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Regina, Other/Just Looking in 07977

What reasons are there to NOT try to FSBO first?

Asked by Regina, 07977 Fri Nov 2, 2007

I have three proposals from Realtors. Their prices ranged nearly $50,000. I want to try it on my own for 2 weeks. If it does not sell, I will list. Please tell me why I would NOT want to try it on my own. I will list for $960,00. The commission savings on that amount is a lot of money. I also thought about listing flat fee for 30 days. What harm could come from this approach?

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Regina - If you really want to try to sell your home yourself you need to allow yourself the same amount of time you would allow a realtor to market your home. You will gain nearly as much exposure by putting your home on the internet as you can by placing it on the MLS. Whatever you do don't just stick a $14 FSBO sign and then sit back and think it is going to do the trick. The internet is a wonderful tool, use it to your advantage. However when you do advertise it on the net if you are willing to pay some sort of commission make sure you annotate that you will accept one time showings at a reasonable percentage that you can handle but will also bring realtors to your door. I've sold my last three home FSBO on the internet at well below the average lisiting time. As for disclosing any problems with your property offer to pay for a home inspector of the buyers choosing in order to give them a non-bias opinion as to the condition of your home AND by all means be honest with the buyer notifyng them of any problems you are aware of and put it in writing. Good luck!
2 votes Thank Flag Link Fri Nov 2, 2007
I haven't read the other answers but I did exactly what you are describing and it was a mistake. Before the days of a FSBO being able to get their homes listed in the MLS, I always recommended doing FSBO first in case a neighbor, friend, former owner or relative came out of the woodwork to buy the home. It also gives you a chance to see who the hard working Realtors are.

I put a FSBO ad in the paper and the post cards and letters came pouring in. One of them had a 14 day trial for only $49. I signed up and also signed a post dated listing agreement with the full service local agency I chose. Ironically, I received awesome service for my $49 and lousy service from the full service. But what I didn't get by doing it this way was "buzz" and "networking". Local agents boycotted the flat rate out of town service and days on market accumulated. My full service agents either thought I was going to sell it during those two weeks or they didn't consider it a new listing when they got it. It all comes down to first impressions. Make sure your agent does a BLITZ the day it goes on the market. You only have one chance to make a first impression.

Good luck,
Ruth
Web Reference: http://www.Oak-Park-IL.com
2 votes Thank Flag Link Fri Nov 2, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
The buggest downside is time - it will probably take you more time to sell as a FSBO than with a traditional agent. You also need to spend the time to market your home - you need to do the work a realtor would normally do if you want to be successful. You will need to learn alot in a short period of time. Some realtors will try to scare you about how complicated the process is and that you're not qualified. If this will intimidate you, don't do it. It's not for everybody. It's not easy. But if you're successful, you can put alot of money in your pocket.

Getting on the MLS is a great start. Make sure to offer a full buyers commission. Choose a service that lets you keep that 3% if you bring in your own buyers - which gives you the leverage to deal that commission if you like. You can also consider a discount brokerage with full service, many of which take care of the much of the negotiations, coordination, paperwork.

Another advantage - you will get to meet many realtors while you're a FSBO. They will give you information. They will give you FSBO booklets. They will offer you comps and information and advice and CMAs without obligation. They are trying to get your listing. But, your exposure to them will let you learn alot about their personality, ethics, style, and competence. You'll discover great questions to ask. And in the end, you will probably find a realtor you really want to work with if you switch to a traditional listing. For me, has been a great way to interview realtors!
2 votes Thank Flag Link Fri Nov 2, 2007
If you want to list FSBO, go right ahead. This is America you are allowed! :) However, two weeks is hardly enough time to market and sell a house that is listed at almost a million dollars. For the record, I don't believe a 50,000 spread is very big for a home of that price. The drawback of listing with a flat fee agency is that you will be doing all the work on the listing side. You will also be present for all showings, which is really not a good idea. Buyers like the freedom to be able to take a good look, and they are a little inhibited when the seller is present. They tend to give sellers the impression they like ahouse, even if they don't, because they don't want to offend the owner. Sellers also tend to talk too much when a potential buyer comes into their house. You probably won't get very good,and by that I mean HONEST, feedback in a FSBO or flat fee situation. And to market a home on your own, you are going to have to be available at all times to show it.

Other than that, one of the the benefit s of having your home marketed by an agent is that the agents know the other agents and those other agents all have buyers. The idea is to market the home to the agent community. Agents also give plenty of good advice about the staging and preparation of a home.
2 votes Thank Flag Link Fri Nov 2, 2007
Forgot to mention -- The one advantage you CANT match no matter how good you are at this stuff is the contacts a Realtor has. They know a lot of other Realtors, and show off your property to them if they are good at various lunches, presentations, etc, or just by calling around and knowing who has buyers and what they are looking for. The best way to get a good offer is to try to get several offers (Though even that is tough in this market). Getting a well-connected local agent is the way to accomplish that, IMO.

