal with listed properties represented by another agent, there will be less issues and hastle.
Your other problem I think is that nearly all agents limit their search for homes to the MLS. If you are advertizing your home on your own, it is hard for us to find out about it. Many agents just don't take the time to search FSBOs fpor their clients.
In short, I think most agents see FSBO's as a lot more work for a much greater risk. Just my two cents.
2 votes Thank Flag Link Wed Mar 12, 2008
1. A FSBO has no written contract to pay a commission. Who is to say that a FSBO will pay you a commission as there is no legal recourse to recieve a commission.

2. Listed house have keyboxes making it easier to access the property.

3. When selling a FSBO the selling agent often times will have to do additional work.

4. Listed properties have the property descriptions i.e. number of bedrooms sq. ft. etc. Often times the form 17 and legal description are attached.

I am open to bringing buyers to FSBO houses, but only after I have exhausted all other options. If you
are in a market with a small supply of houses you may get a lot of offers. If there are a lot of homes on the market that are at the same price point your house may sit much longer.
2 votes Thank Flag Link Wed Mar 12, 2008
Mike I think I am in the minority in light of the other agents remarks.

To clarify my thinking just a few items. When I am working with a buyer that wants to view/pursue a FSBo the first thing I do is have a long discussion with them about some of the differences in dealing with a FSBO vs. a listed home. Most notably is the uncertainty of the FSBO's understanding of the contract they may sign and the etiquette inherent to a sucessful transaction. This is also the best time to discuss the ways in which I will get compensated for taking on the different tasks working aFSBO. I do not say more difficult because I have had some very clean and professional transactions with FSBO sellers.

When it comes to approaching the FSBO two things are paramount to my thinking 1: there is a mutual goal to be accomplished and 2: FSBo sellers deserve all the professional respect and courtesy that would be given to any agent on a listed property.

The code of ethics that all Realtors follow dictates that regardless of who we represent we have a duty to act in a manner that does not harm another party. Certainly we can represent a buyer in a FSBO transaction without representing the seller.

Agents working with a FSBO must be comfortable with contracts they are assembling for their clients. Windermere Services has done a great job in arming Windermere agents with the legal verbage appropriate for FSBO situations. Agents also need to recognize to refer the FSBO seller to an attorney for any contract questions.

Yes FSBO can be more work and liability but they will always be a part of our real estate marketplace and for that reason agents need to take the time to ask the questions necessary to prepare themselves for the eventuality that they will at some point be in a FSBO sale situation.

Happy Flipping!
1 vote Thank Flag Link Tue Mar 18, 2008
Good luck Mike, most homeowners who choose to sell their homes themselves have no idea what their getting them selves in for. 1st of all, FSBO usually sell for less money then if they used a Realtor, national stat. Without having the state required forms in order to handle a rEalEstate transaction meany FSBO find themeselves in a law suit shortlt after transferring title to savy buyers on real estate laws. Best wishes, Steven Baker
1 vote Thank Flag Link Tue Mar 18, 2008
Hi Mike,
The agents who have responded are absolutely right. I represented a buyer on the sale of a FSBO through a limited service agency recently. I was running back and forth, twice the workload. Twice the explanation. Plus, I had no control over the person I was working with. For example, if I don't think that a particular buyer or seller respects me or what I do, I won't work with them as a listing agent or a buyer's representative. When you represent a buyer in a FSBO transaction, you are dealing directly with one of the parties in the transaction and you do not have the luxury of dealing with a more objective third party when you are explaining the offer and additionally you must explain the process, to someone who often comes from a hostile perspective. (We know going into an offer situation with a FSBO that the seller doesn't respect what a listing agent does, so we realize up front that it will have the greater risk of being extra difficult to do our buyer's representation).

Most agents know enough to be cordial and responsive to a buyer's agent. Most agents that I have interacted with understand basic good busines practices. This FSBO seller did not. She had no stake in her reputation among the business community of agents who "farm" or sell homes in her area. She could care less, she had one deal to do and she was ruthless and unethical about it. There was no holding her to a higher standard as a Realtor is held to by our code of ethics.

