Buyers can, but usually donâ€™t pay anything for the services of a REALTORÂ® during their home search. You will most likely discourage buyers if you expect them to pay any of the commission.
Whether you realize it or not, if you are advertising your home for sale on CraigsList, you are already "going the FSBO" route.
Here are a few points you might also wish to consider:
Today I searched the RMLS for one of my buyers and found 87 homes that meet their criteria. What do you think would make me add one more to the this already extensive list of homes for my buyer to consider?
Do you think professional REALTORsÂ® search CraigsList or other non-RMLS sites for listings? What would be the incentive for them to do so?
Do you have a full time job? Do you want two? Often, part-timers are unsuccessful given the current local real estate market conditions. Would you hire a part-time lawyer? How about a part-time surgeon? This is a very large financial decision. Do you really want to go it alone?
Not selling during the Holidays is mistake based on a common misperception. Buyers who are out shopping during the Holidays are very serious. Many companies schedule their employeesâ€™ transfers / relocations in the 4th and 1st quarters.
Research has shown that homeowners who use a professional REALTORÂ® receive an average sale price that can be 16% higher than those who sell FSBO. For example, say you are asking $200,000 and discounting that down to $190,000 for your friends or those who answer your CraigsList ad - you could get $232,000 by using a professional REALTORÂ®. That would cover the entire commission and then some.
As a FSBO, do you know how to find and reach relocation buyers?
Many professional REALTORsÂ® provide a choice of several different commission and marketing plans â€“ you are bound to find one that fits your needs.
95% of all homes sold FSBO are sold to investors who demand rock-bottom prices.
Please donâ€™t take this the wrong way, but when a Buyerâ€™s Agent does a transaction with a FSBO, they actually end up doing double-duty. Would you want to do two jobs for the price of one?
PDF files and flyers are nice, but it takes a lot more to sell a home these days â€“ print ads, open houses, and many â€œtraditionalâ€ marketing methods are outdated and quite frankly a waste of time and money. There are many more technology tools that you need in order to ensure success â€“ and most of them are either very time consuming and/or expensive â€“ 800 call captures systems, blogging, establishing a network of buyers and sellers, qualifying buyers, drip email systems, utilizing social networking sites, and networking with other REALTORsÂ® are just a few of the tools I use on a daily/regular basis.
Getting an offer is good but closing is the goal. Do you know how to qualify a buyer, cope with a buyer who gets cold feet, or troubleshoot other issues that could cause a sale to fall apart before closing?
Difficult legal issues can and often do occur during real estate transactions. Do you know what disclosures you need to provide to the buyer? Do you plan on using a lawyer to help you with any problems that may arise?
Buyerâ€™s agents earn their pay and work hard to locate and acquire buyers, analyze neighborhoods, qualify buyers, provide buyerâ€™s guarantees, review disclosures, ensure the accuracy of all contacts and forms, and last but not least, hold transactions together.
Buying and selling real estate is, after all, a business - and not one for the faint of heart. If you expect a good job, expect to pay a good wage.
I guess we are in the same business now. I admire you for taking the opporutunity to learn just how much effort goes into the sale of a home. Short answer 3%. Detailed answer, you need to consider if you will really save yourself any money or will you cost yourself. And how did you arrive at your asking price?
1) You need to consider yourself and families safety.
2) By offering a 5% discount, you have effectivly notified savvy agents upfront what you will do, when you list with an agent
3) While a nice brochure will go a long way, it is but one piece of the deal
4) A buyers agent works much harder than you can imagine. They drive clients around for hours on end, screaming kids, gas, etc. They coordinate closing needs, they provide legal protections to you and the buyer with their knowledge, and they will basiclly attempt to keep everyone happy. and so much more...
5) A sellers agent will provide you with extensive advocacy, when you are facing buyers, inspectors, other agents
6) NARS has performed many surveys over the years, each says the same thing. FSBO genarally gets between 9 and 15% less than an agent can get them. Do you have extensive web presence? realtor.com, company sites, agent sites, blogging, MLS access. I could go on and on.
7) Why risk your time this way? This is much larger than you know! You will need to be available to show you home all the time. If you are not very flexible, the buyer walks. If you do have a contract, who will protect you in the event the buyers become difficult?
8) Pack up your valuables, perscriptions, and never let your spouse show the home alone. When you are represented by an agent who is a member of your local board, they take on the safety risks, However we have training and work with qualified buyers. Who will call you?
9) Until you become a liscensed professional Realtor/Broker, you will never have the experience to sell your own home. You could get lucky...maybe...
Why cut your own hair, drill your own teeth, file your own court petitions...?
Be smart, save yourself a lot of headaches, seller sat open house weekends, price drops, stress, go with an agent who is prepared to market your home till it sells.
Wishing you well and Merry Christmas,
If you have done your research and set a price, go for it. What does it hurt? December is the worst month historically to sell in the Twin Cities, and you are doing the right thing by preparing for the Spring. Just remember to pre-qualify anyone who calls to view your home without an agent. Craigslist is a great resource, but you never know who you might be dealing with, so be careful.
I think the responses have been correct about the fee to expect from a Buyer's Agent. I have brought past buyer clients to FSBO sellers in the past and been more than willing to handle the rest of the transaction for both parties. Just also remember, that any agent coming in with a buyer represents the interests of that buyer. Do not give away any information you consider confidential because the Agent's duty is to then tell their client. Also make sure that the agent discloses they do not represent you and presents you with an Agency Relationship Disclosure. If you would like a copy for reference, I would be more than happy to email you one.
Good Luck to you!
I think everyone should look out for their best interest so best of luck to you!