You could always get an MLS entry done cheap, but you won't get that advantage.
2 votes Thank Flag Link Fri Nov 2, 2007
Hello Regina. If you want to market your home yourself, you'll have to put a lot of time and effort into it and there'll be a learning curve as you don't do this every day unless you work in marketing and advertising. It seems to me that going through all of this for only a 2 -4 week period may not be worth it. As an agent, I would certainly not want a 30-day listing as getting everything in place is a lot of work. Once it's in place, it's maintenance and not as time consuming as setting it up.

I don't see any harm per se other than the potential waste of time and effort that I just mentioned. You may also want to consider that most buyers in your price range will work with a real estate agent and if they make an offer on your house, they'll want to use their agent and they'll most likely take into consideration that you are not paying a listing commission, which will result in a lower offer. Believe me, most buyers will not let you pocket the savings. They'll want a piece of the pie. Lastly, you'll also want to take a look at the sale price statistics for FSBO sales. The average sale price is typically lower than the average agent assisted price and the difference is more than what a full broker commission would have been. I would also want to see how many homes in your price range sell FSBO. I don't know if there are published statistics about the # of sales in different price ranges. Good luck. If nothing else, you'll learn a lot by trying to sell your own home. So it definitely will not be all a loss even if you end up not finding a buyer.
Web Reference: http://www.theMLShub.com
2 votes Thank Flag Link Fri Nov 2, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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1 vote Thank Flag Link Fri Nov 2, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
I certainly agree with you that commission on a property for 960K is a lot of money. If it were solely and clearly only a matter of you could find a buyer on your own, and the results would ve equal, it would stand to reason you would benefit from selling it on your own.

The fact that the Realtors gave you a spread of 50K on your pricing is something to consider. You didn’t say where your price of 960K originated. Is that the top, bottom or middle of the range provided by the Realtors.

Suppose that you did get a contract during your two week trial. How will you know if that represents the highest price and best terms that you could have gotten? When you sell FSBO, you have a limited buyer pool as compared the potential buyer pool that you will have with a Realtor who provides aggressive marketing.

If you get a contract, you will not have had enough broad exposure to know if a better contract is out there. What happens if you take the contract, and always wonder? If you are on the market for two weeks, and you don’t sell, what have you accomplished?

Of course, there are all the risks of allowing access to your property without the ability to prequalify the buyers. If you get a contract, you will very possibly miss something along the way. New agents have mentors and brokers to assist when they encounter obstacles. Moreover, the mentors and brokers step in to tell new agents when they missed something and were totally unaware. It takes many transactions before you really are well prepared to handle the unexpected. The unexpected happens more than most people think. We as Realtors, often solve issues without our clients ever having known there was one. Even today, I could encounter something that was unfamiliar to me. I have a great network of colleagues and contact to source. As a FSBO, you don’t have that some support team behind you and as a result there is risk.

As a FSBO, expect Realtors to call you to solicit your lisitng.

As a FSBO, expect Realtors to approach you w/ buyers and ask you to pay a buyer agent fee. The result would be your ‘savings’ from paying commission is reduced without the risks and liability being reduced. The agent will be representing the buyer, not your interests. The agent will have more tools, resources, and knowledge.

You asked Why NOT to go FSBO....All that being said above.............there are some situations when a FSBO does come out ahead. There is risk and always a question of what contract might have come if you sold through a broader channel. Yes, it is a lot of money, and I don’t blame you for giving it consideration. When doing so, take a step back so that your perspective on saving commission does not jilt your objectivity in evaluation of risk vs. reward.

Good Luck and do come back and let us know how you proceed.

Regards
Deborah
1 vote Thank Flag Link Fri Nov 2, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Would you attempt orthopedic surgery on yourself before having a professional surgeon do the job? The first surgery is critical much like putting you home on the market.
A professional Realtor much like a surgeon knows how to market and get your home sold. The first 2 - 3 weeks of having your home on the market are ciritical.
Would you want a discount surgeon to work on you surgery or would you want the best?
1 vote Thank Flag Link Fri Nov 2, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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Realtors charge a lot, it's true. However, I recall reading a study a few years ago (not by the assoc or realtors) that showed that they provide more than their 6% in increased property sale price, and that does not include the labor they put in.