In this limited service/FSBO listing I represented the buyer for; I had to completely explain the process to the seller who was rather deceptive. As but one example, although the contract clearly stated that window coverings were to remain, this charming seller removed all of her silk draperies and had hidden several minor defects, the buyer believes deliberately. The limited service brokerage gave me little support in enforcing the contract. I ultimately got a small credit for the buyer from the very rude seller, but it did not cover the replacement cost of the window coverings she took. The buyer's recourse for the defects found at closing would have been to go to small claims court and they wanted to move on. (The seller had made the house difficult to access by not allowing a keybox, so much of the missing fixtures/towel bars, etc were not found until after closing- they were present on the walk through).

So, truly, FSBO's or listings through limited service brokerages are far greater risk for the buyer as well as double the work for the selling agent. FSBO's also illustrate the importance for an agent to get a written buyer's agency agreement. (Of course, this is an entirely different subject, but worth touching on in this context.)

So, while I will always continue to diligently show my buyer clients every option, I am aware of the greater risks and extra work involved for me personally to sell a home that is not listed with a credible full service brokerage. There is comfort in doing business with an agent from one of the larger companies when I can be confident that the agent has had training and support to properly prepare their client as well as the listed property for market. There are bad apples in every trade, but I have found that more often than not, listing agents see the big picture and truly make things happen to keep the transaction moving forward for their clients.

They package the listing, pay up front costs on all the marketing, generate a marketing plan tailored to reach the target buyer, prepare the seller by educating him to the market forces, trends and contract terms, make the property available to easily show, help screen prospective buyers, strive to overcome obstacles and objections from buyers, objectively alert the seller to feedback trends that may help the seller better position the property. As a real estate professional, the agent also ensures that the law that protocol and all the proper rules of law are followed. If they are not, the agent and their broker are held accountable. There is comfort in that regard.

There is also comfort as a listing or selling agent when I know the agent on the other side of the transaction is coming from a larger company or one with an excellent reputation for striving for training their agents and having the "big picture" when their word and reputation means something. I have been in transactions that only stayed together because the other agent worked with me to "chip in" and get things done when the buyers and sellers reached an impasse. The 3% commission with double the workload doesn't leave a margin for that, and causes more of the offers on limited service listings to fall apart. There is little incentive for the buyer's agent to try to salvage the deal.

The key to selling a home is not just the price, location or condition; you must also make the home easy to buy. That is what a good listing agent does, and it is worth every penny.
1 vote Thank Flag Link Tue Mar 18, 2008
When a commission is paid for bringing a buyer, as in a FSBO, the agent involved basically ends up doing twice the work in the transaction. That agent has no counterpart on the seller's side to do the seller part of the transaction. There is a great deal more to do than just show someone property. When a contract is negotiated, the important work has just begun!! I do show a lot of FSBO's and I preview a lot of FSBO's, but usually the seller is just trying to cut the commission, and has no idea how to proceed through the transaction.
Web Reference: http://www.MykeTriebold.com
1 vote Thank Flag Link Tue Mar 18, 2008
The Problem's FSBO's run into in Texas is the fact that an agent can get left out of the transaction after the Owner has the clients information. On the opposite side, the Professional Agent knows they will be doing all of the work, and are at a greater risk of litigation if something goes South on the deal.

All and All most agents feel better about avoiding the situation if possible. If you are trying to net more money by selling your home yourself, it usually backfires. Choose an agent who will work with you on multiple transactions, your new home as well, then concentrate of what you do best, and the Agent can sell your home doing what they do best & net your more in the end.

All the Best!
Donna Parker
1 vote Thank Flag Link Wed Mar 12, 2008
HI Mike,
This is certainly NOT the best market for selling on your own, but since you are offering to pay a full 3% SOC, the biggest hurdle is gone. That said, the only FSBO's I show and sell are ones that are on the MLS, otherwise I don't usually see them or search them out if I have enough inventory to show. But if my buyers saw one and wanted me to check it out for them, or show it to them, I wouldn't hesitate to contact the Seller to see if they cooperate with brokers and would pay a 3% SOC.

However, to really get you what you want, showings and a sale, listing it with a flat fee (no service) broker will remove 90% of the stigma that is holding agents back from showing. There is a huge range of prices, starting at around $400. Advertising to agent offices helps, but won't address what an MLS presence will. Incidentally, after it is on the MLS it is also swept by Windermere.com and other agencies websites and will be emailed to hundreds of buyers who have criteria it fits with thier email settings.

With the MLS listing, everything is familiar to us and we can 1) see it, and know the availability 2) use our keybox for access with out having to make appointments with a seller for access (which is inconvenient, and often awkward for buyers too) 3) we have all the tools we need on the MLS like emailing the listing to our clients, mapping tools, special info for showings, tax info, etc. 4) and we can view the property and uploaded disclosures, legal description we would need if we were to want to prepare an offer.

