We actually followed a comprehensive marketing plan (we laughed when we saw our realtors plan - we had done almost every item on their list! And many of the realtors we intereviewed didn't do half the things we did!) But yes - we did the printing, marketing, open houses, internet listings, mailings and developed a great network of realtors. It's not easy and it's not for everyone - but if you can do it, it's a valid option and had the potential upside of 20K+ for us!
But my biz got busy and we couldn't keep up with it anymore... sometimes ya gotta outsource... and we are happy with our choice!
Not to mention all the work we do for "buyers" who DON'T buy.
In addition, many limited service brokers offer negotiation services as an "add-on" - for a few bucks (not 3%) an "in the club" realtor can negotiate for you.
Lorie - whether I choose to try to sell my own home, finish my own basement, or do my own taxes - the information needed to make an informed decision whether it's right for me is available.
Home Depot does 20 minute "how-to" carpentry classes - if I decide after attending one of these classes that I can build a $25,000 deck off the back of my home ... well, my bad decision doesn't mean that Home Depot took advantage of me for their own benefit!
Choosing a bad realtor can be even more disasterous. I can opt-out of IggysHouse or most limited service agreements anytime I like. If i sign a full service broker listing agreement I can get stuck with a bad realtor for 6 months not marketing my home with no recourse! How many of Keith's 40%+ full service expired listings were victims of poor realtors?
Anyway, I agree that very few consumers will do the work that it takes to get a good result from a FSBO, and if you're not going to do the work a realtor would do - and more - then you absolutely should not go the FSBO route and you should find a good realtor.
Still thinking about Keiths numbers though - honestly was suprised at those results!
Actually Lorie, I'm currently listed with a full service realtor and they're doing a great job for me.
Before listing with the realtors, I tried the flat fee FSBO route. It was an excellent option for my situation at the time and well worth taking the chance and the time we invested. What I didn't anticipate was that the FSBO route is an excellent way to meet and interview realtors, and as a result we found the best realtor for us. We have found that while there are an abundance of realtors out there, you really have to search to find a decent one.
No one will deny that FSBO is not a route for everyone. But there are plenty of FSBO success stories... and my realtors have me priced right where I was as a FSBO so I'm not sure they're gonna make me an average of 18% more just cuz they're realtors! Or maybe they have a magic realtor wand they haven't showed me yet... In this case, I'd love for you to be right Lorie!
I think a deserve a thumbs up for that! Lorie Gould
Williams... I am thrilled that you found the right agent for you. Now that you have experienced doing it all yourself you will probably have a greater respect for your agent and all that he or she does on your behalf. I would have been thrilled for you had it sold by owner or with Iggys. There is the perfect service or lack there of in the marketplace for everyone.
Like I said earlier I am all for competition and options for consumers. The problem is that more often than not consumers get hurt by these companies because they are given a false sense of hope that the MLS is what sales properties when there is so much more to it. Next thing they know 6 plus months have gone by, their home is worth less, and their property is now a stale listing. Or they get an offer and the deal ends up not closing when it should have. There are very few consumers that can manage selling without representation. Even you gave Kudos to the great agents in each marketplace which includes me because you admitted it is very time consuming to be a Realtor. You experienced that on your own home and that was just one property! Plus you never received an offer which really brings all the fun. I appreciate that.
I can also agree with you that a great agent is hard to find. There are hundreds of thousands of agent nationwide but only 10% really do the business. There are bad seeds in every business. It is my hope that one day the Real Estate Commissions will tighten the requirements to become an agent and more importanly tighten the requirements to remain an agent. Until then it is my hope that consumers will interview and hold their agents accountable so that those bad seeds get forced out of business.
One final note. You had asked me who else does 100% free. There are hundreds of thousands of agents who do 100% free each day by taking properties that they know will not sell because they are overpriced in the hopes they will capture buyers to take to properties that are properly priced. I can assure you that these agents do more than Iggys but like Iggys have given false hope. These agents are working for free no different than your Iggy. You see William, I cannot possibly respect any person or company who uses others for their own personal benefit without regard for others. Advertise properly and I will gather a different opinion. It sounds like you knew what you were paying for but most consumers do not. Most consumers need a great agent for many different reasons and it turns out that one of those consumers is you.
Best of Luck and Happy Holidays!
I am all for competition and quite honestly these companies are not competition for me or for any great agent. They do such little business that they have no market share. Why do you think that is? Anyone looking to save money can do a Google search for discount broker and find hundreds of companies. I feel strongly that most consumers understand that selling their home and/or purchasing a home is the largest financial transaction they will do this year or next and they want that investment represented.