Of course, if you know what you are doing, or have really good sales & negotiation skills, or have a good way to value houses, maybe FSBO will work for you better than the "average" result. Admittedly, most people don't know a lot about selling, marketing, negotiating, or real estate valuation... There are more tools today though than there were 10 years ago.
1 vote Thank Flag Link Fri Nov 2, 2007
If you are feelin' frisky go for it. It will not hurt anything. You likely will not get much activity in 2 weeks. What you need to ask yourself is what is your motivation for selling. How quickly do you need to be sold. If time is a factor, I would not go FSBO. If you have a little time, try fsbo, if you like it great. If it is not for you, hire an agent. You may not want to hire the agent that gave you the best price. Consider who seemed to be the most professional, they highest price may be a hard sell in this market.
1 vote Thank Flag Link Fri Nov 2, 2007
In addition to all of the great answers already given, you could find yourself showing your property to strangers and buyers who don't qualify. I hear stories from my clients/buyers who tell me that prior to us meeting, they have toured houses that are completely out of their price range. They tell me they were just snooping. That's not to say that snooping can't happen with a Realtor. However, I don't have time to show my buyers homes that are out of their price range. So, you can be sure when I call you to show your home, my buyer can afford it.

I have also heard from buyers that FSBO's are often viewed as desperate and that they often think that the seller can't afford to pay a Realtor.

I am simply passing on things told to me from buyers.

In my professional opinion, the most critical time frame for a new listing is the first two weeks on the market. Depending on where you are located, after that time frame, you risk becoming old news.

I currently know of a FSBO who was approached with an offer from an agent without having exposed their home to the MLS. I know of three buyers looking for a home in that area who would have paid more than the current offer that was accepted. The owners of the property have no idea how much money they have potentially lost.
1 vote Thank Flag Link Fri Nov 2, 2007
Hello Regina:

Yes, you can sure try to sell your house FSBO or discount broker first if you really want to; because if you are just looking at the commission, it seems like such a good ideal, doesn't it? .

However, the reality is that the majority of the FSBO sellers ended up using full service broker after trying for a couple of week, a month, or a few months. The reason is that selling houses are REALTOR's full time job; we spent years learning about the real estate business, how to get the house prepared for sale, how to price the house right, how to market the house to as much agents and potential buyers as possible, how to watch for potential pitfalls, how to fulfill regulations both real estate and government, what is customary - all these require special skills, knowledge and experience.

By just 'trying' for a few weeks, you might lose out not only precious time, but also, potential net income.

I am not saying that there are not successful FSBO sales; especially when the market was hot; however, they are by far the exceptions. In today's buyer market, you want to make sure your house received the best service and that your house stays ahead of the curve. Trying and then retracting can potentially do more harm than good when selling your home.

Sylvia
1 vote Thank Flag Link Fri Nov 2, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
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Homes are only "new" on the market for a very short time. If you are motivated to sell your home it needs to be priced right. Some agents are in the business to get listings. They will price a house higher because that's what they think the seller wants to hear. In turn your home may stay on the market far too long and you will end up doing price reductions. By this time everyone who was interested in your home has already seen it when the price was too high. If they see the price dropping they think the seller is getting desperate. My opinion is to get it listed right away with a Realtor for the right price. Good luck, Julia (PS Realtors come with errors and omissions insurance... You do not want to be taken to court for a simple mistake)
Web Reference: http://www.c21bowman.com
0 votes Thank Flag Link Sat Jun 7, 2008
Regina,

I feel your pain with either doing FSBO or a flat rate agency. Before I go there I must cleary state for any consumer to carefully read the Broker responses. They are very fearful of the flat rate appraoch because they know and understand the commission approach is totally old fashioned. For those that don't know, since the Internet drive something like 80% of home sales not an agent. People search the web then tell an Agent whihc home he/she wants to visit. Agents get 2.5% - 3% for research we did as buyers. I think not!! Agents are at a point where many poor realtors are being weeded out by the market. For example, I've had my home listed since last October with an Agent. Why did I bother? I've pulled together better information than the Agent of comps in my area. I know more about recent foreclosures than the Agent who seems to never be around. Again, I would say read any Agent feedback with a pound of salt!! Most of them think consumers are less informed, but the reality is we have access to almost as much information as they do.

That being said, there are a number of different flat fee agencies out there. I agree with comments be careful on which one you select. There are several that provide comps, contray to Agent responses, and have tools for you to obtain tons of information. Some even have hotlines and ad-hoc research they can provide for a low fee. So I say go for it, but be selective on the FSBO company. I have added one site I found which is worthy of a call for more information. Any Flat Fee Agency that does not spend 30 minutes on the phone discussing things with a follow-up inperson appointment is not worth it.