I think you will find it would make your life easier and would get you the showings you need. It's all in a familiar format for agents and most important "your listing can easily be found" as an available option. You have the experience to know what it takes to get a transaction to closing and are willing to do the work. It's the one time FSBO seller that gives FSBO's a bad name, often overpricing, not understanding the contracts, not following the timeframes for notices, etc. That's when the selling agent really has their work cut out for them and when we wish we were dealing with an agent of the seller instad of directly. Also, with our buyer's agency law, we have to be very cautious that we don't advise you or inadvertently harm our buyers, or thier interests while working in the transaction...another concern.

So check out your options for getting on the MLS and getting a keybox so we can all start showing your property! Best of luck to you... Cheers, Lise
1 vote Thank Flag Link Wed Mar 12, 2008
Not in Seattle, but when I have approached FSBOs, I haven't had a warm reception for the most part. Usually they aren't home, or don't answer the door when I knock, and they rarely respond to my phone calls asking for information--like PRICE, for example. I am impressed that you think every one of us can get your house sold in 3 days or less. What makes your house so special?
1 vote Thank Flag Link Wed Mar 12, 2008
Most agents totally get that.

What they also get, is that working with a FSBO is might be time consuming and/or frustrating, and if they have had some poor experiences in the past, they may paint your house with that same brush :-). There are also a lot of agents who are not very experienced, and who have no idea how to work with a FSBO -- simple fear of the unknown might make them not show your property. Also, if your properties are not listed in the MLS system that is in your area, you'll likely not reach the majority of buyers or agents. There could be a myriad of reasons why agents don't bring you offers.

For sellers to reach the most buyers, I always think they should consider working with the best agent they can find. Develop that relationship, and you might find yourself saving quite a lot of time, as well as money.
0 votes Thank Flag Link Wed Nov 25, 2009
The problem may not be in the FSBO listing but the interest in our savvy buyers currently. As a Realtor we have a fudiciary duty to give specific information and data relating the value and the sales history of the property that you are flipping. The Buyer does not get too terribly excited about paying the margin on the flip, even if you do put the work and the property shows the value our Buyers are just not as willing to participate in the venture. Too many horror stories about the flipping properties and the lack of disclosure and the cover up's that have and are existing in some of the past mishaps in our industry.

Perhaps real branding - warranty and service agreements in place with a reputable Realtor in the background helping you create the "value and recognition" might this then make it worth the LOC?
0 votes Thank Flag Link Sun May 4, 2008
J.R, if you've gone through the enitre MLS only to turn to a FSBO, then you'd lose the client without the FSBO wouldn't you. You have no solution for their problem without that FSBO. Yes, you have spent the time going through the MLS, but blame it on the MLS not the FSBO. (Or perhaps picky, picky clients.) You have to qualify the FSBO before you present the FSBO as an option to your clients. Do your job up front. Find out how cooperative and knowledgeable the FSBO is before you present it to your buyers. Get a signed commission agreement for that particular client from the FSBO.

Are you saying that you can guarantee that just because you've found a house where the seller is represented by an Agent that there is a 100% closing rate? (Hmmm, I don't think that is reality.)

I'd be convinced if a few other Agents said they had 100% closing rates, but that just isn't the way life is.

Lori, your complaints apply to Real Estate in general, not just FSBOs. Are you sure you're happy doing Real Estate?
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This market is frustrating, not only to buyers and seller, but to agents as well. Of couse I enjoy real estate or I wouldn't be doing it. It is frustrating to put in offers only to have the sellers not be motivated, and it is frustrating to have to walk away from sellers who list with agents who tell people what they want to hear instead of the truth. I have found however, that most FSBOs are overpriced. It may not be what you want to hear, but it's the truth.
0 votes Thank Flag Link Thu Apr 24, 2008
Mike,

Thank you. I for one, would like an update on your efforts to sell your property, once you try some of the suggestions offered. Let me know which suggestions you feel had the most impact on your traffic.