In regards to your question about buyer's agent fees, before showing a fsbo property, many agents will call you and ask if you are cooperating with buyers agents. If so, how much. Then you tell him/her how much you want to pay as commissions are negotiable.
Also, I think you're confusing the listing agent vs. buyer's agent job description. All the things you've mentioned above are the things a listing agent is supposed to do (right now, that's you).
If you think you're priced right and still willing to offer 5% off, then you're not really saving any money by doing it yourself, even if its for just a few months. I realize you are planning to use a realtor in the spring, then either get a listing agent now and get a jump start or just wait until spring. From many miles away, it looks like you might do alot of work and not get much action or even if you did, you might be leaving money on the table. Good luck!
Buyer's agents working with an unrepresented seller will wind up doing more work than they would with a represented seller since as a non-professional it is unlikely you will know every step of the process.
Buyer's agents have more inventory than ever to show clients.
Buyer's agents know what they will be paid on an MLS listed property before they even show it.
With that in mind, if you want serious interest from buyer's agents, you should offer them compensation that is fair given what they have to do.
When you go to list your house in February, the total commission the listing agent will ask for includes the commission for the Buyer's agent and can vary dramatically. As with many things, price doesn't always equal service, both low and high. It is best to interview 2-3 agents to get a feel for their capabilities and to compare fees. I am not a "discount fee" agent but believe that my premium service and marketing supports the fee I charge my sellers.
If I can answer any other questions for you, you can get my contact info off my website. I would be happy to help, and would love to speak to you in January about listing in February!
It's also one less thing for us to worry about since it would have been pretty stressful trying to sell the house being 2000 miles away and maintaining both mortgage and $3000+ SF rent.
To be continued in 2009 ...
Whenever I've been in that situation, it turns out I've had to do the majority of the paperwork for the seller, as well. I wouldn't think of asking the seller for less than 2.7%. We listing agents pay that to a buyer's agent, so why shouldn't a seller? Obviously, you value listing agents or you wouldn't consider listing in February with an agent. You will be paying him, more than likely, 5.5-6%. That's because he is going to pay the buyer's agent 2.7, minimum.
You could probably expect to pay anywhere from 3 - 6% depending on the agent that comes through. There is no set percentage and every agent has the right to charge what they feel is right. I understand that the buyer did not market your home but they have been working with the buyer and most likely for months trying to find then the perfect home and then the one agent has to deal with both sides of the transaction as far as paper work goes. Sometimes working with For Sale Buy Owners the transaction doesn't go as smoothly as it would with an agent.
I personally charge 4%, but again that is a personal choice of mine.
You the seller should be paying the commission but again this is a negotiable item and if I were representing the buyer You bet we would be asking for the seller to pay the commission.
Hope this helps!
Have a wonderful Christmas and Happy New Year!
Anyway, you've got the bug, try it out and get it out of your system. You might be successful and you might find that you really like it. And if I were you, I would take JR's advice to heart and qualify your potential buyers. There are alot of chronic lookers/time wasters out there disguised at buyers in this buyers market! Good luck!
I hope you have a Merry Christmas and good luck to you in the New Year!
None of this is meant to say that you cannot succeed. You must also consider the fact that there are fewer buyers out there duing this time of year. (There are also many less sellers and therefore less competition.)
My question for you is (What do you do if you find someone who wants to make an offer?) Knowing how to pre-qualify and consult with a buyer are important to any transaction. Many buyers prefer to deal with agents becasue it does not cost them a dime, they can use the agents gas and expertise. How much time are you willing to devote to this? Can you do it with your full time job that you most likley have to support yourself and your family. In addition, you realize that an agent is paid a success fee right? In otherwords, you don't pay a dime if your agent does not bring success. That in itself may outweigh the fact that you could be missing two months of exposure. Buyers at this time of year are much more serious. There are fewer but much more serious.
All the best!
I know you didn't mean "merely" when you said "merely", :) but I'd remind you that bringing a buyer to you enables you to sell, which you wouldn't if this agent hadn't brought a buyer.
When you are selling your home on your own you neglect to think about how much a realtor will spend on your home when they list it. I am guessing your current budget to sell your home with the advertisement on CragsList.com, your flyers you made, and the networking you are doing might be running you a total of $200. Well, If you were to take into account the advertising my team does (The Johnson & Murphy Real Estate Team) we would spend over $500/month advertising your listing. When you look at the difference it will show you that we are getting your home in front of more people giving you a better chance to sell your home quicker and for more money. Now I am not trying to be arrogant I am just trying to make a point. The point is that Realtors do this day in and day out, day, after day, after day. The good agents know what works and what doesnâ€™t work when it comes to advertising. Yes, you would have to pay a larger commission than 2.7% but statistically speaking you have a much better chance of selling your home quicker and for more money.
Finally, look at if from a realtorâ€™s perspective. Sell the home as if it is a pay check that will help your kids go to college, put food on the table, or allow you to make your mortgage payment. Because realtors are the only sales people who take on the opportunity to make a sale, market it with their own money, and if the home doesnâ€™t sell are out potentially $100â€™s if not $1,000â€™s of dollars. There are no other sales people I know of who will take on this risk. So you as a FSBO need to do the same.
The reason we're trying to network now is that if we go with an agent from the get go, this option wouldn't be available to us. In two months' time, we will be happy to work with an agent and there will be no shortage of agents willing to represent us. I'm in the graphic arts department so putting together the brochure took me 1 hr including all the formatting and uploading larger images on Flickr.
My work's all done ... I'm just trying a different approach during the slowest season but wondering what's fair compensation should a buyer's agent get involved.
We've already established the amount we're willing to accept for a private party sale, and will not hesitate to consider an agent represented offer that matches that amount.
Is that making any sense?