Best of Luck
0 votes Thank Flag Link Sun May 18, 2008
Regina
I almost opted not to post, you've had a lot of information to digest. I do not know your market. If I were talking with you here is what we would cover:
1. Your situation. Where are your moving, why, when do you need to be there? I want to know how you could lose? If the market going up? going down? Where you are moving: going up or down? In most cases their are hidden costs that the average home owner is unaware.
2. What you need to net out of the sale. In most cases my experience has been that I can show a seller that I actually save them more than the amount of my comission in the marketing and negotiating process. My goal is the same as yours, so help you get the most net profit. You are concerned about the commission, I am concerned with protecting the other 90% Plus percent.
3. 90% of the time another Realtor brings the buyer that purchases your home, so you do not want to ignore them, right?
4. 90% of the time, the listing agent does not bring the buyer, so you really need to market to other Realtors. As a person selling on their own, you are not able to do so effectively. Of course, you could use an MLS only (limited service) broker. You'll be paying the buyer's agent their side, plus the fee to the MLS only broker, plus doing all your own marketing.

Question - who represents YOUR interests. You pay a flat fee to a MLS only broker, who advises you on how to get your home sold "for the highest net profit"? Not the MLS only broker. They never set foot in your house, and in most cases, do not know the market.

So, truthfully, you are a seller without professional representation. As I said initally, I don't know your situation. Usually time is money. Just as an example, you seem to think that 30 days is really not important. Would it have mattered on September 1, 2001? How about on September 1, 2007? The truth is, no one knows the future. No one foresaw the mortgage market hiccup coming, at least not the way and the severity it came.

I am dealing with clients now that, because they "did it on their own" saw their home's value drop 10-25%, even 35% below their expectations. Again, maybe you have money to lose. Most of my clients do not. I do not advise on trying it yourself unless you are prepared to pay the price.

Best of luck to you!
0 votes Thank Flag Link Sat Nov 3, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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My answer must be quick and simple, because I lack time, however, your question caught my eye and here is your answer:
A LOT.
And I'm sure most of the last 16 answers have told you why.

Calculate a price tag on your motivation and serenity because when all is said and done if you go on your own you will see a good real estate broker earns their money.
0 votes Thank Flag Link Fri Nov 2, 2007
I say list it FSBO first, then you learn what it really takes to sell and market a home.
0 votes Thank Flag Link Fri Nov 2, 2007
Agents work with buyers because it is easy. You show the house, the agent writes an offer, and the agent on the listing side handles the next three months of legal paperwork trying to get the deal closed. If you list it for sale yourself, who will follow up with the three months worth of legal paperwork. If you do, what agent is going to want to risk the fact the you have never done paperwork such as this before. So, if YOU were an agent, would you rather show homes that were listed with professional agents that work to get deals closed, or would you rather show a home and keep your fingers crossed, hoping that you don't get sued by the buyers because some legal aspect was overlooked by the homeowners and the transaction didn't get done. Selling a home on your own just doesn't fit into today's "lawsuit happy" reality.
0 votes Thank Flag Link Fri Nov 2, 2007
Selling your own home can be done. However, you are paying a commission to an agent or agents because of their expertise in the business. Realtors are educated and practice in the business so that you are protected and you get the best price for your home. The knowledge of disclosures is very critical in a real estate sale. Especially now that the market has changed. Marketing has a huge impact on getting the top dollar for your home. There should most likely be a stager, high quality flyers, mailers, a website for your home alone, a virtual tour, Open Houses, Agent Tours, print and web advertising and more. This all costs money and a majority is paid for by the agent. So, the time, knowledge and protection that an agent provides you can be more than worth the cost of commission. Especially, since most buyers are working with agents and most agents find the homes on the local Multiple Listing Service. If you are shopping for an agent? Make sure they sit down and present you with a plan of what they will be doing to sell your home. A majority of the time the return on a sale is much higher if working with an agent.
Web Reference: http://www.CoplandTeam.com
0 votes Thank Flag Link Fri Nov 2, 2007
Hi Regina,
You may not sell in those 2 weeks, and if you do not, your house will be "stigmatized" and "old news". Should you then list, you will get less than you would have in the beginning when your house was brand new on the market.
If you do manage to find a buyer on your own, there are any number of pitfalls in completing the transaction without representation. Are you positive that you are completely familiar with every disclosure
you are required to provide to the buyers, both national, state and local? If you omit even one, or improperly complete them, you could be setting yourself up for a lawsuit. There are savvy buyers who target FSBO's knowing this. I would never presume to know as much about a particular profession as an actual professional in that field knows; therefore I would never perform a surgery on myself or a friend, do psychotherapy, represent myself in a criminal case, etc. I always hire professionals to do what they know best.
0 votes Thank Flag Link Fri Nov 2, 2007
I don't think any harm comes from trying it on your own for a bit. The downside to selling your own home would be handling the phone inquiries about your property you may receive, not to mention the amount of agents calling you to try and convince you to list with them. There are also SERIOUS legal consequences if you do not prepare, present, advertise, or disclose information about your home in the proper manner. This is what many agents are suppose to be getting paid for. They are doing the work for you. Also, statistics in Washington state say that an agent can usually get a seller 13% more than they would alone. This would more than pay for the agent.
0 votes Thank Flag Link Fri Nov 2, 2007
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