Good Luck!
0 votes Thank Flag Link Thu Apr 24, 2008
Always appreciate referrals. Thank you.
Web Reference: http://www.shopprop.com
0 votes Thank Flag Link Thu Apr 24, 2008
Tim, Robert, DeDe, Lise, Mary, Debbie, Andee, Ardell, Gary and Courtney, I'm saving your email addresses. You all had good advice and a positive attitude. You are the kind of winners I like to work with. and yes, I get a lot of unrepresented people through my properties who don't buy, (too big, too little, wrong floor plan, etc.) but I would be proud to send those buyers on to you. (no charge.) :-}

J.R, if you've gone through the enitre MLS only to turn to a FSBO, then you'd lose the client without the FSBO wouldn't you. You have no solution for their problem without that FSBO. Yes, you have spent the time going through the MLS, but blame it on the MLS not the FSBO. (Or perhaps picky, picky clients.) You have to qualify the FSBO before you present the FSBO as an option to your clients. Do your job up front. Find out how cooperative and knowledgeable the FSBO is before you present it to your buyers. Get a signed commission agreement for that particular client from the FSBO.

Are you saying that you can guarantee that just because you've found a house where the seller is represented by an Agent that there is a 100% closing rate? (Hmmm, I don't think that is reality.)

I'd be convinced if a few other Agents said they had 100% closing rates, but that just isn't the way life is.

Lori, your complaints apply to Real Estate in general, not just FSBOs. Are you sure you're happy doing Real Estate?
0 votes Thank Flag Link Thu Apr 24, 2008
Think about it, once you find the “right house” you’ve already spent the vast portion of effort you will spend on that buyer.
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If I've gone thru the entire MLS inventory and am on FSBOs now, I've spent a vast portion of time also. So no, it isn't "just hours". Now that my buyers are finally educated it's time to educate the seller. Many sellers, especially FSBOs, are not particularly motivated. So this may be a transaction I devote hours of fruitless negotiating time to only to find the FSBO is unmotivated and unrealistic.
0 votes Thank Flag Link Thu Apr 24, 2008
"Think about it, once you find the “right house” you’ve already spent the vast portion of effort you will spend on that buyer. The sale may be nerve wracking, but nonetheless mere hours of total time," I wished this were true. We can show property for months spending hours and spending hundreds of dollars on gas without a guarantee of a paycheck. Once we find them a home we have to negotiate a sales price and try and get it accepted. If we do get it accepted we now spend time (at least in my area) explaining all the disclosures to and having the buyer sign them (which the seller might want us to provide). We explain the "escrow instructions to the buyer and have them signed. We remind them to hire the home inspector and schedule the appointment. We make sure we have the time to be at the inspection (which generally take upwards of 2 hours) so we see first hand what, if anything, is found. We can then explain it to the buyer and/or seller if they could not be there while the inspection was being done. We negotiate any repairs that the buyer may ask for. We make sure we stay in touch with the lender to make sure that the loan program is still available and make sure the appraisal is ordered. If the appraisal does not come in at the sales price we have to negotiate with the seller again. We make sure the buyer is getting their paperwork together and sent over to the lender in a timely manner. We give the buyers the names and numbers of all the utility companies and make sure that they order the utilities on. We stay in contact with the seller to make sure their paperwork is being filled out and sent in a timely manner. We keep the seller informed on the status of the loan. We make sure we are there to open the house if the seller can't be there to get inspections, repairs and the appraisal done....but most importantly we help the buyer stay calm and focused when and if a problem arises and guide them through to a successful closing. That does indeed take a bit longer than mere hours. Now the extra work you may be talking about would be to make sure that you (the seller) has the disclosures that are needed in the transaction. Make sure that you (the seller) gets your escrow instructions. Make sure that you (the seller) has someone there to let in the inspectors, repair men, appraisers etc. when you can't .... we will probably be asked to do those things that are usually done by the sellers agent and paid for by a commission that you are now not paying and will probably still do it with a smile. As far as looking out for both buyer and seller interests, the buyer or seller can always ask the office to bring in another agent but I believe that a good agent can watch out for both parties. We the agents also carry insurance in case someone wants to sue (which can happen in a real estate transaction). We are having to cover ourselves in case the buyer and possibly you, the seller, sue us because you or they felt we did not represent them in the best way. The other thing I see is that FSBOs are saving the selling side of the commission but the price has not come down the $20,000.00 that you are saving. You may be different than some of the FSBOs I have worked with. You may give the buyer the saved commission as a discount or do some very nice upgrades on your homes. I hope that is true. You get and fill out all your own disclosures. You know the purchase agreements so you can negotiate the offer and have the forms for a counter offer. You are there to unlock the door and let in the inspectors, appraisers and repair men. You are willing to do everything that your agent would do for you. I hope so. Yes there are 100% offices out there but you must understand that they make up for it in other ways such as charging for the desk, phone, phone calls, copies, forms, e/o insurance etc. That is what our split pays for. I also pay almost $400.00 a year for my license plus $90.00 a quarter. I pay about $125.00 a year for my keypad. I have to pay for the lock box. I also have to take classes to keep my license updated and to keep up with all the changes that take place in real estate. I don't always get the sale either. I could take a client out for a couple of months, not find anything that they like then they get a wild hair and go look at something with a sign call and make an offer on that one. I then do not get paid for all the previous work I have done and they say "oops sorry". If you want to sell the home on your own and pay a selling agent a commission "thank you" but please do your part also and take care of your end of the transaction. Please don't ask the selling agent to do your work for free. It is not the right thing to do.
0 votes Thank Flag Link Thu Apr 24, 2008
Thank you Agents (and guests) You’ve been very informative.