There are so many statistic and data to support that this is not a good idea for a FSBO. On average homes listed with flat fee or free services sell for 18% less than those homes listed with a full service brokerage firm; therefore, it was not free it cost you 12%. Additionally, homes that sit on the market longer sell for less. Our MLS shows that flat fee or free listings take longer to sell. Clearly testing the market is not great unless of course you want to become an old listing.
You see I do not look at these companies as making money from free services. I look at these companies as using people to get what they want regardless of who gets hurt in the process. Many folks are hurt by these companies because they lose money in the long run and representation...both buyers and sellers.
If you think it is brilliant and it fits your needs then go for it. Best of Luck!
Who's the big winner in this transaction? Who's negotiating for the buyer? Who's negotiating for the seller?
For FSBOs.....does this model not defeat the purpose? You may get a free MLS listing, but you'll be paying a commission to BuySide if they bring a buyer to the table.
Just remember that you get what you pay for. Good luck!
But yes, realtors sometimes have to do earnest work that doesn't result in a paycheck ... just like every other business in the world spends time and money on lead generation, sales presentations, etc. etc. I hate it when I spend 20 hours meeting with clients, writing proposals, fielding questions, and preparing demos only to have a customer not buy my product in the end. That's business!
These are actually very interesting statistics - I hope I'm understanding you correctly:
Re: the list price vs sale price ratios. If you take into account the 3% sellers broker commission the limited service and MLS only don't have to pay you get this:
For a home that lists for 400K:
Limited service = $380,800 (95.2 list price) - $11424 (3% buyers commission) = $369,375 net
MLS Only = $391,600 (97.9% list price) - $11748 (3% buyers commission) = $379,852 net
Full Service = $389,200 (97.3% list price) - $23352 (6% buyers + sellers commission) = $365,848 net
Wow! If you look at it this way, best net profit (money in my pocket) goes to the MLS only and limited service! An average of $15K more with MLS only! Full service puts the least amt in my pocket!
(realtors always seem to forget the part where they get paid needs to get calculated into my bottom line!)
I agree though that no question if your sale is time sensitive you need to go with a fs realtor! But not sure these stats exactly support your argument ... do I have the number right here?
I recently responded to another question similar to yours and decided to get some statistical information to make my point. I'll share it again here.
In the market areas I serve we currently have 3,200 active listings. We have over 3,000 active Realtors in the area. We sold 265 homes in October.
For the year 2007 so far, we have these additional stats related to your post:
MLS only Sold 25 homes. 22 listings expired.
Limited service Sold 16, 17 listings expired.
Full service sold 4,203 and 3,280 expired
List Price vs. Sale Price Ratio
MLS only 97.9%.
Limited service 95.2%
Full service 97.3
Days on Market
MLS only 122
Limited service 105
Full service 83
So summarize my findings, bear in mind that the MLS stats also conclusively show that homes that sell in the first 30 days have the best List Price to Sale Price ratio. The longer a home sits on the market, the less the seller will net.
So you have a couple of options:
If you have plenty of time, list with an MLS ONLY, bear in mind about have the time the listing won't sell
If you have plenty of money, go with limited service, over half the time the listing will not sell.
If you want the best net profit, in the shortest time, use a full service Realtor.
If you have the time to do the printing, marketing, negotiating, open houses, fileding calls from other Realtors, attend marketing meetings, keeping up iwth the latest local, regional, and national laws, and keeping the track of the piles of disclosures and paperwork that go along with selling a home, then FSBOs may indeed be the way to go.
Either way - good luck....there are buyers out there!
Just a thought - I'm sure you post your listings for FREE here on Trulia. And you advertise yourself and your services for FREE in these forums. Would you advise other realtors that "you get what you pay for" with Trulia's service? The point is - price does not equate to quality.
Back to the commission - if I find my own buyer - the money would go in my pocket. And I don't pay a sellers commission. And with IggysHouse it seems that I don't even pay any "flat-listing" fees. I see many potential winners with this model!
What does the advent of this type of service mean for the industry?
To me - this is fantastic because it means competition, and competition is good for the consumer. Realtors are losing the option to lean solely on the MLS to sell their homes (of course, the best realtors don't do this - but so many not-so-great realtors do!). Consumers have viable alternatives now, which means EVERYONE - realtors, limited service, flat fee, and free services alike - will need to work harder and prove they can do a better job to get my business.
I think these guys are brilliant!