The most useful information was from those of you who pointed out the necessity of being in the MLS or you wouldn’t know about the property. The second was availability for showings, appraisals etc and a key box. The third was having a signed form that guarantees commission to the buying Agent. (If you bring them, I will pay :-}

I’d like to dispute the “twice the effort” argument. That is presupposing you aren’t doing other things with your buyers, like qualifying them and showing them homes etc. Think about it, once you find the “right house” you’ve already spent the vast portion of effort you will spend on that buyer. The sale may be nerve wracking, but nonetheless mere hours of total time, regardless if you are on both side of the transaction. The commission on a $680,000 sale at 3% is $20,000. If that isn’t enough to get you doing a little extra work; well, you see where I am going. Besides, I don’t believe it is possible for an Agent to look out for both buyer’s and seller’s best interests at the same time. And, I don’t care how you split your commission with your broker, that’s between you and them. Besides, let’s get real. There are 100% shops out there that you could work for.

I have always signed an agreement with any Agent that brings me a buyer. Even if that buyer attended one of my open houses and then went and got an Agent. I figure that the buyer needs the comfort level that an Agent brings and to me that Agent is adding value. The transaction probably wouldn’t occur otherwise. Win/Win/Win.

I particularly liked the forth-right-ness of each of you. I am selling to the Agent as well as to the buyer and I needed to know the objections so I could address them. (Tom Hopkins 101)

Again thanks all
0 votes Thank Flag Link Wed Apr 23, 2008
Since you have Real Estate agents as friends,then I am sure that you have heard horror stories of how some have worked so hard for months or even years with someone,and not have a contract signed,and have gotten burned in the end! (WOULD YOU WORK FOR FREE)?? WHY WOULD I TAKE A CHANCE WITH A FSBO,WITH NOTHING SIGNED TO PROTECT ME THAT I WILL GET PAID?? NO WAY !! As a Agent for 22 years now,I have learned never to show a FSBO unless I get a listing signed! We work to hard to be showing properties to potential buyers without a signed listing that I will get paid!!!!!! Anyway,I think I made my point! Thank God there are enough listings out there for our buyers to choose from,that we don't have to resort to showing FSBO'S! Sounds like your one of the VERY FEW that have had good luck selling your properties on your own,I hope your luck continues,and does not run out without the protection of a PRO.
0 votes Thank Flag Link Wed Apr 23, 2008
By not having a listing agent and saving the LOC, many agents will not show your home. The reason is that if an agent sells it to their buyer then that selling agent will be performing both duties of a listing agent and a selling agent for half the price. Why would an agent want to do two jobs with only the pay for one job?
0 votes Thank Flag Link Tue Apr 22, 2008
I certainly understand people wanting to save the listing and buying agent commission. If you are flipping houses every dollar counts. If you are willing to pay a SOC why not list with a company that puts you in the MLS for a small fee? It puts you in front of all the agents and they will see the SOC. They also will feel more comfortable because there is a contract in place relating to commission. In other words if they bring you a buyer they will not get pushed out of the deal. I know you pay a little more but it might be money well spent.
Web Reference: http://www.shopprop.com
0 votes Thank Flag Link Sun Apr 20, 2008
Thanks Tim,

I appreciate the link.

It looks like I need to take a year to do each house. I guess the fair State of (Soviet) Washington isn't sincere about affordable housing no matter what they say.

Anyway, I'm unclear how this protects any purchaser of a home more than was provided before? It simply drives up costs. I know from my own experiences that contractors and sub-contractors can easily (and often do) skirt these requirements with no repercussions.
0 votes Thank Flag Link Sat Apr 5, 2008
Mike,

The link below is the revision to the Contractor Registration Law. If that link below doesn't work it is the Wa State Dept of Labor and Industry that oversees this new change.



http://www.lni.wa.gov/TradesLicensing/Contractors/files/3-27…
0 votes Thank Flag Link Sat Apr 5, 2008
"Mike-just curious, are you aware of the new Washington flipper laws? It applies to homes non-owner occupied, non-rental, and held for less than one year." Britney Johnson

Okay, Britney, I'll bite. What new laws do you refer to?
0 votes Thank Flag Link Sat Apr 5, 2008
De De,

Thank you for your response. It is good to see that there are other Realtors out there that understand the FSBO role in our marketplace. Your advice for MIke to introduce himself and his experience level to the local brokerages is right on target.

I firmly beleive that in order to have a healthy marketplace acceptance of different buisness models (fsbo, limited service, etc) must be understood. It is our job as professional Realors to know the entire marketplace, not just what is on the mls.

De De, I will share your advice with some of the fsbo sellers I have/will encounter.
0 votes Thank Flag Link Sat Apr 5, 2008
Mike,
In my opinion, most agents do understand that an unrepresented seller, such as yourself is offering the same SOC that they would earn if selling a property that is represented by a licensed broker. However, many agents may not realize your level of understanding of the process. Have you tried creating professional flyers on your property that detail the property itself as well as explains your experience level and knowledge of the selling process. Deliver them to the Real Estate Brokerages nearest your property, perhaps it will generate more interest in your property. Make sure you have done your homework on the neighborhood with regard to what similar properties are selling for and how quickly. Best wishes.
0 votes Thank Flag Link Sat Apr 5, 2008
Mike-just curious, are you aware of the new Washington flipper laws? It applies to homes non-owner occupied, non-rental, and held for less than one year.
0 votes Thank Flag Link Tue Mar 18, 2008
That's right, Marlene! So Mike, the point is we DON'T get the same commission we normally would if a FSBO pays us, for example 3%. In your example, we would NORMALLY get 6% for handling both sides of a transaction. I have never handled one side of a transaction for 1.5%---or really, .75%, since I would split it with my agency.
0 votes Thank Flag Link Tue Mar 18, 2008
Answer to Tom Roche, Real Estate Pro, Bremerton, WA regarding comment from Britney John (...agency agreement)

Revised Code of Washington (RCW) 18.86.010 (1)(A)

Also this creates a problem with the agent becoming "agent de facto", in other words, by the agents conduct they accept all of the risk and are obligated to perform just as if their agent, but there is no obligation for them to pay you.
0 votes Thank Flag Link Tue Mar 18, 2008
Mike....

Unfortunately when an agent sells a FSBO there is usually twice the work and twice the liability. They usually end up explaining documents and what needs to be done to the seller so the transaction is complete.
0 votes Thank Flag Link Mon Mar 17, 2008
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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I am uncertain what Britney John is talking about in regards to havign to be under contract in order to represent someone. Agency law is clear that by engaging to provide brokerage services you are bound by agency law and there is nothing that states you have to be under contract to represent a party in searching for or making an offer on real property. In fact certain elements of agency law endure beyond the closing of a sale.

An agent approaching a FSBO for a buyer would be wise to have a buyer agent agreement so that if the seller does not pay an SOC the agent knows thye will be paid by the buyer.

The NWMLS optional clauses addendum includes a paragraph for commissions to be paid on an unlisted property. This is where an agent would specify their desited amount for an SOC. If the seller accepts the contract and then refuses to pay the commission then there is a breach of contract issue.

I applaud MIke for being open to working with buyers agents. He obviously has the experience, skill and determination to make his fix and flip business a success.

Agents that don't work with FSBO's because they are worried about their commissions really need to 1: reread the purchase and sale agreement to understand the addenda available, 2: need to become familiar with buyer agency agreements, and lastly need to check where their motivation lies. Is it with the pursuit of commissions or helping their buyer clients find a home.
0 votes Thank Flag Link Mon Mar 17, 2008
This is a tricky question. I agree that you need to be listed on the MLS. Most of our clients are looking at a web-site to help them with their initail property search. The liability question for a real estate agents is huge. If we are selling a property that has an unrepresented seller, we can fall into dural agency if we are not careful. When we are only representing the buyer but the seller has questions that we would not normally answer if we are representing a seller. The listing agent would be protecting the sellers interests and the buyers agent would be protecting the buyers interest. The delimna is that a good realtor is educated in their field and knows the laws of agency in their state and understands their liablilitesand responsibilities. If a question is asked by the seller and the realtor does not answer the question for the seller because it may not benefit their client, is this ethical? If they do answer, is it in their buyers best interest? You sound as if you are a very savy seller and I assume that you will have your real estate attorney look over offers that you receive. If this is the case, I would feel much more comfortable showcasing your property to my clients. The bottom line is that although you are offering 3%, the extra liability that the real estate agent undertakes may not be worth the commission. Every agent needs to answer the liability question for his or her own business.
Web Reference: http://www.marymatthew.com
0 votes Thank Flag Link Wed Mar 12, 2008
Well, Mike:
If I have a buyer in the price range and location that would suit them, I call the owner to verify that they will allow a commission to the selling agent.

If I were you, I'd have a sign and flyers that would indicate to Agents that you are offering a SOC of 3%. In addition, your advertising should reflect that and would probably indicate that Buyers should have their agents call you. Finally, you can distribute flyers to local area real estate offices & indicate your willingness to sign a single party listing for the showing of any specific buyer for a specific time frame that they might have.


Good luck.
0 votes Thank Flag Link Wed Mar 12, 2008
Hi Mike, I am from the opposite coast so it is probably not important, but I had not seen that particular combination of initials before - Thanks to Elvis for clarifying. Back East we call that "Offering to co-operate" but it looks like the other agents who answered were comfortable with the term. I would echo Gary's thoughts that when I work with a FSBO where access or experience are obviously going to be issues, I ask for the higher fee. Your post makes it clear that you don't need that kind of hand holding.

Have you tried sending a flier with the house details and your offer to agents to local RE offices? If you use a Real Estate attorney in the area they probably have a fax list they would let you borrow for free as a courtesy. That might save you even the minimal MLS fee mentioned below. Good luck, Stacey
0 votes Thank Flag Link Tue Mar 11, 2008
Hey Mike,
I was raised on Magnolia and now sell real estate in Kitsap County. I keep in touch with old friends who still live in, or want to return to the area. Any way you could send me a copy of your "listing?" Check my profile and it should have all my contact info. Sure would love to bring a buyer and collect that commission!
Web Reference: http://www.askandee.com
0 votes Thank Flag Link Tue Mar 11, 2008
I would recommend that you at least list the property with a very low cost member of the mls, so buyers can see the house on all of the real estate websites. Nothing replaces being on the mls, and there are some very reasonably priced services with no agent for you. That way you don't have to "hope" that an agent knows you are willing to pay the SOC.
0 votes Thank Flag Link Tue Mar 11, 2008
Hi Mike,

Great question. We are used to or always ask Unrepresented Sellers if they will cooperate with us when we bring a buyer. If the price is right and the home fits the criteria for my buyer I'll be glad to show it to them and work with the seller to get the transaction closed.

That being said, there are a couple of issues that concern me when I work with an Unrepresented Seller. One it is often hard to gain access to the home for showings, inspections, appraisal, etc. Second is that most often the Unrepresented Seller doesn't understand contracts or the selling or closing process. This places me in a difficult position since I have a fiduciary duty to represent my client, but have to take extra time explaining the process to the Unrepresented Seller (contract negotiations, etc.). I must be extra careful to do the best for my client while helping the Unrepresented Seller without giving them advice or representation. I often will ask a FSBO to pay me 4% since I am carrying a bigger portion of the work and more importantly (to me) a bigger portion of the liability.

Some FSBOs, have lots of experience (sounds like you have that) and are not as difficult to get a win-win transaction.

Good luck getting your investment property sold. Call me or hit my website if you need any further info.
0 votes Thank Flag Link Tue Mar 11, 2008
HI Mike - Sounds like you are getting a lot of solicitations for your property as a listing:) I personally don't call FSBOs, but I know a lot of agents who do.

To answer your question, though, yes, I do understand that 3% is 3% if I bring a buyer, and I think that is great that you know offering a full 3% SOC in a tricky market is giving you an edge.

Good luck getting it sold! I hope you don't get too many more agents calling you unless they have a buyer for you!
0 votes Thank Flag Link Tue Mar 11, 2008
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